“A manager’s responsibility should be to the shareholders alone.” Discuss this view (12 marks) Corporate social responsibility refers to a business choosing to go above its legal obligations relating to society and the environment; this can be done by including factors such as Fairtrade or good working conditions for employees. However, some people argue that managers should only consider shareholders when making decisions and thus avoid CSR. In recent years, CSR has becoming increasingly revered on a global scale and therefore it’s becoming much more significant. For a business such as Greggs to breakthrough in foreign countries they would need to maintain their brand image to maximise success and therefore they should consider their other stakeholders such as employees and suppliers. This could be approached by making sure that their retail outlets in other countries are attractive and have good working conditions for their workers.
QBT Task 4 – Final Version 2 Robb Farrell Western Governors University Student ID# 000242903 THE REAL BOTTOM-LINE OF TODAY’S BUSINESS Research reveals that companies that focus on adhering to ethical standards and investing in socially responsible practices to the benefit of all stakeholders have a significant business advantage it today’s market place. Socially and ethically conscious originations have compelling business results in related to employee loyalty, company profits and consumer affinity. There was a time in our capitalist society that an organization’s number one priority and predominant focus was profits and shareholder interest. Indeed things have and are changing. In today’s market climate, companies have had to increase their consciousness as to what really matters.
This means aligning the previous concepts with a framework that financially capitalizes on the positive benefits realized. A successful business is conscious of the social and environmental impacts of its supply chain, operations, products and services, and acts responsibly to minimize any negative impacts and remain in business. 2.) Sustainability requires a commitment to engaging in business practices, make net positive contributions to the overall health and well-being of employees, customers, and community. Williams and his team have reached a consensus to address the future.
But logically, the bonuses were for business productivity. How was the business productive if they received federal bailout money? It was said that the bonus money was in their contracts. Their clients took major loses and they take the bonus. I think that a business leader needs to act and conduct themselves in the best interests of their employees, and clients.
ALL WK 1, DQ’s: WK 1, DQ 1: What is a business’s obligation to build an ethical culture and balance its desire for profit with ethical responsibilities to employees, customers, society, and the environment? Ethics is different from one person to the next, so it is imperative that business clearly define the norm for staff members and management. The decisions organizations make influence more than business partners, affiliates, culture, and others. It is important for organizations center of attention on maximizing shareholder revenue. Therefore, maximizing profit without causing destruction to the business culture can be a balancing act for most organizations.
Social Responsibility and Company Q Social Responsibility and Company Q Western Governors University Company Q believes that their responsibility is to the financial health of the company more so than any social responsibility to the communities in which they have stores. According to the textbook Business Ethics 2009 Update: Ethical Decision Making and Cases social responsibility is “defined as an organization's obligation to maximize its positive impact on stakeholders and to minimize its negative impact.” (Ferrell, 2013 p.38). By closing those two stores Company Q is showing their corporate focus on profit and not how important those two stores may have been to the communities in which they were located. The leadership of Company Q is so focused on revenue and its loss that they are overlooking how the positive impact of social responsibility could help them and their revenues.
They state that successful organizations possess internal structures that match environmental demand, which links to Pfeffer’s (1972) argument that board size and composition is a rational organisational response to the conditions of the external environment. Furthermore, directors may serve to connect the external resources with the firm to overcome uncertainty (Hillman, Cannella Jr & Paetzols 2000), because coping effectively with uncertainty is essential for the survival of the company. According to the resource dependency role, the directors bring resources such as information, skills, key constituents (suppliers, buyers, public policy decision makers, social groups) and legitimacy that will reduce uncertainty (Gales & Kesner 1994). Thus Hillman et al. (2000) consider the potential results of linking the firm with external environmental factors and reducing uncertainty is the reduction of transaction cost associated with external linkage.
Case1 The goals of this case is to Searching for Byte alternative solutions to feed the increasing demand of its products so can it enable the corporation to maintain a market share also the Ethical dilemma regarding the company vs. Plainville , in addition to highlighting the social responsibilities of corporations that are for the most part considering profit maximization as their primary goal. Additionally, illustrating how the outside directors of the board can play an active role by avoiding groupthink and raising genuine concerns over management decisions by using their unbiased judgment and thereby providing efficient leadership to the company. Suggestions for settling the corporation impasse they can to return to the white board, searching for other solutions that capable to soothe the situation and finding way out to this impasse such as buying a small competitor or extending the business , Maybe Bytes Products and the competitor can enter into strategic alliances and building a new plant in the area may not be needed also According to Carroll’s four responsibilities of Business, Byte is already following the first two responsibilities, Economic: producing electronic components to meet the demand so that Byte could repay its stakeholders; Legal: follow accordingly to the regulation of the state. Hence to compromise for the present impasse, Byte has to follow the last two responsibilities which are Ethic and Discretionary. Byte has to tell its potential employees and town administrator about this temporary operation so that they can plan for their set back when the plant closed in the future.
CHAPTER 2 QUIZ 1 | Which of the following best describes a company that follows the inherence theory of social responsibility? | a. | Managers are responsible to shareholders, but serve them best by being responsible to larger society. | | | b. | Managers answer only to shareholders and act only with shareholders interests in mind.
Hermes believed in successful stewardship involving using its vote in approving the board of directors. Its aim is to lead in promoting better management and intervening in companies which were failing to resolve critical issues such as board structure, strategic direction, capital structure, and corporate governance, problems in company’s management. Their objective is to maximize the returns to its shareholders. The company is concerned about governance, ensuring that the board of the company had the right mix of entrepreneurship, expertise and independence to maximize the company’s values. They possess the necessary resources to build the monitoring capabilities and have better access to information.