Tuesday, April 30, 2013

Response to Colin's Post

Companies that deceive customers risk getting found out which means they may have to pay back their customers, lose customers, and damage their public image. Why then do companies risk it? 

I think companies risk it on the off chance that they will not get caught.  Also, even if they do receive some bad press for their behavior, it generally isn't enough bad press to actually change their sales.  If they get caught 1 out of 5 times, the risk is still worth the payout.  This is similar to when companies choose to not follow government regulations very well because it is expensive. In the off chance they get caught, the company pays the fines.  Otherwise, they cut costs and increase profits. 

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