Oftentimes CEOs become fixated on the bottom line. How profitable is the firm an

Question

Oftentimes CEOs become fixated on the bottom line. How profitable is the firm and how can we make it more profitable. Depending on the firm’s strategy (e.g., providing a product that costs less or a product that has features different from other products on the market) the attention paid to the bottom level of the Pyramid of Corporate Social Responsibility, overwhelms considerations of the top two levels of that pyramid. There are several situations mentioned in Chapter Two (e.g., Facebook’s fake news and BPs oil spills in the Gulf of Mexico) that can sidetrack a firm’s efforts to gain a sustainable competitive advantage. The text discusses ways to ensure other considerations, beyond profit alone, can influence the strategy making process. However, there may also be situations in which the bottom level is not given enough consideration. For example, when a firm devotes some of its profits to support a charity that operates contrary to the will of some stakeholders in the firm causing the firm to lose customers or sales. Identify at least two examples of firms that may have paid too much attention to the top three levels of the pyramid to the detriment of the “economic responsibilities” level of the pyramid. What are the implications of this for strategic management of the firm?

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Explanation / Answer

As multinational companies operate in different countries, their level of involvement as well as effect of the operations in the specific country where they operate is huge. Following the guidelines as well as increasing the level of safety as per the standards of their home country is very essential for each and every multinational company for operation in different countries. This is there social responsibility to maintain and care about their employees even if they are not in their own host country. Usually for reducing the cost and increasing the prophets company ignore the security situations and the labours are forced to work in the less secure situations which is against the moral obligations as well as ethical level of the society.
These multinational companies usually outsource their clothing from countries like Bangladesh where the labour prizes as well as the overall prices for manufacturing and exporting is very less as compared to the home country. This Outsourcing directly made time dependent on the manufacturing factory which comes under the authority of Bangladesh's government. Implementation regarding the norms and guidelines for the safety is a job of Bangladesh's government to ensure and strictly implement the specific guidelines to the structure of the multinational manufacturing facilities in this kind of countries. Standards are defined by the local authorities as well as manufacturer.
Modern applications can be defined as a guideline for a code of norms which have to be followed by the companies for betterment of their employees on the ethical and moral basis of the society. Following this application can be optional for a company but it's always better to follow these obligations to maintain safety and security level of the organisation.
Security laws are directly the code and conducts which a company must have to follow. If these guidelines and norms are not followed legal actions are taken against the company. These laws are imposed by the government on the manufacturers as well as actress. Going against and not implementing the specific laws would definitely start a legal action against the company.
Following the moral obligation is very essential for a company to maintain the social image as well as betterment of the organisation. Ensuring safety greatly increases the overall compatibility of the employees towards the employees and increased level of implementation of dedication from employees side.
A broad view of corporate social responsibility is better for any organisation as it provides extensive support to the overall structure of the organisation to decide the specific studies as well as controlling the overall steps involved in management of a company. Unlike the narrow corporate social responsibility, broad social responsibility directly increases the overall effectiveness of the multiple strategies which are being implemented into the organisation for the security purposes as well as other factors. Broader social responsibility norms are also responsible for creating more ethical working environment and for providing a detailed explanation of each and every step being involved in creating such environment.
For and example of Savar tragedy ,In this specific case workers, victims and families of the savar tragedy should ask for the compensation from the factory owners rather than asking it from the multinational companies. As the building was owned by local owner and the overall guidelines as well as a franchise was provided by multinational companies to the local owner. Social responsibility of the company goes to ensure the safety and security of the workplace where the workers are working for their company but maintaining these safety and security guidelines was the job of the factory owner.
Anyhow multinational companies should of the compensation to the family is as well as the worker of the specific factory due to the moral obligations and for increasing the overall ethics as well as social level of the multinational companies corporate social responsibility. As a part of their corporate social responsibility multinational companies should provide compensation to the family as well as the workers of the Savar tragedy.

Reference -https://www.theguardian.com/commentisfree/2013/may/12/savar-bangladesh-international-minimum-wage

https://deloitte.wsj.com/cfo/2018/08/17/finding-value-in-corporate-social-purpose-the-role-of-the-board/

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