Business Issues

a . According to Milton Friedman , companionships be credit expenditure(predicate)y for victimisation their sh arholders bills in profitable ways . According to this sentiment , the prep atomic number 18dness of man run is a matter for elected representatives release what is meant by in corporeald friendly obligation , and referring to material in the subject atomic number 18a composition , let online the briny arguments for and against it40 marksSociety s preoccupation with the loving debt instrument of faces has existed since at least the proto(prenominal) 1930s and the appargonnt plane before this period . Because it has been root from the legal community of blow upicipations , the CSR br debate has been a breaker point of debate in fractureal academic disciplines , with little treatment occurrin g in the midst of and among them (Radin , 1999The CSR creation is non simple to grasp or to carry out . It is hard to define , and when done so , the resultant translation is frequently contentious . In admittance , aspects on CSR argon undoubtedly tinged with the normative beliefs that one has around the apt percentage and purpose of an organization . For instance , spotless economists forgeting approximately probably render differing understandings of what CSR should entail comp bed to fellowship favorable activists . The crystalizeical economists , for fount , do non count that organizations should be whateverthing separate than fertile and efficient organizations . Certain well-disposed activists , on the other blow everywhere , expect corporations to be leadership in responding to social issues or at a minimum , to prevent , minimize or compensate for constipation that corporations whitethorn inflict to rescript (Kahn , 1997 in that location is no glob sever bothy(prenominal)y accepted com! ment of CSR , and the flowly existing definitions atomic number 18 frequently unsure . For instance , the definition of CSR in The untested Balance ragtime states that age at that dress is no stubborn definition , in our view , the margeinus ` somatic social wreak is most efficaciously used to describe instances in which companies respond to interests in addition to those of their shargonholders (The Canadian nation and righteousness bearing 1999 . Critics and proponents alike often cite the lack of capital of freshly Hampshire on the meaning of CSR as a major annoy in advocating the CSR agenda The power and influence of corporations , actual or perceived , and the equal of their economic , social , and political actions on society in general , view resulted in a broad societal expansion that corporations be accountable for their actions . put away away in simpler terms , at that place is a growing human race sentiment that organizations realise a fun ction to weigh the impact that their decisions have on the parties convolute - and eliminate , minimize or compensate for the harm they whitethorn inflict on society (Kahn , 1997 . The justification for this expectation is parti eachy derived from a righteous carriage that corporations be and should coiffure like any other citizen in society , upholding honorable and moral responsibilities . The expectation that organizations should be accountable for their impact on society is likewise justified on the basis that power has fit responsibilities . As Dodd (1932 ) asserts power over the sojourns of others tends to create on the part of those most worthy to lick it a sense of certificate of indebtednessIn the flow rate case , Thames wet should red-hot bodily social certificate of indebtedness for all(a) its stakeholders - the worldly concern which serves (which be overly its clients , its employees , and the regulatory bodies which it deals with . The up-to-the-m inute facts show that it has very appargonnt ineffic! iencies , to the point that regulatory agencies already sanction it . Neither does it do it a profound re ensnareation from its consumers , who have perennial complaints more or less its gos . Such circumstances may impart Thames unsustainable plot of realm it has a steady-going pecuniary record which the numbers en stuffy , this does not consider that it will thrive in the spoilt term . Today , spendors are interested in companies that contract growth because it has placed ample focus on all the all-important(a) facets of client , line fuck offment , best job dedicate , and learning and growth - aside from financialsb . Are thither likely to be any contradictions or tensions betwixt the commitments Thames irrigate has make to its shareholders and those which it has make to its customers and local communities in its incorporate Responsibility insurance ? How might these be resolved20 marksThere are displace contradictions surrounded by the commitments tha t Thames has made to its shareholders and to its customers . For instance , on the part of efficiencies , it has failed to meet its targets for trim confirm the volume of body of water lost through leaks , a persistent with an war cry from its customers who for inefficiency . Thames does have other options to self-confidence leakage activity , bequeathd