CSR Group Discussion Written Report

Q1: What is the ultimate purpose of business corporations? Why?

[Main idea: 1.前期以profit maximization為主 為夠在充滿競爭的商業世界中求存 ← 可以搵每年有幾多
business倒閉黎做ref. 2. 但長期運作則須提高social value的priority 以得到更多知名度及群眾好感 → 從而
提高可賺取的利益/獲利能力 e.g TOMS 捐鞋去非洲 / Starbucks僱用退伍軍人
https://digitalmarketinginstitute.com/blog/corporate-16-brands-doing-corporate-social-responsibility-su
ccessfully]
Regarding the ultimate purposes of business corporations, our group believed that it depends on
different periods in setting up the business.
In the short run (when they start to set up their company), most of the company should put profit
maximization as their first priority to gain higher competitiveness in their specific industry. According to
the Statistic Canada (2015), about 39,000 businesses have closed in Canada on a monthly basis in
2015 on average. It shows how cruel the business world and the competitive market was, especially
when your company has insufficient profitability, it is easy to be eliminated in the market, and that is
why there are so many small and medium enterprises that cannot tide over the startup period and
have a long run in their path. As a result, how to improve its profitability to survive in the
entrepreneurial period is the major issue of all startup corporations.

However, when it comes to the long term, the social value would become a beneficial way to gain a
better reputation by getting a good impression from customers. Generally, when the company is able
to get a good reputation, it may be able to grab more opportunities from their competitors to extend its
market to different target groups. From local to international markets and extending their target group
from teenagers to the elderly.To cite an example, TOMS is identified as a social enterprise because of
their significant contribution to our society. Blake Mycoskie the founder of TOMS is always hoping his
company can improve the poor’s lives by using their strategy called ”One For One”. It means when
one of their shoes is sold their company will donate another pair of shoes to the poor country. Their
kindness attracts people from worldwide to support their company by choosing to buy their shoes
instead of another brand. Therefore, it should be clear that if the company successfully gets a
significant amount of market share, that company can easily dominate the whole industry. Thus,
earning the greatest profit to survive in their industry.

As mentioned above, being socially responsible or being profit-maximizing depends on different

business operating periods. Under this line of thinking, we can perceive a business taking its social
responsibility is using a tool that helps the corporations enhance the profit ceiling. Therefore, rather
than saying both concepts are contradictory to each other, I would say they are mutually
complementary to each other and cannot miss one of them. On the one hand, a business should rely
on its profitability to keep the business operation. On the other hand, they should also take their social
responsibility to gain a greater profit by enhancing its prestige and image. All in All, both of the
concepts are Indispensable for running a business but they have a different priority in different
periods.
From the above hypothesis, whether the company values profit maximization or their social
responsibility, it depends on the period of setting up their corporations.

References:
https://www.toms.com/us/about-toms.html
https://www150.statcan.gc.ca/n1/pub/11-626-x/11-626-x2020014-eng.htm

Q2:What is the most important value in business among ‘effectiveness’, ‘efficiency’, ‘equity’ why?

Running an organization just like training a horse. In order to train a horse, we need to teach the
horse running toward the destination, run fast, and also have loyalty or connection with the horse. In
management, these are what we exactly need to do: attaining missions and goals, production
efficiency, and the relationship between the company and the stakeholders.

Effectiveness, efficiency, and equity are the main three components to form management.
Effectiveness means to meet the desired targets and missions in a specific time. Efficiency is vital to
boost productivity. To have a high rate of productivity, we need to minimize the production cost of
resources such as financial, technology, and information. Equity seems not about money or cost to
pay, however, that is also an important value if we want a business to run long. It is about justice,
empathy, engagement from the stakeholders (employees and partners), which I think is the most
important factor in business.

