Case Study 4 Questions

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Slippery Rock University of Pennsylvania *

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Management

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Feb 20, 2024

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Ginny Heltsley Case Study 4 Questions 1. Make the case for the proposition that the only legitimate purpose for a commercial business in a free-enterprise system is to maximize returns to shareholders. What is the role of the Carbon Trust from this point of view? A company usually has a goal of having financial success. One view is that the only reason for a commercial business in a free-enterprise system is to create an increase in returns to the shareholders. A company should usually only consider how to optimize shareholders’ value because it creates better profits for the company owners. The Carbon Trust’s main goal is to maximize profits, so some followers could be concerned with the company’s role due to its primary focus being on sustainable practices and using less energy. Carbon Trust’s involvement could be seen as a bigger responsibility, which could help to influence the bottom line. Keeping in mind that giving better returns to the shareholders is a main goal for some businesses, Carbon Trust’s role may be viewed more cautiously by its followers. The focus of sustainability and getting carbon emissions lower adds larger goals that go beyond the short-term financial gains that most shareholders hope can be achieved by the company. Some people may argue that Carbon Trust’s involvement in this situation could conflict with the main objective of increasing shareholder value since it could take some resources away from other projects that are more motivated by profits. There could be some concerns that extend from the emphasis on sustainable practices and that they do not always align with the shareholders’ objectives financially. 2. Make the alternative case that all business organizations have a wider social responsibility that goes beyond the pursuit of shareholder value. What is the role of the Carbon Trust from this point of view? Another point of view could argue that companies must do more for society than just increase profits for the shareholders. This can show the need for businesses to help influence society while also taking the environmental effects into account. Carbon Trust is important in this way because it encourages other companies to use more clean practices and reduce their carbon footprint. Businesses that are ready to be more socially responsible can use the trust to assist them in aligning their practices to be more environmentally friendly. 3. On which side of the argument do your sympathies mainly lie? Explain why. I am leaning more towards supporting the idea that companies have a larger social responsibility. A company’s ability to continue working effectively depends on getting the shareholders the proper returns. It is also important to consider how the business operations will affect not only society but also the environment over time. In order for a company to guarantee that their proactive approach will be taken properly, Carbon Trust can help to play a significant role in operations. A business model that can be quite helpful in doing this needs to meet the demanding changes in the community and environment. A plan that combines success financially and socially and economically might result in a more ethically strong company.

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