organizations social responsibility

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also i wnat you to do the citation ( do not use any sources outside from the chapter that i have attached ) ( Name of the book : MGMT (principles of management) Student Edition 8 ( Published: 2016)

author: Chuck Williams )

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action on their complaints.63 Thus, the final step in developing an ethical climate is for management to fairly and consistently punish those who violate the company's code of ethics. The key, says Paychex CEO Martin Mucci, is "to deal wiih it quickly, severely, and publicize it."64 Says Mucci, "I learrred early in my career you have to deal with it quickly, severely, and publicize it' Our employees know that if they are caught cheating in any way, even if only to make a few dollars or improve their scores, they will most likely be terminated' Then we review that with the entire management team' We have done that with managers of locations, top sales representatives-we don't treat anyone differently"'65 Amazingly, though, not all companies fire ethics violators. In fact, 8 percent of surveyed companies admit that they would promote top performers even if they vi olated ethical standards.66 e5R#ilffif,Bi-, SOCIALLY to pursue policies, make decisions, and take actions that benefit society.67 Unfortunately, because there are strong disagreements over to whom and for what in society organizations are responsible, it can be difficult for to know what is or will be perceived as socially responsible corporate behavior. In a recent McKinsey & Company study of 1,144 top global executives, 79 percent pr"dl"t"d that at least some responsibility for dealing with future social and political issues would fall on corporations, but only 3 percent said they themselves do a *irug"., ,r*,;=!:'k# ; benefit of shareholders a theory of corporate responsibility that holds that managementt most important responsibility, long-term survival, is achieved by satisfying the interests of multiple corporate stakeholders persons or groups with a stake, or legitimate interest' in a comPanY's actions #ffiw 80 I PARr oNE companies to divert time, money, and attention from maximizing profits to social causes and charitable organizations. The first problem, he believed, is that organizations cannot act effectively as moral agents for all company shareholders. Although shareholders are likely to agree on investment issues conceming a company, it's highly unlikely that they have common views on what social causes a company should or should not support' The second major problem, Friedman said, is that companies compete for raw materials, talented workers, customers, and investment funds. A companythat spends money on social causes will have less money to purchase quality materials or to hire talentedworkers who can pro- i.rce a valrlable product at a good price' If customers find the company's product less desirable, its sales and profits will fdl If profits fall, the company's stock price will decline, and the company will have difficuh attracting investment funds that could be used to fund long-term growth. In the end, Friedman argues, &verting the firm's money, time, and resources to social causes hufis customers, suppliers, employees, and shareholders' Russell Roberts, an economist at George Mason Universifz, agrees, sa)4ng, "Doesn't it make more sense to have companies do what they do best, make good products at fair prices, and then let consumers use the savings for the charity of irgi"#**g..'p @r Prize-winning economist Milton Friedman, the only social responsibiJity that organizations have is to satisfy their ownthut is, company shareholders. This view-called the "rr, shareholder model-holds that the only social responsibility that businesses have is to maximize profits' By maximizing profit, the firm ma,ximizes shareholder wealth and satisf'action. More specifically, as profits rise, the "o*paoy stock owned by shareholders generally increases in value' Friedman argued that it is socially irresponsible for the time, money, and attention diverted to social causes undermine market efficiency.6e In competitive markets, RESPONSIBLE? Sotial responsibility is a business's obligation good lob of dealing with these issues'68 So what should *u."g"t, and corporations do to be socially responsible? There are two perspectives regarding to whom organizations are socially responsible: the shareholder model and the stakeholder model' According to the late Nobel their choice?"70 By contrast, under the stakeholder ffiodel, management's most important responsibiliq' is the firmi Iong-term surwival (not just maximizing profits), which is achieved by satisfying the interests of multiple colporate stakeholders (not just shareholders).7l Stakeholders are persons or groups with a legitimate interest in a companyJz Since stakeholders are interested in and affected Ly th" organization's actions, they have a stake in what those actions are. In 2013, when an environmental group, As You Sow, along with company shareholders, asked Erxon Mobile r.ia a formal sharehoicler proposal to provide detailed information about the impact of iracking, a technique in whicli rvtrter is injected at liigh pressure into oil sli:rle cleposits to fbrce lose oil and natural gas, at Euorr'.s annual shareholder Erhi,bi,t 4.7 Stakeholder Model of Corporate Social Responsibility meeting. Exron cleclinecl to, stating, "the minimal environrnental irlpacts of hvdraulic fracturing PRIMARY llil.lo!?!1.: har.e been il,ell- documentecl." But, in the iirce of increasecl SECONDARY STAKEHOLDERS: concerns about frachng, the cornpanv agreed in April 2014 to provide ii report on fracking's irnpact on air qrialiq, u,ater, and chen'rical usage at Erxon sites. A corlpanv spokesperson said the agreement \\.as, '.a procluctive evolution of our rel:rtionship with some o[ these shareho]cler groups." Aftcr fonnal lv withclr-arving i ts sh areholcler proposiil, As You Sou,presiclent Danielle Fugere, crlrnrnentecl thtrt, "lt cloes feel like Euon is chringing the rvq-it'.s cloing business. [But if the report doesn't provicle niuch r'nfonlintionl, "u,e did rcsen-e the right to bring ii [stiareholcler] resrihrtion nert vear ";3 Stakeholder groups mrw try to influence the firm to *t in tlr"i. ou.n interests. Exhibit 4.7 slior.vs the various stakeliokler groups that the organization rnust satisfv Io rrssrrre its lorrg-ierrrr srrrr-ir irl. lleinq r.esponsible to multiple stakelxrlclers raises tr,vo btrsic questions. First, hor.r,does il colnpanr- iclentifi- orgilniziltional stakeholders'p Source: Repub ished wlth permission ofAcademy of[4ana9ernent, pO. Box 3020, Briar C iffManor, NY 'l 05 1 0-8020. 'The Stakehorder Theory of the corporation: Concepts, Evidence a nd rmprications,, (Flgure), T. Donaidson and L. E. Pr-'ston, A cademy of lt4artagement Review 2a (g95). Reproduced by perrnission ofthe pub isher vla Copyriqht Ciearance Center. nc. Seconcl, Jrou, docs a cornpanv balance tlie needs of different stakeholders? Distinguishing between primary and secondary stakeholders can help answer these questions.Ta Some stakeholders are more important to the firm's survival than others. Primary stakeholders are groups on which tle orgarrization depends for its long-terrn sur_ vival; they include shareholders, employees, customers, suppliers, governments, and local communities. When managers are struggling to balance the needs of &ffer_ ent stakeholders, the stakeholder model suggests that the needs of primary stal
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Organizations Social Responsibility


Organizations Social Responsibility
The 21st century has seen rapid developments especially in business, and most of
these can be stated to have been influenced by the various trends that have been experienced
from time to time. One of the most significant and revolutionary trends that have been
experienced in business include the shift of business strategies from being just profit oriented
to encompassing other aspects like the impact they have on the society. It is with this new
development that the idea of embracing the corporate social responsibility (CSR) as a
business came into existence. The social ...

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