[size=150]GRE essay sample[/size]
Topic “The only responsibility of corporate executives, provided they stay within the law, is to make as much money as possible for their companies.”
Is profit maximization the only responsibility of corporate executives, provided they stay within the law? I don’t think so. While I concede that the primary objective for corporation executives is to make as much money as possible for shareholders, they also have duties for employees, consumers, community and environment. For corporation owes its existence to society, its support to local community, as well as its human capital to employees. Therefore, executive responsibility goes beyond profit maximization and legal compliance.
To begin with, corporations are created by government which owns its existence to society. It follows that corporations are actually made by society and therefore are responsible to serve the public’s best interest. Profit maximization is one manifestation of corporate social responsibility. I am saying that not just because it provides capital return to the benefit of shareholders, but because the capital formation is the mainspring of material progress which is crucial for human survival and thrive. However, making as much money as possible is by no means the only responsibility of corporate executives. To adequately address the issue, it may helpful to consider in turn the relationships between corporations and other groups that also make claims on company resources, such as employees, consumers, and environment.
First, in modern times when the world is dominated by knowledge and information, Brand identity and intellectual property are considered the most valuable assets in corporations. On one hand, workers provide human capital for sustainable development of corporation; therefore, corporation has to ensure a consistent standard of care for its employee, enhancing safety, health and well-being. On the other hand, consumer is the end user of product and services provided by corporations, executives thus are held accountable for the product safety and quality which have a direct impact on user’s well-being, so does business success. In addition, corporate responsibility beyond legal compliance is economically sound, because it is an investment in long-term success of the enterprise. Value creation and consumer recognition are crucial for corporations to survive in a world of fierce competition and shrinking profit margin. To maximize profit, executives need to hone their competitive edge, as well as embellish company reputation. Both calls for entrepreneur integrity and responsibility beyond mere legal compliance. Henry Ford was blamed by the business community for paying wages twice the going rate and making new care affordable to even his own workers. But his prescience was rewarded with enormous profits and Ford became the most influential business leader in automobile industry. This classic win-win scenario illuminates the linkage of social relationship to intrinsic product value.
Secondly, in a process of modernization, business activities are held accountable for over-exploitation of resources, contamination of natural environment, and extinction of most species. Due to the reason of culpability, executives have an indisputable responsibility for preserving the natural resource and biodiversity. Negligence of corporate social responsibility is considered irresponsible for future generations, which severely undermine business reputation of an enterprise. Over the past decade, corporate executive’s attitude towards environmental issues has become major considerations in consumers’ purchasing decision. This trend is reflected in the popularity of organic food and environmental-friendly products. Executives who have made public commitments to environmental sustainability, like CEO of Walmart and GE, are regarded as both innovative and responsible. In short, with the increasing public awareness of sustainable development, corporate executives are responsible for and also can benefit from preserving the value of our common inheritance.
In today’s increasingly interconnected economy, corporations are being measured for performance in every aspect, including economic, social and environmental. CSR goes beyond mere legal compliance and profit maximization. For corporations have indisputable responsibilities for the communities which they drew employees from and sell products to, as well as the environment within which they conduct business operations.