Company Q’s Attitude Toward Social Responsibility
Company Q’s Attitude Toward Social Responsibility
Company Q’s current attitude toward social responsibility demonstrates a bias toward the outdated shareholder model, rather than the stakeholder interaction model of corporate governance, as well as a significant lack of concern for the fundamental wellbeing of some of its primary stakeholders. Arguably, however, even the shareholders themselves may ultimately be frustrated in realizing the maximum potential return on their investment in this company due to lost opportunities as a result of Company Q’s poor corporate citizenship and failures to achieve social responsibility.
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 higher-crime-areas. Without any more diligence of effort in providing an explanation to the community regarding these closures, closures which will have a very dramatic, negative effect on individuals and families living in the affected areas, it appears as though Company Q is simply pulling out of a part of the community already suffering significant economic difficulties because profits are not as easily generated at these locations. Pulling out of these areas may be short sighted and might have a blowback effect that could ultimately do more harm than good to the organization as a whole.
Instead of assuming greater social responsibility and managing the known risks more carefully, the company has now abandoned this section of the community in favor of locations deemed safer to operate, and where profits appear to be more easily earned. By removing the only retail grocery supply from parts of the community affected by higher crime rates, Company Q has, at the very
Company Q’s current attitude toward social responsibility demonstrates a bias toward the outdated shareholder model, rather than the stakeholder interaction model of corporate governance, as well as a significant lack of concern for the fundamental wellbeing of some of its primary stakeholders. Arguably, however, even the shareholders themselves may ultimately be frustrated in realizing the maximum potential return on their investment in this company due to lost opportunities as a result of Company Q’s poor corporate citizenship and failures to achieve social responsibility.
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 higher-crime-areas. Without any more diligence of effort in providing an explanation to the community regarding these closures, closures which will have a very dramatic, negative effect on individuals and families living in the affected areas, it appears as though Company Q is simply pulling out of a part of the community already suffering significant economic difficulties because profits are not as easily generated at these locations. Pulling out of these areas may be short sighted and might have a blowback effect that could ultimately do more harm than good to the organization as a whole.
Instead of assuming greater social responsibility and managing the known risks more carefully, the company has now abandoned this section of the community in favor of locations deemed safer to operate, and where profits appear to be more easily earned. By removing the only retail grocery supply from parts of the community affected by higher crime rates, Company Q has, at the very
Cited: Ferrell, O., Fraedrich, J., & Ferrell, L. (2009). Business Ethics. In Ethical Decision Making (p. 12). Mason, OH: South-Western CENGAGE Learning.