Business is for Everybodys Benefit A business should not Just look to increase profits for the stockholders but more so look at the well being of the customers, employees, suppliers, investors, vendors, communities, and the environment. Some businesses might argue that putting the investors first will lead toa more successful company. Businesses do not flourish by putting all of their attention on Just the shareholders alone. As T. J. Rogers, founder and CEO of Cypress Semiconductor, explains in his article, Put Profits First, “It is… mply good business for a company to cater to its customers, train and retain its employees, build long-term positive relationships with its suppliers, and become a good citizen in its community. ” The social responsibility of business is to benefit not just the stockholders but also all of the constituencies. Some people believe however that it is not intelligent to put the investors second. T. J. Rogers says that shareholders are a huge part of the business world and it is important to keep them happy. He goes on to say that shareholders own stock voluntarily.
If they don’t agree with the policies put into place at the company they can vote to change them, or they can simply sell their stock. In A1 Dunlap’s article, Putting Shareholders First, he discusses how he believes that it is the companies’ social responsibility to make money. He goes on to say, “If you are not in business to make money, then you are totally misplaced in your career” (Dunlap 1). Dunlap explains how he believes that businesses have an obligation to deliver good products and services for which there is a need.
He does not in anyway believe that a company hould do anything to help its community. Businesses should not be wasting shareholders money by spending money donating to charity; he clarifies this by saying, “If you want to conduct social experiments, Join the Rotary Club or a church group. ” John Mackey, cofounder/CEO of Whole Foods Market, explains in his article, Putting Customers Ahead of Investors, it is very important for businesses to shy away from putting all their focus on the shareholders.
He believes that businesses should spread the focus to all aspects including: customers, employees, suppliers, and the ommunity. In his article he goes on to say how that the most successful businesses put the customers before the investors. Mackey explains, “In the profit-centered business, customer happiness is merely a means to and end: maximizing profits. In the customer-centered business, customer happiness is an end in itself, and will be pursued with greater interest, passion, and empathy than the profit-centered business is capable of” (194).
Mackey goes on to say that although customers are very important to a business, it should not be theyre only concern. It is also very important for businesses to be concerned with the people that they have working for them. In Kim Harrison’s article, Why Employee Recognition Is so Important, she talks about how beneficial to a company it is for an employee to be positively recognized for going beyond the normal expectations. When employees and their work are valued, their satisfaction and productivity rises, and they are motivated to maintain their good work. Praise can lead to an exceptional workplace.
Harrison explains that, “People want to be respected and valued for their group and to feel a sense of achievement for work well done or even for a valiant effort,” There are many benefits to employee recognition. It can help to reinforce behavior that is beneficial for the company. For example, the greater he employee satisfaction the less time they spend complaining and more time is spent focusing on their Job. Employee recognition can also help lower negative effects such as tardiness and absenteeism. Similarly, employees tend to have more loyalty and satisfaction scores from their customers, which will bring more profit to the company.
To onclude, there is a direct correlation between the happiness of a companys employee happiness and profits. Harrison gives an example that the Walt Disney Resort established an employee recognition program and it resulted in a 15% in staff satisfaction that resulted in higher guest-satisfaction and more returning customers (Harrison 1-2). It is also a company’s responsibility to help out in its community by donating. It is thought that to donate money to organizations is considered stealing from the investors. Alaa Rady, author of Is Corporate Social Responsibility Stealing Money from
Shareholders, explains doing extra social work not related to the firm’s operations without direct benefit for the company could be considered stealing from the shareholders. In Mackeys article he explains how donating 5% of one days profits actually benefits the company. He describes how every so often throughout the year, Whole Foods will have days where 5% of that days profits will go to a nonprofit organization. The company will focus on a group with a large membership list, and contacts all the people who support this cause and urge them to shop in their store o help this particular organization.
Mackey goes on to describe how days like this will bring hundreds of new customers who are there to support their favorite charitable organization. Mackey stresses that many of these new customers go on to be regular customers of Whole Foods. The 5% day is a great of example of how not only can businesses help increase profits but also give back to their communities. Bob Reiss, Journalist for the Entrepreneur, writes in his article, Building a Good Relationship With Suppliers, that it is vital for a company to establish a good elationship with its suppliers. Suppliers are essential to a company.
If a supplier goes a good Job with the delivery it will increase customer satisfaction and decrease returns. Also, timely deliveries are crucial to how customers view a company’s reliability. Good suppliers can give a company a leg-up on the competition based on their pricing, quality, reliability and knowledge of the industry. Reiss emphasizes how it is important for a business to be loyal to its suppliers because they are essential for a businesses good health and growth. He stresses this point by stating, “Work as ard on building a good supplier relationship as you would building a relationship with your customers. In conclusion, it is simply good business for a company to not only look at the needs of its investors but also the needs of all its constituencies. Although some people may still believe that investors and profit are the only concern a company should have. In reality it’s a companies obligation to help in its community, ensure that its employees are happy and productive, and ensure a loyalty to its suppliers. This is not to say that investors are not important as well, however a business should