The Primary Goal of a Firm Has Been Held Out to Be Shareholder Wealth Maximization Which Translates to Maximizing Stock Prices. in Light of This Statement, Do You Think Firms Have Any Responsibility to Society?
MBC 703 –CORPORATE FINANCE & ACCOUNTS ASSIGNMENT:
The Primary goal of a firm has been held out to be shareholder wealth maximization which translates to maximizing stock prices. In light of this statement, do you think firms have any responsibility to society?
BY
Akanji Emmanuel olusegun
BSU/MS/MBA/08/3104
FACULTY OF MANAGEMENT SCIENCE
MASTER OF BUSINESS ADMINISTRATION (MBA)
BENUE STATE UNIVERSITY MAKURDI.
AUGUST,2010
1.0 Introduction:
The fundamental economic role of business is to make profit and to maximize shareholders wealth. Therefore, this primary objective is carried out in the society. Firms Operations are not performed in a vacuum but in an environment. Business Organizations are open system that must interact and respond to the environment. The performance of the Firm therefore is influence by the environment. The environment of business is made up of all the elements that are relevant to an organization’s operation though outside its control. This means that to survive in business environment, firm must anticipate, interact, act and react to environments to utilize the opportunities (maximizing Shareholder wealth) and avert the threats of not getting involve in(corporate social responsibilities) protect the interest of the societies.
1.1 What is Corporate social responsibility?: Corporate social responsibility (CSR), also known as corporate responsibility, corporate citizenship, responsible business, sustainable responsible business (SRB), or corporate social performance, CSR is a form of corporate self-regulation integrated into a business model. Ideally, CSR policy would function as a built-in, self-regulating mechanism whereby business would monitor and ensure its support to law, ethical standards, and international norms. The definition of CSR used within an organization can vary from the strict "stakeholder impacts" definition used by many CSR advocates and will often include
The Primary goal of a firm has been held out to be shareholder wealth maximization which translates to maximizing stock prices. In light of this statement, do you think firms have any responsibility to society?
BY
Akanji Emmanuel olusegun
BSU/MS/MBA/08/3104
FACULTY OF MANAGEMENT SCIENCE
MASTER OF BUSINESS ADMINISTRATION (MBA)
BENUE STATE UNIVERSITY MAKURDI.
AUGUST,2010
1.0 Introduction:
The fundamental economic role of business is to make profit and to maximize shareholders wealth. Therefore, this primary objective is carried out in the society. Firms Operations are not performed in a vacuum but in an environment. Business Organizations are open system that must interact and respond to the environment. The performance of the Firm therefore is influence by the environment. The environment of business is made up of all the elements that are relevant to an organization’s operation though outside its control. This means that to survive in business environment, firm must anticipate, interact, act and react to environments to utilize the opportunities (maximizing Shareholder wealth) and avert the threats of not getting involve in(corporate social responsibilities) protect the interest of the societies.
1.1 What is Corporate social responsibility?: Corporate social responsibility (CSR), also known as corporate responsibility, corporate citizenship, responsible business, sustainable responsible business (SRB), or corporate social performance, CSR is a form of corporate self-regulation integrated into a business model. Ideally, CSR policy would function as a built-in, self-regulating mechanism whereby business would monitor and ensure its support to law, ethical standards, and international norms. The definition of CSR used within an organization can vary from the strict "stakeholder impacts" definition used by many CSR advocates and will often include
References: Bulkeley, H. (2001). "Governing Climate Change: The Politics and Risk Society". Transactions of the Institute of British Geographers, New Series, Vol.26, No.4. Davis Lewiz (2001) “Corporate Social Responsibility Monitor” Global Public Opinion on the Changing Role of Companies http://www.environicsinternational.com/ Fields, S Freeman K(1984). “Business and Corporate Social Responsibility” New York. Fry, L. W., G. D. Keim, R. E. Meiners (1982). "Corporate Contributions: Altruistic or for Profit?" The Academy of Management Journal, Vol.25, No.1. Gary Woller, (2004) “Business Responsibility and Society- A Public Relation Perspective” Mark R Michael E. Porter(2001) a leading authority on competitive strategy and head of the Institute for Strategy and Competitiveness at Harvard Business School Sacconi, L Sullivan, N.; R. Schiafo (2005). Talking Green, Acting Dirty (Op-Ed). New York Times, June 12, 2005. Sun, William (2010), How to Govern Corporations So They Serve the Public Good: A Theory of Corporate Governance Emergence, New York: Edwin Mellen, ISBN 9780773438637