Critical Thinking in Csr

What is the purpose of the firm given the concepts of ownership?

According to Milton Friedman, the stockholders/ corporate executives are employees of the owners of the business; aim is to maximise profits whilst staying within boundaries of the rules and regulations. Furthermore, executives are only authorised to do their jobs such as, maximise profits (uoregon 2010). Stockholders own the business, thus profits belong to the stockholders, therefore it can be seen that any ‘company’s resources that is devoted to some cause other than making a profit is outrageous’.

Strategic options

Strategic options for a business can be seen as the direction and scope of an organisation over the long term. The outcome of the cooperation’s strategic option is to gain comparative advantage over competitors, to meet the needs of consumers and to fulfil shareholders expectations (tutor2u.net, 2009) Before business’s can decide on a particular strategic option, it needs to analyse its stakeholders. Stakeholders within a business often consist of: the Local community/ consumers, suppliers, employees, environment, and shareholders (tutor2u.net, 2009).

Strategic options such as Marketing, Research and Development (R&D), moving to less economical countries to create cheaper products often benefited one type of stakeholder; the shareholders. These types of strategic options are often generated to make profits and higher returns for the shareholders, and not necessarily taking into account the environment, employees, nor consumers (uorgeon, 2010). However if a company were to take a more cooperate social responsibility role (C.S.R) it will not only benefit one part of the stakeholders, but can potentially benefit all. Firstly with fair trade, farmers, or overseas employees will be paid fairly; also known as ‘Ethical CSR,’ part of the 4 positions of CSR (Lantos, 2001). The consumer would then feel more satisfied/ comfortable for the fact that they bought a product which...