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BUSA-111-C71-INTRO TO BUSINESS HWK 02

Tim Severns

New Mexico State University

HKW02

3 Overall, would it be more profitable for a business to follow the economic model or the socioeconomic model of social responsibility?

I think it’s either profitable in the monetary sense or in a social sense. Starting with the economic model, it’s a focus on what the business is supposed to, with the least amount of overhead to turn a profit. An example would be the gun industry. In the economic model, that gun could be made anywhere, by anyone, constructed of out of solid material, with the capacity to house a clip that holds 100 rounds of ammunition.

In the socioeconomic model, that same gun would be manufactured in a secured warehouse, buy people with no criminal background, constructed out of a material with little impact on the environment, with a clip that would hold 10 rounds of ammunition. In this model the social implications would be considered as necessary whether for public safety or concern for the environment. In our textbook, William M. Pride Foundations of Business , page 48-49 The Pros and Cons of Social Responsibility states that arguments are based on the assumption that a business has a responsibility not only to its stockholders but also to its customers, employees, suppliers, and the general public. It’s for this reason I believe that long term, the socioeconomic model would have the greatest positive impact on people, profitability and the environment.

In addition to the maybe over simplified example that I shared above, I also reviewed a paper online written by Geoffery Heal, a Professor of Public Policy and Corporate Responsibility Columbia Business School. (Corporate Social Responsibility , 2004) In it he cites an example where the Heinz Company changed the source to which it harvests their tuna from the eastern to western pacific. Heinz incurred extra costs in doing this, but enhanced their brand by catching in an area where the dolphin by catch was much less, thus having less of an impact on the environment.

1. When a company acts in an ethically questionable manner, what types of problems are caused for the organization and its customers?

In Geoffery Heals publication reference above, (Corporate Social Responsibility , 2004) Page 8 references McDonalds and its polystyrene packaging material for several of its products. In McDonalds view they believed they were doing the right thing in terms of the environment, however they did not take the environmental groups and their view into consideration. From a customer point of view, anything that can be considered damaging to the environment, may have an impact on forecasted revenue which impacts earnings for publicly help companies.

Another example from this 2004 publication that resonates today is with the Monsanto company. Mr. Heals writes that the pesticide company that spent billions of dollars in product development to make their product less environmentally harmful, while improving crop yields, was still under public scrutiny for the perception of genetically modified foods back then. Fast forward to today and Monsanto still finds themselves in a questionable situation with public perception as a California jury awards a terminally ill man $289 million dollars for the dangers associated with the use of herbicide Roundup. (Romo, 2018) . In essence the problem is that public perception and a company’s actions go hand in hand, whether good or bad.

1.

References:

For question 3.

· William M. Pride - Foundations of Business, page 48-49

· online written by Geoffery Heal, a Professor of Public

Policy and Corporate Responsibility Columbia Business School. (Corporate Social Responsibility , 2004)