The pros and cons of ranking shareholders over employees and other stakeholders

Free Press,30— What are the pros and cons of ranking shareholders over employees and other stakeholders?

Bowie Englewood Cliffs, New Jersey: Business owners should anticipate problems like this and have a plan to appease external stakeholders that have concerns about the business.

This saw the company attract a long list of fines for various violations such as consumer fraud, environment degradation, deceptive advertising, and media disinformation among others.

Welch Case Study

The practice of a corporation publishing information about its economic, social, and environmental performance. GE only made decisions based on what employees portrayed. Corporate social responsibility is defined in chapter 5 as the corporate duty to create by using means that avoid harm to, protect, or enhance societal assets.

I felt that GE did enough considering the constraints and limitations. The pros were that ranking shareholders would mean more money and the cons would evidently mean that because shareholders were put first, the employees would be discouraged and would not want to work for that particular company.

The Superfund Law passed by the Congress in introduced a tax on the dumping of toxic wastes from chemicals and petroleum industries. Going by the definition of social responsibility as explained in chapter 5, GE was required to engage in activities that enhanced societal assets.

At the same time, however, the company engaged in activities that went against societal good. They simply did not seek to solve any social problems at all. Codes of conduct are formal statements of aspirations, principles, guidelines, and rules for corporate behavior.

Ultra vires is a Latin phrase denoting acts beyond the powers given the corporation by law. His management strategy was seen as an affront to the rules of society in that it went against rules of social justice. I do not think that it is specifically wrong to view employees as costs of production, because technically they are a resource to the company and are contributing human and physical capital.

Could it have done better? Regulation by nonstate actors based on social norms or standards enforced by social or market sanctions. Service principle is the belief that managers served society by making companies profitable and that aggregate success by many managers would resolve major social problems.

Did GE in the Welch era fulfill this duty? For example, the GE Pension Fund could have provided retirees and their unions with more benefits but instead Welch wanted to leave the pension plan overfunded to benefit the corporation.

GE encountered a pattern of criminal cases during this time and therefore did not follow multiple bodies of law, act ethically, or be transparent and accountable. Prentice-Hall,97— Should GE have rebalanced its priorities? Should GE have rebalanced its priorities?

Furthermore, ranking of one group over other may hurt teamwork. Another constraint of this move is that it hurts the morale of senior managers since they may have a feeling of inferiority when engaging with shareholders.

Note that these are ethical rights. Finally, Welsh should have also kept his personal opinions separate from his business world. How to Write a Summary of an Article?

Corporate social responsibility

GE as one of the most prominent companies at the time was expected to meets its social responsibilities. Like I said In the previous answers businesses will grow if you just allow them to.

Though job cuts are necessary for the survival for a business, it seemed like they treated their employees as a resource instead of human beings. Note that I am considering only the normative version of the theory, which states how managers ought to behave.

He embarked on a raft of reforms and restructuring activities that led to sacking of some workers and reshaping of GE stocks. Businesses are motivated by financial incentives in their actions rather than social objectives that may not have financial incentives.

In GE Welsh did not practice an intermediate circle of responsibility because it did not exercise its economic function with a sensitive awareness of changing values and priorities, especially in relation to environmental damage. The business acumen an experienced business leader has is highly beneficial for a business owner.

There are advantages and disadvantages to both types of stakeholders.

In his tenure, he failed to protect societal assets or avoid harm to the environment. Civil regulation is regulation by nonstate actors based on social norms or standards enforced by social or market sanctions. A production cost not paid by a firm or its customer, but by members of society.Although the definition of stakeholders is quite broad, there are five types of stakeholders that have been accepted widely, namely, shareholders, customers, employees, suppliers and the local community.

Traditionally, the law has not given a voice to non-shareholder stakeholders in corporations. Answer to What are the pros and cons of ranking shareholders over employees and other stakeholders?

Is it wrong to see employees as. mint-body.com pros of ranking shareholders over employees and other stakeholders would be that there is more money and profits. Because Welsh had a classical economic view of corporate social responsibility, the shareholders were his primary concern.

Both the shareholder1 and stakeholder theories are normative theories of corporate social responsibility, dictating what a corporation’s role ought to be. By extension, they can also be seen as normative theories of business ethics, since executives and managers of a corporation should make decisions according to the “right” theory.

Ranking shareholders over other stakeholders empowers the former to have more control of the organization.

Advantages and Disadvantages of Stakeholders

The pros of this move are that it puts more pressure on the board of directors to meet high profit goals. What are the pros and cons of ranking shareholders over employees and other stakeholders?

Is it wrong to see employees as costs of production? Should GE have rebalanced its priorities? The pros were that ranking shareholders would mean more money and the cons would evidently mean that because shareholders were put first.

Download
The pros and cons of ranking shareholders over employees and other stakeholders
Rated 0/5 based on 31 review