ESM Question

[Aqualim]

Discuss the conflict large organisations face between the responsibility to the environment and community and their responsibility to their shareholders. (4 marks)

Any help would be great!

[flash36]

Tough question, I would base my answer on the fact that shareholders buy their shares to make profit, in most cases. For a LSO to act responsibly toward the community (ethical treatment of staff/customers etc) and the environment (operating 'green' and so on), all this requires more money to be spent on those areas, money which could be dividends for shareholders.

Also, strategies to act ethically to the community and environment can jeopardise productivity and profit, meaning less comes back to the shareholders.

Hope this helps.

[_avO]

What flash said is basically it, however there may be another point (however minor) that could be addressed such as creditors and banks may receive their repayment less punctually as the business is using money towards the community and the environment. I may be wrong as the business may have sufficient capital in which they can afford to do both and satisfy both stakeholders at the given period.