Est1 Task 1

Company Q’s Attitude Toward Social Responsibility

The current attitude of Company Q in regard to social responsibility is one that favors shareholders. The shareholder comes first model is based on the belief that a company’s only responsibility is to make a profit. By making a profit, the company does the most good for society. The newer and more complete model of corporate goverance, is one that is based on a stakeholder interaction model. By demonstarating a significant lack of concern for the majority of it’s current stakeholders it is also harming the shareholders who expect a maximum return on their investment. By demonstarting a lack of concern for the primary stakeholders of the company, they have been poor corporate citizens and have not been socially responsible.

Company Q has recently closed two stores in a higher-crime-rate area of the city stating that the reason for doing so was because the stores were losing money. It can be assumed that in order to operate the stores in a more risky area there could be higher expenses to ensure safety and security measures are taken. There is no evidence that they took any additional measures to operate differently. Rather than make an effort to make changes, they opted to just close the locations. The closures will have very negative effects on the community, which is already struggling, as well as the individuals and families in the community. The overall impact of this decision, could result in negative publicity and hard feelings towards the company from the community and from other consumers who would be sympathetic to

By closing two stores which happen to be in higher-crime-rate areas of the city and justifying these closures with simplistic explanations that the stores were “consistently losing money,” Company Q leaves room for speculation that the closure decision was likely predicated upon the more obvious challenge: greater expenses associated with risk management of operations in...