The goal of equity is what stakeholders are concerned about, not only for employees and partners but
also for the whole society, government, and our living places. Low equity can easily affect the fame of
an organization or business. In the viewpoint of employees, for example, just like the greatest concern
which recently has been under the spotlight as the rise of women power--the gender equality of
getting opportunities and economic security. This is about fairness for every employee, ensuring they
all get the same chances to chase for the highest or even something simple and normal—to make
sure they can live well when they are getting older. For business, responsible management is of
utmost importance and it is the core of a business to success. There is a wrong concept that a
company is run for money, profits, prestige, or else. To avoid being short-term alchemy, businesses
should give up their shareholders’ value and eyes on the long-term growth of the company. Then, the
mission of business cannot only aim for making maximum profits, but also the ultimate mission, which
is promoting the faithfulness of the human community, and that is what the public concern also.

Imagine the situation that employees are working in an environment where they are not able to gain
more when they pay more, the work atmosphere surely will not be lively and brings low efficiency and
poor productivity. If there are conflicts between the shareholders and employees, the effectiveness of
the business to solve problems will also be lowered. The resentment of employees then spread out to
the whole society and destroy the reputation of the company.

From the above hypothesis, we can see that equity, effectiveness, and efficiency are linked,
indivisible. But what also showed is the importance of equity, once it is threatened, the influence can
extend to society. In business, companies should never sacrifice equity to keep effectiveness and
efficiency.

Q3: What is the meaning of conscious business?

According to the definition of conscious business on Wikipedia, “conscious business means that
enterprises and people are those that choose to follow a business strategy, in which they seek to
benefit both human beings and the environment” (Kofman, 2006).

The idea of conscious business derived from the theory of corporate social responsibility, which
focused on social and environmental concerns both locally and globally rather than pursuing profit
maximization merely. However, the concept of conscious business is different from the concept of
socially responsible business. A conscious business is not only determined to be socially responsible
but also has the awareness of its impact and actions on human and environmental well-being. A
conscious business also has a clear understanding of its effect on a specific field and forms a
business plan based on its advantages that benefits our environment and society to some extent.
Therefore, the term “conscious business” holds larger meanings than the concept of socially
responsible business.

The conscious business aims to provide positive values in three categories, which are people, planet,
and profit (The Economist, 2009). The conscious business embraces the idea of “Doing no harm”,
which means that the product or service of a conscious business should not be harmful to humans
and the environment. This is contradicted by corporations that prefer to maximize their profits at any
cost when conflicts occur between the profit motive and social goods. A conscious business is not
only concerned about the external livelihoods but also cares about the interests of its stakeholders. It
creates employee benefit programs to increase employees’ welfare such as providing health
insurance and an affordable workload. Moreover, it supports the work of communities who supply raw
materials. A conscious business also adopting sustainable product packaging and building “green” or
“zero-impact” workplace facilities to replenish the environment.

● Conscious business is the trend for all the businesses in the future. USA Today reported
about the wave of millennials embracing conscious business. The Whole Food co-founder,
John Mackey, is a pioneer in the movement of conscious business along with Starbucks CEO
Howard Schultz. Many large corporations as well as small companies choose to embrace the
movement although facing the pressure to earn money because they realized the importance
of ethics and social responsibility. Our society and environment will become much better if a
huge amount of businesses turn out to be conscious businesses. The influence of actions
Conscious business does not only benefits us but also brings a positive effect to our
offsprings.

In a word, conscious business commits to take social responsibility and has the awareness of its
ability to make our environment and society better. The conscious business also provides us with a
clear response that businesses in ethics and social responsibility are more important than personal
gain and profit maximization. Corporations have the power to bring us economic prosperity and
technology innovations, but they must be aware of the consequences behind the products that pollute
the environment and the abuse of labor to maximize efficiency in the production process. Conscious
business is the kind of business we must adopt because it benefits all of us in the long run.

References:
https://en.wikipedia.org/wiki/Conscious_business
https://www.usatoday.com/story/money/business/2013/03/25/kindness-panera-bread-nordstrom-starb
ucks/1965183/
https://www.theguardian.com/business/2015/mar/21/starbucks-face-conscious-capitalism
Kofman, Fred (2006). Conscious Business: How to Build Value Through Values. Boulder: Sounds
True. ISBN 978-1591795179
"Triple bottom line". The Economist. Nov 17, 2009. Retrieved 17 April 2015.