Part I: The Statement on the Purpose of a Corporation
The pronouncement dubbed The Statement on the Purpose of a Corporation as published by Business Roundtable on the 19th day of August 2019 reflects corporations seeking to embrace corporate social responsibilities. For a start, the CEOs promised to deliver value to customers (The Business Roundtable, 2019). This promise is in line with the business ethics concept against exploitation. Under this promise, companies such as monopolies that can get away with exorbitant prices should be more considerate. The CEOs also promised to invest in the development and well-being of their employees, another important area of corporate social responsibility. This promise means that the companies will value employees as stakeholders, not as means to an end.
Further, the companies promised to fair and ethical to their suppliers, which is yet another reference to the issue of exploitation similar to that of customers as outlined above. Finally, the companies promised to be good social citizens by contributing to community development (The Business Roundtable, 2019). In interesting promise followed that of community development, as it involved shareholders who are the core focus for any corporation. The promise involved transparency to the shareholders. Such promise applies more to publicly traded companies where most shareholders have little say on how to run companies.
Delegate your assignment to our experts and they will do the rest.
The totality of the promises above stems in the very last clause where the companies indicate that all its stakeholders are essential. One has to wonder why companies would go out of their way to make such commitments to the public. The pronouncement included a statement about belief in the free market (The Business Roundtable, 2019). That segment provides a clue as to why the companies issue the statement. Runaway excesses of large corporations have attracted the wrath of the populace and potential for increased regulation. A negative reputation may affect the marketability of the companies while stricter regulations may limit profitability (Ferrel et al., 2019). The companies seem to preempt such adversities by improving their image through the promises made. Essentially, the seemingly selfless act of the companies is simply shrewd entrepreneurship.
Part II: New York Times Article
The New York Times article Gelles & Yaffe-bellany (2019) takes what sounds like a balanced assessment of the Purpose of a Corporation as published by Business Roundtable. However, a close reading of the article reveals that it is indirectly condemning big corporations. On the one hand, almost everything that the roundtable has promised to do is the bare minimum expected of any reasonable corporation in any civilized society. That the companies felt the need to make such a statement is almost a confession that the companies have been acting unethically. Further, the pomp and ceremony with which the companies made the pronouncement leeks of a marketing gimmick.
The said article also indirectly addresses the timing of the pronouncement. Currently, America is in the grips of the campaigns for the 2020 presidential elections. Some of the most popular candidates such as Senators Bernie Sanders and Elizabeth Warren have taken a frontal attack against big corporations and their excesses (Gelles & Yaffe-bellany, 2019). The issue of inequity has also become prominent around the world. The people who are expressing their support for the likes of Sanders and Warren or complaining about inequity also happen to be customers of the companies, which issues the pronouncement. It would be plausible to argue that the companies are simply getting ahead of a pertinent future marketing problem.
However, it is also possible that the companies that made the pronouncement are genuine in their intention to improve on their corporate social responsibility. As argued in the article, the companies may have realized that their mode of operations where only the bottom-line mattered was erroneous (Gelles & Yaffe-bellany, 2019). Therefore, the companies now seek to overcome notions such as greed and self-enrichment for the good of the community at large. However, even if the intentions of the company were noble, the pronouncement was so limited in specifics that it would be difficult to audit the companies on the fulfillment of their promises.
References
Ferrell, O. C., Harrison, D. E., Ferrell, L., & Hair, J. F. (2019). Business ethics, corporate social responsibility, and brand attitudes: An exploratory study. Journal of Business Research , 95 , 491-501.
Gelles, D., & Yaffe-bellany, D. (2019, August 19). Shareholder Value Is No Longer Everything, Top C.E.O.s Say. Retrieved from https://www.nytimes.com/2019/08/19/business/business-roundtable-ceos-corporations.html
The Business Roundtable. (2019, August 19). Business Roundtable Redefines the Purpose of a Corporation to Promote 'An Economy That Serves All Americans'. Retrieved from https://www.businessroundtable.org/business-roundtable-redefines-the-purpose-of-a-corporation-to-promote-an-economy-that-serves-all-americans
