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Should You Play Politics With Your Purchases?

It's often difficult to pierce the public relations veil of a giant corporation to learn how it's really conducting its affairs.

Q. I have a friend who refuses to patronize companies whose business practices she opposes or whose owners take political stands she dislikes. I think this is a futile standard because it’s impossible to know everything you need to know to make such decisions. I just shop for good products at a fair price from whoever makes them. She thinks I lack principles. Your thoughts, please.

I respect your friend’s wanting to further her personal values through her patronage (or non-patronage) of businesses. But I agree with you that she has to accept a lot of uncertainty in the pursuit of her goal.

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In a small town, perhaps it’s possible to know that a local business has a reputation for chiseling its suppliers, overbilling its customers or treating its employees poorly. You can easily avoid doing business with that firm.

But in today’s global marketplace, it’s often difficult to pierce the public relations veil of a giant corporation -- especially a foreign-based firm -- to learn how it’s really conducting its affairs. There are instances of companies getting caught in egregious conduct after being named to lists of “most admired companies” or “best companies to work for.”

Besides, people often don’t agree on what constitutes unethical conduct. Do you give a company demerits for outsourcing previously domestic production? Or reducing its container sizes so it can charge the same price for a smaller quantity of its product? What about using an obscure accounting strategy to wipe out its tax bill? Or telling workers to pay a larger share of their health care costs? Some people view these as acceptable business practices; others don’t.

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And how much can we really know about the political actions of owners of closely held companies? There are a few owner CEOs who have taken highly public positions on controversial issues, exposing their companies to boycott by customers who disagree. But most owners keep their heads down, and your friend would have difficulty learning their positions on anything. This is one argument you probably won’t settle.

Have a money-and-ethics question you’d like answered in this column? Write to editor in chief Knight Kiplinger at ethics@kiplinger.com.

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