Question

Corporations are managed by employees for the benefit of the stockholders. How do various decisions on philanthropy and social/political issues create either good or bad results for the stockholders? How should these decisions be made?

Answer 1

Employees are said to be the most crucial resource of any organization as resources are big waste if their is no one who could exploit them effectively and efficiently to maximize the organization profit and reach the organizational goal.Decisions taken by employees on various front effect the organziation on a whole and to that the shareholders.Suppose a decision made by a firm increases the sale sof the product producced which ahd a positive impact on profit level of the organization then it will lead to a better fianncial position as well as the balance sheet of the orghanization,this altogether will reflect in high share price of the company and also if profit increases it will be able to pay divident which will help to enhabce the brand or the goodwill of the organziation.

Employuees decision matters a lot whether it is being taken in a normal course of business or under certain political or social issue.The decision have an impact on the organizational activity and in turn it impacts the share holders who are also the owmners of the organization.Philonthropical decision help any firm to make relations with prospective and potential clients.If decision regarding this goes well then it become a lifetime opportunity but once a bad decision is taken same opportunity can get converted into threat,beacuse an opportunity missed is gain by competitor ,one mistake and you are out of market.Whwther its a social political decision or phylenthrophic decision it involves individual morality and are related to issues of ethics.An organizational image is linked to this decision making and good decsion enhabces it and bad detotiates it.For example the CSR activities led by TATA has always made it bagged almost all government projects.TATA is one of the essential organization that is involved in governments all decision making.It's reputation and relation is such that ignoring it is not possible and all this happened just becsuase of the hard working employees.The decisions undertaken by the employees including manager and other authorities must comply with moral norms and meet societal needs ,decision-making involves the recognition of moral issues, ethical judgment, behaviour intentions and ethical behaviour.