The paper "The Aim of Companies Is to Make Profit, Not to Address Social Responsibilities" is a perfect example of business coursework. In the approach of bounded rational decisional making and consequentialism theories such as utilitarian model, and the ultimate goal of business is to make profit irrespective of another side effect (Hodgkinson & Starbuck, 2008, p. 457). The basis of this argument is that business should engage in a venture where pleasure is more than pain. In business term, this means where returns are higher than losses (Chandra, Krovi and Rajagopalan, 2009, p. 48).
This kind of thinking is anchored from the approach that a company gain market leadership through understanding the needs of consumers and executing strategies that generate superior quality, value and service (Moorman & Rust, 1999 p. 180). This was informed by the shareholder's framework and economic responsibilities approach in business. On the other hand, there is the realization that firms can not only base their performance on profits recouped alone (Geraghty, 2010, p. 141). This realisation has been shaped by various socio-economic and political factors. Ethical approaches to doing business have over the years gained a paramount position.
Moreover, Kantian ethics demand that human beings engage in what is morally upright and ought to be upheld. Corporate social responsibility (CSR) forms a level of appreciation by business organizations for being given the opportunity by the host community to conduct business amongst them by drawing resource from their community. The chief benefit is brand value. Firms are able to ride on the good reputation they have created amongst their clients (Geraghty, 2010, p. 143). This essay aims at discussing the phrase “ the aim of the companies is to make a profit and not to address social responsibilities (CSR). 2.0 Business Stakeholders and Their Expectations To build the basis of the argument for this paper, it is important to indulge and look into the expectations of the stakeholders in the business fraternity.
The essence of this is that different stakeholders have different expectations which they would want to be achieved. These expectations are like a crossroad to corporate management since some are incompatible and if they were to be addressed all, then there has to be a compromised middle ground.
There are various theories that can be used to explain human expectations and how they are shaped. These expectations if not met are likely to cause reluctance, withdrawal and even social unrest. The understanding of stakeholders’ expectations is important in defining how the concept of social responsibility has grown and how businesses have gradually shifted from the pure profit-oriented approach. This is based on Caroll (1991, p. 40) that factors like sustainable development, occupational health & safety, consumer safety and equal employment opportunities have given rise to CSR. Expectation theory looks at performance in relation to the anticipated satisfaction of valued goals set by the interested parties.
According to Victor Vroom (1964) cited in Brim (2012, p. 3), people adapt their behaviour in a certain way so as to attain desired goals. For instance, this means if the business is not of a good name in the society they are likely to shun even through mass action. On the other hand, investors will shy away from businesses that operate like charities since they do not guarantee high returns.
This then calls for a mid-ground approach. The same can be analysed in the context of bounded rationality framework. Jones (1999, p. 297) notes that bounded rationality approach to decision making asserts that decision-makers are goal-oriented or rather objective and adaptive in their decision making. As such, in bounded rationality decision-makers are intentional in their decisions.
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