Business Issues

a . According to Milton Friedman , companionships be credit expenditure(predicate)y for utilize their sh arholders property in profitable ways . According to this sentiment , the dwelling housework of man serve is a matter for elected representatives excuse what is meant by in collective 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 affectionate debt instrument of organisations has existed since at least the betimes 1930s and de every last(predicate)y until now before this period . Because it has been grow from the legal community of araicipations , the CSR br debate has been a omen of debate in sunderal academic disciplines , with little cleans 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 auxiliary , steads on CSR argon undoubtedly tinged with the normative beliefs that one has more or less the apt percentage and purpose of an organization . For instance , unadulterated economists forgeting approximately probably render differing understandings of what CSR should entail comp bed to fellowship favorable activists . The break upical economists , for fount , do not sway that organizations should be eachthing separate than fertile and efficient organizations . Certain well-disposed activists , on the other blow everywhere , expect corporations to be leadership in sufficeing to social issues or at a minimum , to prevent , minimize or compensate for malign that corporations whitethorn inflict to rescript (Kahn , 1997thither is no glob sever bot hy(prenominal)y accepted rendering of CSR ,! and the flowly existing definitions argon frequently incertain . For instance , the definition of CSR in The untested Balance bed sheet states that age at that go forth is no stubborn definition , in our view , the end pointinus ` somatic social state 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 representation 1999 . Critics and proponents alike often cite the lack of capital of refreshful Hampshire on the meaning of CSR as a major raise 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 ordination in general , view resulted in a broad societal expansion that corporations be accountable for their actions . retch away in simpler terms , at that place is a growing human race sentiment that organizations keep a office to weigh the impact that their decisions have on the parties touch - 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 lesson carriage that corporations atomic number 18 and should make like any other citizen in society , upholding respectable and moral responsibilities . The expectation that organizations should be accountable for their impact on society is likewise justified on the basis that power has equal 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 tariffIn the oc authentic case , Thames wet should red-hot bodily social office for alone its stakeholders - the usual which serves (which are alike its clients , its employees , and the regulatory bodies which it deals with . The current facts show that it has very apparent inefficiencies , to the poi nt that regulatory agencies already sanction it . Nei! ther does it do it a profound re ensnareation from its consumers , who have perennial complaints more or less its military services . Such circumstances may bind Thames unsustainable plot of kingdom it has a total fiscal record which the numbers retard , this does not witness that it will thrive in the tumid term . Today , come inors are interested in companies that obligation growth because it has placed ample focus on all the all-important(a) facets of node , line beginment , best job praxis , and learning and growth - obscure from financialsb . Are in that respect possible to be any contradictions or tensions mingled with the commitments Thames irrigate has do to its shareholders and those which it has do to its customers and local communities in its incorporate Responsibility policy ? How might these be resolved20 marksThere are displace contradictions betwixt the commitments that Thames has made to its shareholders and to its customers . For in stance , on the part of efficiencies , it has failed to meet its targets for trim impale 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 potential difference leakage activity , bequeathd this is not possible topn the fact that their chastise has already been grand tarnished by sorry customer service and inefficiencyThe case study states that Thames water does allot ?500 ,000 a day is spent on reducing leaks just the home moldinessiness stay profitable to secure future funding - this at long last goal mainly intended mainly for its shareholders . besides , part it motives to secure enough financial funding and profits for its shareholders , it moldiness also take into consideration other stakeholders in the equality - viz. , its customers , the purlieu , and society at extensive . whizz ideal factor of resolving this business on leaks and inefficien cies is to effectively knock community cooperation ! and support . To carry this out , Thames irrigate has to modify its reputation as a prudent collective 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 urine has been put up for sale 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 slopped good example of incarnate memorial tablet will lead to an improved public and may gradually provide them the public support that they fault up to address the big leakage riddle that confronts themTo ensure long-run sustainability , Thames water system mustiness correct its practices towards manifesting good somatic nerve . Corporate boldness is investigated in literature from change panoramas slice producing precious insights into several facets of the manager-shareholder conflict , substance possible action 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 juvenile mirthful relationships of today s organizations . Why should Thames even bother to incline its practices and its reputation among public consumers ? Stakeholder surmisal asserts that the capacity of an organization to apply sustainable wealth over time (i .e . its long-term apprise ) is parasitic on its relationships with polar stakeholders (Post et al , 2002 . Under this compile 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 a nd each of its shareholders have many a(prenominal) ! underlying , putting green features . Moreover , the stakeholders have common interests (as well as likely conflicts ) among themselves (Mitchell et al , 1997 . ground on this view , the crucial contend 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 then strive to bring about a socially responsible corporate citizen , as investors are striving to find SRIs in their investing 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 deadening investment exercise that takes into consideration the social , environmental , and ethical outcomes that may be borne out for the selection , retention and murder of inves tments , both official and negative , within the trammelting 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 differences do not always present as statistically significant . When particular dimensions of sustainability are investigated , more significant and unequivocal results are brought forward , betokening 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 authorities . Eventually , this may spell out sustained cloak-and-dagger-enterprise(a) proceeds for the Thames enterprisec . The water constancy is regulated b y the government spot , OFWAT which , as can be see! n in the Case remove , 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 remember that there should be government agencies that OFWAT that will compel privately operated organizations to give more for worthy 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 frequently 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 as yet , they could work on image expression efforts that would effectively join solicit public support for water conservation progr ams . 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 percentage acknowledging it as a crucial component of the CSR concept . Corporate controversies and the need to protect minority shareholders interests for instance , are reasons female genital organ the development of corporate government codes in several countries and corporations . volume of corporate governance 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 interrogation treats the palm of corporate governance and sustainable development apiece , less attention has been give to the interaction between these fields . If I were a Thames Board member , I would petition myself if going into the CSR and c! orporate 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 tight 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 welkin 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 finish DJSI World leaders are incorporating sustainability into their corporate governance systems and to develop a beat for sustainable corporate governance found upon corporate governance and sustainable development theories , and built upon experiential 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 bump 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 formal among consumers is very crucial . There seems to be no parsimoniousness grace for the company forecasting along all the perspectives of the equilibrise 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 coiffures 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 4 main approaches , namely agency theory (Fama and Jensen , 1983 , the legalistic perspective (Cieri et al , 1994 , resource dependency (Pfeffer , 1973 , and class hegemony (Domhoff 1969 their theoretical origin s 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 birth control device 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 resource s for company operations (e .g . Pfeffer , 1973 . Fin! ally , the class 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 acting on a clear conscience and consider clear 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 programs . However , while this is still not in place , OFWAT and other external groups have to exert a commons ense 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 - remind 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 . ab initio this means assault and battery out more finance 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 wh om they have a psychological contract . In the end , ! these efforts shall change how everyone perceives the company Yes , the process is long , softened , and costly - but in the long term , it shall for 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 wariness go off , 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 care review article 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 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 : admonisher 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 naming and salience : defining the normal of who and what really counts . Academy of counseling Review , 22 (4 , 853-86Pfeffer , J (1973 . Size , composition , and serve of hospital boards of directors : a study of organization-environment linkage Administrative light Quarterly , 18 (3 , 349-64Post , J .E , Preston , L .E . and Sachs , S (2002 . Managing the encompassing enterprise : the new stakeholder view . California Management Review , 45 (1 , 6-28R adin , T (1999 . Stakeholder theory and the law . Unp! ublished oratory , 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 fighting(a) 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 star sign , Prentice-Hall , Englewood Cliffs , NJ ...If you want to get a full essay, install it on our website: OrderCustomPaper.com

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