Reference no: EM132193242

RESPOND EACH STUDENT 200 WORDS

Rodgers vs. Mackey

Maximizing long term shareholder value is one of the objectives many businesses have in determining their growth and success. Shareholders are regarded as the owners of the companies and so, their worth should always be given the top priority before any other business is considered. However, when corporations act ethically by contributing towards their immediate societies through corporate social responsibility initiatives, they are seen to disregard the shareholder wealth maximization objective.

Organizations should strike a balance between community based charity initiatives and taking care of their real owners. Firms that fail to maximize the wealth of their owners have always been at loggerheads and may end up losing their worth in the market. Adding more value to the society than it is to the company may mean lack of understanding of the company and its objectives which is also another recipe for long term failure.

This concept is far more important to businesses, society and individuals in that its understanding facilitates proper coordination between the three extremes. The best position to approach this issue is from Mackey whose ideas stress on the need to balance between organizational objectives and societal needs.

According to Hartman, DesJardins, & MacDonald, (2018). When the long-term shareholder value is fully maximized, attention should then focus on the societal needs based on their urgency. Individuals will have a better understanding of the firm, its objectives and the focal areas before its attention is shifted to those outside its realms. Additionally, the society will know where the focus of the organization is and develop a framework that will cater for their needs, instead of depending on the corporation for all their needs.

Discussion

There are many corporations throughout the world that are successful and some that go under. The ones that survived are the ones that create items that society needs, but also sell their product at a price that people can afford.

The job of business managers is to make sure that the company's investing in technology, buying or maintaining equipment, process running correctly, people are working efficiently, and facilities are in working order. On top of that, workers need to be provided with fair wages and good benefits.

If workers feel that they are not getting treated right, they might refuse to work for the company or go on strike. These means that products for that company will not be created and the stock prices start falling. All of these items required money, money helps create the products and money in needed to pay workers.

Some of the money is from shareholders, which could also be used for investments. The more shareholders buy stocks, the more money than can flow into the company for expansion of facilities, equipment, human capital, and products. In turn, the company will produce more products in order to satisfy human needs. The company should constantly try to develop or find new ways to keep satisfying those needs.

According to Maslow (1969), humans are constantly searching to satisfy their needs that are constantly expanding. The more humans are getting satisfied, the more profitable the company and shareholder become.

In regard to charity, I believe Mackey has been successful in his company but most of their prices are higher than other corporations. According to Pecorino (2016), companies that pledge to donate to society do so by having their products much higher and are set on fixed pricing. The company uses its fixed prices in order to know that it can cover its donations to society.

This is good if customers believe that the company has good intentions and they'll keep supporting the company's vision.

However, there are many variables in society can have impacts on corporations and consumers. For example, the president can impose an increase in taxes that would cause a decrease in purchasing power for consumers. People might not be able to pay for higher prices and would go on searching for better deals to satisfy their needs.

In my opinion, I'd follow Rogers view, it would be in the best interest of the company to try and maximize profits for its shareholders ("Rethinking the Social," 2005). However, the company would have to keep on searching for ways to satisfy human needs to stay profitable.