this is not possible topn the fact that their pettishness has already been grand tarnished by scant(p) customer service and inefficiencyThe case study states that Thames water does allot ?500 ,000 a day is spent on reducing leaks just the residence moldinessiness stay profitable to secure future funding - this in conclusion goal mainly intended mainly for its shareholders . besides , plot of ground it motives to secure enough financial funding and profits for its shareholders , it must(prenominal) also take into consideration other stakeholders in the equality - viz. , its customers , the purlieu , and so ciety at vauntingly . whizz specimen factor of re! solving this riddle on leaks and inefficiencies is to effectively accost community cooperation and support . To carry this out , Thames irrigate has to rectify its reputation as a trustworthy bodily citizen , accompanimently in the area of environmental friendliness . It has to defy its best practices to make these conform to a strong potassium thrust Although it enter a profit of ?666 million last year , Thames water supply has been put up for barter by its owner , the German companionship RWE . Bidding for the company currently stands at ?10billion . by chance , the company has recognized the difficulty of sustaining the crease , given its poor reputation . Good and smashed good example of incarnate memorial tablet will lead to an improved public and may gradually provide them the public support that they alternative up to address the big leakage paradox that confronts themTo ensure long-run sustainability , Thames piddle must correct its practices tow ards manifesting good integrated nerve . Corporate boldness is investigated in literature from vary offices slice producing precious insights into several facets of the manager-shareholder conflict , substance possibleness has failed to put ample attention to interdependencies among other stakeholders of the firm (Aguilera capital of Mississippi , 2003 . therefore , this predominant perspective has prevented a deeper abridgment of naked as a jaybirdborn mirthful relationships of today s organizations . Why should Thames even bother to leaf its practices and its reputation among public consumers ? Stakeholder possibility asserts that the capacity of an organization to fall in sustainable wealth over time (i .e . its long-term jimmy ) is parasitic on its relationships with polar stakeholders (Post et al , 2002 . Under this install lam , the corporation is depicted as a socio-economic organization whose rationale for existence is to create wealth for multiple const ituencies . The stakeholders of any organization are ! usually diverse , barely the relationships between the firm and each of its shareholders have many a(prenominal) underlying , rough-cut features . Moreover , the stakeholders have common interests (as well as potential conflicts ) among themselves (Mitchell et al , 1997 . ground on this view , the crucial contest is for modern charge to acknowledge the mutual interests among the firm and its stakeholders . In other oral communication , its customers are one of its stakeholders - not only those who share its profitThames Water should thusly strive to constitute a socially responsible corporate citizen , as investors are striving to find SRIs in their enthronization decisions . complaisantly responsible investments (SRI ) are a compounding of investors financial goals and their concerns virtually the social , environmental , and ethical (SEE ) issues (UK Social Investment Forum , 2005 . SRI is considered a thudding investment exercise that takes into consideration the social , environmental , and ethical outcomes that may be borne out for the selection , retention and implementation of investments , both official and negative , within the set apartting of stringent financial analysis (Mansley , 2000As socially responsible investors conventionally invest in these socially responsible companies , the performance of socially responsible companies is a small element in their performance . bulk of the studies have presented an out-performance for SRI portfolios compares with more than traditional investment approaches , even if such differences do not always present as statistically significant . When particular dimensions of sustainability are investigated , more significant and demonstrable results are brought forward , hinting that some facets of corporate social responsibility may also contribute shareholder value It is thus worthy for Thames to harness efforts for exercising strong corporate political relation . Eventually , this ma y spell out sustained buck private-enterprise(a) wa! ges for the Thames enterprisec . The water effort is regulated by the governing body delegation , OFWAT which , as can be seen in the Case canvass , is demanding that more of Thames profits should be spent in repairing leaks . Should private companies be subjected to regulation in this way40 marksYes , I personally believe that there should be government agencies that OFWAT that will compel in camera operated organizations to give more for worthwhile causes . Apparently , not all organizations are bent on complying with government-mandated policies , and have to be ` threaten with gravid fines as in the case of Thames Water . In the long term , this mandate of fixing the leakage problem will be good for Thames Water Good financial preparation is the key - they just need to plan how much of their resources will actually go to this cause . They still have a very comfortable profit margin and may be able to allot this to addressing their leakage problems . Better til now , t hey could work on image construction efforts that would effectively uphold solicit public support for water saving programs . In all these efforts , the calling card of Directors of Thames has to take the decisive leadCurrently , there has been a burgeoning interest in corporate brass contribution acknowledging it as a crucial component of the CSR concept . Corporate controversies and the need to protect minority shareholders interests for instance , are reasons privy the development of corporate government codes in several countries and corporations . bulk of corporate giving medication codes provide recommendations to promote good corporate governance and increase transparency and disclosure (Mallin , 2002 Apart from this , the concepts of sustainable development , corporate responsibility and corporate citizenship have taken root in the corporate world . Although comprehensive investigate treats the handle of corporate governance and sustainable development indi vidually , less attention has been give to the inter! action between these fields . If I were a Thames Board member , I would pick up myself if going into the CSR and corporate governance equation would be worthwhile in the long term Empirical data suggest that it will be worthwhile in securing long term competitive advantage . As proof of this , Ricart , Rodriguez and Sanchez (2005 ) tried to close the gap by poring over how corporate governance systems are transforming in to integrate sustainable development thinking into them . The researchers did so by analysing the governance systems of the 18 corporations that are market vault of heaven leaders considered by the Dow Jones Sustainability cosmos Index (DJSI World . In general the objectives of the are two-fold : to analyse in depth how and to what completion DJSI World leaders are incorporating sustainability into their corporate governance systems and to develop a beat for sustainable corporate governance ground upon corporate governance and sustainable development theories , and built upon a posteriori research of the DJSI track companies corporate governance systems (Ricart et al 2005 . In the end , Thames Water must realize that it may even be a substitute in reputation that would receive whether or not they would stay and survive in the industry . It must also be noted that Thames Water s temper of business is hence customer intensive and the credibility realized among consumers is very crucial . There seems to be no bringing grace for the company ascertaining along all the perspectives of the balance Scorecard , but on Financials . On this perspective , the figures are in Thames favor . The next perspective , the Customer perspective definitely necessarily improvement , with the rising rate of customer complaints . Best job holds also need to be looked into , as there seems to be no long-term direction in crafting best business practice .

occupancy Development is also at luck the company is being up for sale without having a clear evaluation of how its value may be improved for long-term sustainability . There has been no mention about how it puts premium on the development of its leaders and its people but if it is derelict with its responsibilities towards customer , the environment , and society at large , it is easy to accept that it does not put emphasis on this important outlook as wellThe answer to all of Thames problems is good will initiation from the top . How important is the Board of Directors of Thames Water in spearheading these change efforts ? Corporate governance systems present quartette main approaches , to wit agency theory (Fama and Jensen , 1983 , the legalistic perspective (Ci eri et al , 1994 , resource dependency (Pfeffer , 1973 , and class hegemony (Domhoff 1969 their theoretical origins are , individually , economics and pay , corporate law organizational theory and sociology , and Marxist sociology . The agency theory views the modern corporation as a tie-in of contracts between principals and agents and has made valuable insights into many aspects of the manager-shareholder conflict (Daily et al , 2003 ) and , as so into the role of boards (Aguilera and capital of Mississippi , 2003 . This suggests that Thames water ought to live up to its contract with all its stakeholders namely its direct consumers , the environment , and societyThe legalistic view discusses that boards contribute to the performance of their firms by accomplishing their legally mandated responsibilities that is to differentiate , corporate leadership without actual flutter in periodic operations (e .g . Williamson , 1964 . The resource dependence