Write a two-page paper on the following prompts:Is the goal of long-term stock price maximization good or bad for society?Do corporations have social responsibility. If so, why, if not, why not?Is the

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Is the goal of long-term stock price maximization good or bad for society?

In general, the goal of stock price maximization is good for a society. There are three basic reasons why societies should maximize their stock price.

First, societies are to a large extent the owners of the stock. Most society members possess either directly or indirectly a huge stake of the stock market. Maximizing the stock price therefore improves the quality of lives of many ordinary citizens (Dobson, 1999).

It’s also vital to maximize stock prices to benefit the consumers. This is because goods and services should be produced at the lowest possible cost to encourage stock price maximization. Societies must therefore encourage the development of goods and services that consumers want and need. Societies must also generate growth in sales by providing efficient and courteous services to the consumers in order to experience stock price maximization.

The main long-term beneficiaries of are the consumers. This is because in an effort to raise profits and stock prices, societies would increase the prices of their goods and services and gouge the consumers. In a reasonably competitive economy, this would attract completion and eventually lower the prices.

Lastly, stock price maximization can be encouraged for the benefit of the employees. Societies that generally increases their stock prices expand and add more employees. Societies managed with the goal of stock price maximization tend to grow and therefore require more employees (Sang, 2010).

Do corporations have social responsibility. If so, why, if not, why not?

It’s very important for corporations to have social responsibility. According to Beal (2013), corporate social responsibility is the organization’s commitment to contribute to sustainable economic development, working with employees, the local community and the overall society to improve their quality of life. Corporations should have social responsibility whereby they should be responsible of their actions by ensuring they have a positive impact on their surroundings. Therefore, an organization’s management has an obligation towards the welfare and interests of the society in which it operates.

Many corporations hold that they have a responsibility to “give back” to society through time and money contributions, providing environmentally friendly goods and services, and a desire to improve the lives of people within their surroundings and around the globe (Carroll & Buchholtz, 2003).

By practicing social responsibility, publicly held companies should recognize the need to heed and address not only shareholders but all the stakeholders like the employees, customers, nongovernmental organizations, suppliers and government who may be affected by the behavior of a company. Failure to promote social responsibility would drastically affect the reputation of a company and even its value. The social responsibility of a corporate therefore comprises of the economic, ethical, legal and discretionary responsibilities.

Economically, corporates are expected to engage in the production of products that the consumers desire and need at a reasonable price. Corporates should maintain efficiency, profitability and put the interest of shareholders in mind. Legally, corporates are expected to comply with laws set in place to monitor competition in the market place. Corporates are ethically responsible of conducting their affairs in an honest and impartial manner. They should not only comply with the law but also ensure they anticipate and meet the norms of society even if they are not formally enacted in the law (Beal, 2013).

Reference

Beal B. D (2013). "What Is CSR?" Corporate Social Responsibility: Definition, Core Issues, and Recent Developments. N.p.: SAGE Publications.

Carroll A. & Buchholtz A. K. (2003). Business and Society: Ethics and Stakeholder Management. 5th ed. Australia: Thomson South-Western.

Dobson J. (1999). Is Shareholder Wealth Maximization Immoral? Financial Analysts Journal,September/October: 69-75

Sang P. I (2010). Stock Price Maximization and Social Welfare. Economics.