Can Firms Do Well While Doing Good?

Another challenge for companies when considering social responsibility is the possible negative perception of shareholders. Historically, publicly-owned companies had a primary focus of maximizing shareholder value. Now, they must balance the financial expectations of company owners with the social and environmental

Since spring 2011, the KBW index shows, financial company stocks have performed up to 40% worse than other industries. In addition, job cuts are up 103% from 2012, CEO turnover is on the rise and 45% of sector employees say they intend to quit in the next two years.

Because corporations are established to profit and shareholders invest money with expectations of a greater return, managers cannot be given a directive to be “socially responsible” without providing specific criteria of checks and balances to which needs to adhere. Therefore, it is imperative to the success of a corporation for managers to not act solely but rather to act within the policies of the shareholders.

Company Q is a corporation whose stakeholders have not placed a major emphasis on social responsibility, instead it appears that the primary focus is placed on profit. With their profits on the decline, they are shying away from opportunities to help their community. By placing a higher priority on social responsibility Company Q will have the opportunity to help the community through charitable donations, employee volunteer initiatives, and creating quality jobs for the persons who live in the community. At the same time, Company Q will can also improve their public image and potentially increase profit.

Many believe that business entities should have an ethical duty to be socially responsible, to work towards increasing its positive effects on society while decreasing its negative effects. Many organizations look for opportunities to be socially responsible while also creating shareholder wealth.

From the point of view of the external environment, the effectiveness of organization would gain much more support when the company do the business with their consumers and suppliers, due to the company has provided a wonderful environment for the employees (Businessweek, 2007). Obviously, when the company’s reputations has been known and improved because

35). The number of people in the precarious jobs is rising as corporations are constantly downsizing the firms. Downsizing of corporations leads to massive layoffs and diminishing of employment securities mentioned before. In the book “Liquidated: An Ethnography of Wall Street by Karen Ho”, it was described that the concentration on wealth maximization of shareholders has shifted the focus of managers away from the creation of real value of corporations towards the creation of stock market value. Increase in the stock market price is achieved when a corporation is perceived by the market to be efficient or on the way to efficiency.

Corporate Social Responsibility (CSR) is something that affects all companies and should be an active factor in the company’s decision making. It is something all corporations need to care about. CSR is when business’ or corporations take part in an initiative or campaign for a cause that will benefit society and/or in some way make the world a better place (Taylor, 2015). Initially, Corporate Social Responsibility started to take shape around the 1950’s, but some say that it dates all the way back to the 1800s, the idea of CSR was seen (Carroll, 2007). One may think that because it is dated so long ago, it doesn’t have an important impact today nevertheless, it is proven that Corporate Social Responsibility is a pathway for entities to self benefit as they are in the process of benefitting society.

The good-to-great companies proved to be tough but good places to work - tough in the sense of rigorous, not ruthless. They realized letting the wrong people languish in uncertainty for months or years was stealing precious time in their lives that they could use to move on to something else. The great companies also knew that letting the wrong people hang around was unfair to all the right people.

Some business leaders are taking good moral decisions and the reason behind that idea is that the core part of their business strategy is to create mutual benefit for both wider society and business as well. The growing desire of top management is to find out ways to create mutual benefit for both the organizations and the stake holders but the public still believes that companies are greedy entities which make decisions only in their self-interest, even at the cost of greater public welfare. It is the utmost obligation of the companies to discern the social issues while making the decisions (Yashiro, Yoshida and Suzuki, no date; Godwin, 2006; Schwab, 1996; Godwin, 2008; Werhane, 1998; Werhane, 2002; Heath, 2008; Mehalik and Gorman, 2006).

Catalyst used a stratified random sampling technique to select the group of participants from seven leading securities firms. Names were randomly chosen for 100 men and 100 women with senior-level titles and 100 men and 100 women with non-senior level titles. Employees with the title of “managing director” or above were

As Kline (2017) stated, “Socially responsible companies can reduce their credit spread by 40%, avoid market losses from crises (saving millions), double the probability of receiving investment grade ratings, reduce share price volatility 2-10%, and reduce systematic or market risk by 4%.” More interestingly, Kline (2017) mentioned, “...the researchers found that corporate responsibility could potentially increase the market value of a company by up to 6% over a 15- year period. Market value may grow even more -- to 40-80% higher than peers ' and competitors ' market value -- for companies with strong relationships with stakeholders such as environmental and social NGOs.” Similarly, Kline (2017) voiced, “The study found several advantages on the human resources front due to retention of talent attracted to CR. Staff turnover rates are 25 to 50% lower in responsible companies, who can save around $3700 on average in wage increases to encourage an employee to stay when he or she would rather go elsewhere.” Kline (2017) brought up some engaging trends, “ In fact, in responsible companies 5% of employees say they are willing to accept a decline in compensation. These companies register a 7.5% increase in

A firm’s reputation is important because it is the description of the overall company. For a company to be successful it needs a good reputation where stakeholders can put and trust their money into the company, and where customers can trust buying products or services. The reputation of a firm enhance the credibility of the business, and build connections with the public. Customers always give description of the firm and that is how companies’ reputations are built, customers will or will not recommend the company. Good reputation will attract more customers, it will help the firm’s competitive advantage, and it will add value to the firm.

This article uses empirical research method to test the proposed assumptions by summing up multiple cases. Specifically, 10 Russian companies will be chosen and these samples will be divided into two groups. The first group has five companies, four of which are from the Fortune magazine's latest list of the world's top 500 companies and the other is based on data from the Russian Stock Exchange. Because the enterprises on the list have the strongest profitability around the world, so the selected Russian companies earn more profits than other companies in the country. In the screening process, the samples need to be sorted by rankings, and if there is no chairman’s statement shown in a one enterprise, it will be

A research study on the correlation between a company’s corporate social and financial performance: The Case of 1000 Top Earning Companies in the Philippines.