Question

Discuss in no less than 200 words:

What are companies typically doing with their money if they are not donating it to charity?

Answer 1

Companies, big or small aims to maximize profitability and to grow on a Continuous scale. Every organisation strives to achieve success and to have financial stability. Those who successfully run the business and have enough resources and money, make investments and try to use it for activities that bring greater success and increase the goodwill.

If the companies, that are not donating some portion of their profits to the charitable foundation/institution, they are probably investing it in some other avenues, using it for activities involving in corporate social responsibility, investing it is research and development programs, or using it to improve the processes, human resources, and competitive strengths.

Firms may use the excess money to bring advancements and to upgrade the machines and technology. Which will bring greater competitive advantage and keep the firm stable when facing the environmental forces. They might use the money to establish new Strategic business units, or to add new manufacturing plants, or to acquire smaller competitors, in order to achieve a leading position. They would have multiple subsidiaries, holding companies, and divisions, operating independently to multiply the revenue.

Business firms might use the excess finance by changing policies of pay package, benefits, and incrementing the inventive system. New facilities can be added to the premises to bring greater efficiency and flexibility in workplace. Employees can be trained in the areas where they are weak and are made ready to face new technologies and help them grow along with the business.

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