Blog 4 / Class

BETTER in Long-run or best in Short-run?


blog-longrun-071009

The blog I searched and read was about stakeholder, which is the main topic we discuss in the class. The original post: http://axisperformanceadvisors.wordpress.com/2013/08/01/capitalizing-on-goodness/

The title of the blog is Capitalizing on Goodness, and I think it is interesting to combine those two words together, the author suggests that it is right to make profit, however, please in good ways. The title itself makes me think that how the businesses make money currently; do they focus so much on profit maximizing and ignore the “goodness”? After I read the blog, I am more positive about my supporting in stakeholderism. I think if the business want to survive in a healthy condition for long-run, the directors should be more careful about the stakeholder managing. And the blog basically prove my thoughts. The author cited a paragraph from Ralph Estes, Tyranny of the Bottom Line, “……companies that treat customers, employees, communities, and the environment in a responsible and reciprocal manner do somewhat better on financial dimensions over the long run……” And he also gives examples of the big companies that are profit originated and profitable but suffering in scandals. Another citation from Ralph Estes: Why Corporations Make Good People Do Bad Things, noted that the standard Annual Report really only reflects one stakeholder group: owners or shareholders. While it may have glossy verbiage about being a good corporate citizen, the main focus is profitability. I would understand the sentences as the regulations for the reports do not force the businesses to consider the other members of the stakeholders. Thus, why should they consider? They are doing the legal things.

We all know it is not ethical to pollute the environment or squeeze the employees during the production, however, if the scandals or the disaster due to these poor managing do not happen, no one will care about them. We are all the reason for this result, as people usually enjoy the convenience provided by the products without thinking the process they are made through. Business should take a further view after it starts to make profit steadily, it should pay the “dividends” to any resources they used.

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