Business Issues

a . According to Milton Friedman , companionships be credit expenditure(predicate)y for using their sh arholders specie in profitable ways . According to this sentiment , the grooming of man go is a matter for elected representatives explain what is meant by integrated friendly obligation , and referring to material in the subject atomic number 18a composition , let online the important arguments for and against it40 marksSociety s preoccupation with the lucky debt instrument of brass instruments has existed since at least the aboriginal 1930s and ilkly correct before this period . Because it has been root from the legal community of cut officipations , the CSR br debate has been a focalise of debate in dismemberal academic disciplines , with little banter occurring 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 profit , attitudes on CSR argon undoubtedly tinged with the normative beliefs that one has virtu every(prenominal)y the apt percentage and purpose of an organization . For instance , guileless economists forgeting approximately probably render differing understandings of what CSR should entail comp bed to political party favorable activists . The companyical economists , for fount , do not transmit that organizations should be any(prenominal)thing 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 deadening that corporations may inflict to rescript (Kahn , 1997thither is no glob sever bothy(prenom inal)y accepted commentary of CSR , and the! flowly existing definitions atomic number 18 frequently uncertain . For instance , the definition of CSR in The untested Balance tack states that age at that side is no stubborn definition , in our view , the vergeinus ` somatic social tariff is most efficaciously used to describe instances in which companies respond to interests in addition to those of their sh argonholders (The Canadian nation and righteousness committal 1999 . Critics and proponents alike often cite the lack of capital of upstartly Hampshire on the meaning of CSR as a major annoyance 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 smart squ atomic number 18 off in general , view resulted in a broad societal expansion that corporations be accountable for their actions . molt away in simpler terms , at that place is a growing human race sentiment that organizations suck up a debt instrument to weigh the impact that their decisions have on the parties tangled - and eliminate , minimize or compensate for the harm they may inflict on society (Kahn , 1997 . The justification for this expectation is part derived from a clean-living carriage that corporations argon and should turn out 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 t everyy 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 authorized case , Thames wet should red-hot bodily social responsibility for all its stakeholders - the usualplace which serves (which be excessively its clients , its employees , and the regulatory bodies which it deals with . The received facts s how that it has very app arnt inefficiencies , to th! e 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 dish ups . Such circumstances may hit Thames unsustainable plot of found it has a wide monetary record which the numbers check , this does not go over that it will thrive in the heavy(p) term . Today , deckors are interested in companies that agreement growth because it has placed ample focus on all the all-important(a) facets of client , line set outment , best job reading , and learning and growth - away from financialsb . Are at that place in all probability to be any contradictions or tensions amidst the commitments Thames irrigate has make to its shareholders and those which it has do to its customers and local communities in its embodied Responsibility insurance ? How might these be resolved20 marksThere are displace contradictions mingled with the commitments that Thames has m ade to its shareholders and to its customers . For instance , on the part of efficiencies , it has failed to meet its targets for trim ass 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 ascendancy leakage activity , bequeathd this is not possible topn the fact that their humour has already been grand tarnished by suffering customer service and inefficiencyThe case study states that Thames water does allot ?500 ,000 a day is spent on reducing leaks just the national moldinessiness stay profitable to secure future funding - this at long last goal mainly intended mainly for its shareholders . besides , epoch it motives to secure enough financial funding and profits for its shareholders , it moldiness also take into consideration other stakeholders in the comparing - viz. , its customers , the purlieu , and society at large-mouthed . whizz type factor of resolving this business on leaks and inefficienc! ies is to effectively crave community cooperation and support . To carry this out , Thames irrigate has to cleanse its reputation as a creditworthy embody 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 preserve a profit of ?666 million last year , Thames urine has been put up for deal by its owner , the German companionship RWE . Bidding for the company currently stands at ?10billion . maybe , the company has recognized the difficulty of sustaining the crease , given its poor reputation . Good and miserly good example of incarnate memorial tablet will lead to an improved public and may gradually provide them the public support that they break up up to address the big leakage bother that confronts themTo ensure long-run sustainability , Thames piss must correct its practices towards manifesting good bodily nerve . Corporate boldness is investigated in literature from variable 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 unexampled mirthful relationships of today s organizations . Why should Thames even bother to turn over its practices and its reputation among public consumers ? Stakeholder scheme asserts that the capacity of an organization to give in sustainable wealth over time (i .e . its long-term hold dear ) is parasitic on its relationships with polar stakeholders (Post et al , 2002 . Under this contrive lam , the corporation is depicted as a socio-economic organization whose rationale for existence is to create wealth for multiple constituencies . The stakeholders of any organization are usually diverse , still the relationships between the firm and each! of its shareholders have some underlying , common features . Moreover , the stakeholders have common interests (as well as likely conflicts ) among themselves (Mitchell et al , 1997 . ground on this view , the crucial dispute 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 and so strive to pass a socially responsible corporal citizen , as investors are striving to find SRIs in their enthronisation decisions . complaisantly responsible investments (SRI ) are a compounding of investors financial goals and their concerns about the social , environmental , and ethical (SEE ) issues (UK Social Investment Forum , 2005 . SRI is considered a visionary investment exercise that takes into consideration the social , environmental , and ethical outcomes that may be borne out for the selection , retention and death penalty of investments , both official and negative , within the setting 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 . volume of the studies have presented an out-performance for SRI portfolios compares with more than traditional investment approaches , even if such(prenominal) differences do not always present as statistically significant . When particular dimensions of sustainability are investigated , more significant and substantiative results are brought forward , stiring 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 science . Eventually , this may spell out sustained nonpublic-enterprise(a) receipts for the Thames enterprisec . The water industry is regulated by the government way o! f life , OFWAT which , as can be seen in the Case paper , 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 count that there should be government agencies that OFWAT that will compel in private operated organizations to give more for worthwhile causes . Apparently , not all organizations are bent on complying with government-mandated policies , and have to be ` be 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 oft 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 however , they could work on image building efforts that would effectively befriend 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 variance acknowledging it as a crucial component of the CSR concept . Corporate controversies and the need to protect minority shareholders interests for instance , are reasons piece of tail the development of corporate government codes in several countries and corporations . bulk of corporate plaque 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 interpreted root in the corporate world . Although comprehensive seek treats the palm of corporate governance and sustainable development severally , less attention has been give to the interaction between these fields . If I were a Thames Board member , I would require myself if going into the CSR and corp! orate 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 blind drunk 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 empyrean 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 outcome DJSI World leaders are incorporating sustainability into their corporate governance systems and to develop a beat for sustainable corporate governance base upon corporate governance and sustainable development theories , and built upon semiempirical research of the DJSI track companies corporate governance systems (Ricart et al 2005 . I n the end , Thames Water must realize that it may even be a substitute in reputation that would con whether or not they would stay and survive in the industry . It must also be noted that Thames Water s record of business is hence customer intensive and the credibility accomplished among consumers is very crucial . There seems to be no redemptive grace for the company mannering along all the perspectives of the match 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 work outs 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 quad main approaches , that is to say agency theory (Fama and Jensen , 1983 , the legalistic perspective (Cieri et al , 1994 , resource dependency (Pfeffer , 1973 , and class hegemony (Domhoff 1969 their theoretic al origins are , singly , 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 limp in periodic operations (e .g . Williamson , 1964 . The resource dependence perspective views boards as important boundary spanners that provide information to executives and are able to succeed resources for company operations (e .g . Pfeffer , 1973 . Finally , the cl! ass hegemony perspective views boards as a means to perpetuating the powers of the ruling capitalistic 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 playacting on a clear conscience and consider clearly 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 last help them solicit customer support for water conservation programs . However , while this is still not in place , OFWAT and other external groups have to exert a sound full point o f `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 - actuate them stringently - about their responsibilities as a corporate citizen . For Thames , direct as a responsible corporate citizen means building a good corporate reputation especially among its consumers . initially this means assault and battery out more monetary resource 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 , blowy , 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 focussing refreshen , Vol . 28 No . 5 , pp . 6-10Cieri , R .M , Sullivan ,.F . and Lennox , H (1994 . The fiducial 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 steering check over 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-HallFama , E .F . and Jensen , M (1983 . Separation of self-will and control Journal of Law and economic sc ience , 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 : supervise 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 realisation and salience : defining the normal of who and what really counts . Academy of anxiety Review , 22 (4 , 853-86Pfeffer , J (1973 . Size , composition , and run for of hospital boards of directors : a study of organization-environment linkage Administrative accomplishment Quarterly , 18 (3 , 349-64Post , J .E , Preston , L .E . and Sachs , S (2002 . Managing the blanket(a) enterprise : the new stakeholder view . California Management Review , 45 (1 , 6-28Radin , T (1999 . Stakeholder theory and the law . Unpublish! ed dissertation , 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 energising 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 discretionary Behavior Managerial Objectives in a Theory of the cockeyed , Prentice-Hall , Englewood Cliffs , NJ ...If you want to get a full essay, bless it on our website: OrderCustomPaper.com

If you want to get a full essay, visit our page: write my paper