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BA-514: Ethics Of Business

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In BA-514, Ethics of Business, we examined Freeman’s stakeholder theory and learned that stakeholders fall into one of two categories: Internal like employees, managers and owners, or External like suppliers, customers, society government, competitors, and environmentalists. A successful corporation should concern itself with how it benefits all of its potential stakeholders because, according to the General Systems Theory, the corporation and the stakeholders cannot operate independent of each other.
I agree that Welch was a great manager. He oversaw GE’s outstanding 20-year record by generating 23% per annum total shareholder return. However, he was not a successful CEO in his observation of GE’s corporate social responsibility (CSR). He didn’t realize that being involved in CSR can lead to innovation and also presents an opportunity to increase a corporation’s competitive capability in the long-term.
All initiatives that Welch launched at GE were centered on increasing profits and market share. The ambitious financial objective was his only target and the apparent stick by which he measured success. He didn’t consider anything else except pursuing a #1 or #2 position in any given division.
Welch’s competitive spirit, which was most likely fostered at an early age, …show more content…
In my opinion, corporate social responsibility index (CSRI) from the Boston College Center for Corporate Citizenship (https://ccc.bc.edu/index.cfm?pageId=490) is a good one. CSRI evaluates corporate from three aspects: “Does the company contribute positively to its surrounding community in a socially and environmentally responsible? (Citizenship); Is the company business run in a fair and transparent fashion? Do stakeholders associate the company with high ethical business standards? (Governance); Are employees treated fairly and paid a decent wage? Does the company invest in developing employee skill sets and career opportunities?

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