Black Guns and Red Ink

From time to time people will ask me why a given business did something that was it its own best interest, but not necessarily that of the community, the state, the country or the world. After all, between public relations, the desire and need to be good corporate citizens, stakeholder theory, and the fact that managers have to live in the same world as everybody else, you would expect the company to want to always do the right thing. Unfortunately, this expectation fails to consider what mangers are being paid to do in the first place: manage the company on behalf of the owners. With the exception of some very special cases (such as non-profit corporations), most companies are not in the business of trying to change the world, legislate new regulations, or govern the lives of their customers, let alone the rest of the community. And we will not have to go very far in order to find examples of companies coming to grief when they try to do anything beyond the business they were created to do…

Consider the example of Dick’s Sporting Goods, a company which attempted to do the right thing and joined in a voluntary ban of the so-called “black guns” – semi-automatics that look vaguely like the AR-15 rifle used in the Newtown shootings and other outrages in recent years. Keep in mind that these products are completely legal, and Dick’s has all of the state and Federal permissions they need to carry such weapons. We should also note that despite calls from the gun control advocates (and most left-of-center politicians in general) to outlaw these guns, not only have no such laws been passed but sales have been at an all-time high for months amid fears that the Federal government will attempt to confiscate these (or possibly all) firearms. This does not sound like an auspicious time to be refusing to carry such products – a supposition borne out by the recent performance of the Dick’s company and its stock…

The story on Guns.com insists that the company’s financial troubles trace directly back to the black gun ban; the somewhat less pro-gun version available off of the Reuters.com site also gives credit to the backlash against Livestrong branded products follow the fall of Lance Armstrong from the public’s good graces, but acknowledges that the voluntary gun ban is not helping, and that the company’s performance is significantly below predictions. And while it would be overstating the case to say that these figures (gun-related or not) pose a threat to the company’s survival, it is only fair to say that disappointing financial performance in the fourth quarter (the critical one for retail operators!) is not a good thing, especially when at least part of the cause appears to be putting the good of the public ahead of the good of the company…

Now, no one is saying that a company should put the pursuit of profit ahead of the welfare of the community; that kind of reasoning is what leads to explosions in chemical factories that kill tens of thousands of residents downwind. But Dick’s isn’t responsible for gun safety, gun legislation or gun-related crime in America, or even in the communities in which they operate. They’re a retail business selling completely legal products to people who want to purchase those products, and until such time as the state or national governments tell them to stop, they should probably concentrate on making a living and leave the debate over gun control to somebody else…