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The Relationship Between A Company's Profits and Its Responsibility to Other Stakeholders (Essay Sample)


The Relationship Between A Company's Profits and Its Responsibility to Other Stakeholders


The Relationship Between A Company's Profits and Its Responsibility to Other Stakeholders
“John Mackey, cofounder and co-CEO of Whole Foods Market, and Thurman John Rodgers, founder and CEO of Cypress Semiconductor, are both successful businessmen whose companies make profits for their investors. What the two disagree about is the relationship between a company's profits and itsresponsibility to other stakeholders — customers, employees, vendors, communities, and the environment. Mackey does not agree with American economist Milton Friedman that (in Mackey's words) “the only social responsibility a law-abiding business has is to maximize profits.” Rodgers argues that Mackey sacrifices his responsibilities as a businessman to altruism.”
Putting Customers Ahead of Investors by John Mackay (Rottenberg 452) and Put Profits First by T.J. Rodgers (Rottenberg 455) are articles attempting to argue about the significance of corporate responsibility in a company's profitability. Although the two are arguing over a similar topic, the approach they use in presenting their claims and opinions is what determines the strength and validity of their arguments. In this case, their points of argument regarding corporate responsibility might be based on policies, facts, or certain values. The nature of the claim and the availability of supporting evidence, examples, statistics, and expert opinions influence the author are potential of convincing the audience or readers. Their convincing ability is reinforced by their mastery in making logical, emotional, and personal credibility appeals the audience. Considering the above criteria, John Mackey has a better argument about the relationship between a company's profits and its responsibility to other stakeholders than by T.J. Rodgers.
According to Mackey, “enlightened corporation should try to create value for all its constituencies.” (Rottenberg 453). He further claims that the purpose of a business is defined by the needs and desires of each of its constituent members, including customers, suppliers, and the community. In the perspective of any of the constituencies, the business's purpose is allowed. Businesses which put the needs of the customer first and ahead of the investors are more likely to succeed in their adventures. In his company, success is measured by the level of value creation to all of its main stakeholders besides the fact that there exists no formula for calculating value gained by each stakeholder. Mackey supports his argument by stating that corporate social responsibility is a way of maximizing shareholder value and it should not be treated as stealing from the investors. He understands that assets in a company belong to investors, and it is the duty of the management to take care of those assets. In his personal appeal, a certain level of corporate philanthropy defines a good business and it is the investors who benefit most at the end of it. He uses his company's donations to a nonprofit organization. According to Mackey, the little donations they make “brings hundreds of new or lapsed customers” (Rottenberg 453) which benefits the investors as a marketing strategy.
John Mackey's arguments about business social responsibility are based on inductive reasoning unlike th

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