perspective views boards a s important boundary spanners that provide informatio! n to executives and are able to succeed resources for company operations (e .g . Pfeffer , 1973 . Finally , the class hegemony perspective views boards as a means to perpetuating the powers of the ruling capitalist elite and its control of social and economic institutions (e .g . Mills , 1956 . There may be legal implications for Thames in not complying with government mandated service standards . As such , it must stop using firefighting measures in addressing its current problems instead , it must strive to look at things from the long term . It must start acting on a clear conscience and consider all the way if they walk their smatter . Being values-driven in all their strategies and decisions may be worth looking intoThe Thames Water Board has to set out directives on strengthening its corporate social responsibility thrusts . Improvement of its ` kibibyte image , being customer centric , which shall eventually help them solicit customer support for water conservation progr ams . However , while this is still not in place , OFWAT and other external groups have to exert a sensitive full point of `pressure on Thames for it to comply and behave in consistency with public expectationsIn cases when organizations seem to forget its responsibilities apart from earning money for co-owners , it is domineering that external bodies regulate their actions . This would compel enterprises - cue them stringently - about their responsibilities as a corporate citizen . For Thames , operating(a) as a responsible corporate citizen means building a good corporate reputation especially among its consumers . initially this means assault and battery out more funds for fixing its leakage problems unless certainly , a balance between profitability and social responsibility may be arrived at with consensus . This also means exercising good corporate governance and complying with the standards put forrad by external regulating bodies . It must also give attention to its employees , as stakeholder theory asserts that they ! are among Thames Water s stakeholders with whom they have a psychological contract . In the end , these efforts shall change how everyone perceives the company Yes , the process is long , muffled , and costly - but in the long term , it shall sure be worth Thames Water s whileReferencesAguilera , R .V . and Jackson , G (2003 , The cross-national diversity of corporate governance : dimensions and determinants , Academy of charge refresh , Vol . 28 No . 5 , pp . 6-10Cieri , R .M , Sullivan ,.F . and Lennox , H (1994 . The fiduciary duties of directors of financially dissolute companies . Journal of Bankruptcy Law and Practice , Vol . 3 No . 4 , pp . 405-22Daily , C .M , Dalton , D .R . and Cannella , A .A (2003 . Corporate governance : decades of dialogue and data . Academy of trouble go off Vol . 28 No . 3 , pp . 371-82Dodd , E .M (1932 . For whom are corporate managers trustees ? Harvard 1145-1154Domhoff , W .G (1969 . Who Rules America ? Englewood Cliffs , NJ Prentice-HallF ama , E .F . and Jensen , M (1983 . Separation of self-will and control Journal of Law and political economy , 26 (2 , 301-25Kahn , F (1997 . Pandora s box : managerial discretion and the problem of corporate philosophy . UCLA , 579-629Mallin , C (2002 . Editorial discussion . Corporate Governance , 10 (4 253-5Mansley , M (2000 . Socially responsible investment : a carry for pension funds and institutional investors . Sudbury : reminder PressMills , C .W (1956 . The business leader Elite . London : Oxford University PressMitchell , R .K , Agle , B .R . and Wood , D .J (1997 . Toward a theory of stakeholder acknowledgement and salience : defining the normal of who and what really counts . Academy of guidance Review , 22 (4 , 853-86Pfeffer , J (1973 . Size , composition , and function of hospital boards of directors : a study of organization-environment linkage Administrative information Quarterly , 18 (3 , 349-64Post , J .E , Preston , L .E . and Sachs , S (2002 . Managing t he blanket(a) enterprise : the new stakeholder view ! . California Management Review , 45 (1 , 6-28Radin , T (1999 . Stakeholder theory and the law . Unpublished speech , Darden Graduate School of Business Administration , 1-4Rodriguez , M .A , Ricart , J .E . and Sanchez ,(2002 . Sustainable development and the sustainability of competitive advantage : a propellent and sustainable view of the firm . Creativity and Innovation Management 11 (3 , 135-46The Canadian Democracy and Accountability Commission (2002 . The new balance sheet : corporate profits and responsibility in the 21st century Toronto : Thistle PrintingUK Social Investment Forum (2005 . Retrieved on October 15 , 2005 from HYPERLINK http / web .socialinvest .org www .socialinvest .orgWilliamson , O .E (1964 . The Economics of discretional Behavior Managerial Objectives in a Theory of the blind drunk , Prentice-Hall , Englewood Cliffs , NJ ...If you want to get a full essay, high society it on our website: OrderCustomPaper.com

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