Costlo Profit Declining - Essay Example

Corporate social responsibility Costlo undoubtedly is a great business retailer in United s of America. Being the 5th biggest retailer in U.S.A, not only he has insurmountable reputation, but has a big heart for his employees and vast customer base. No beating around, he is great. As his company net Profit declining for the two consecutive quarters is certainly alarming as well as agitating not only for Costello but also for the investors and shareholders. Considering the stakeholder's theory proposed by R.Edward Freeman (Freeman, 1984,25) I visualize the first option may work out well and bring costlo back to normalcy. Stakeholder theory can be defined in various forms and flavors. A stake holder in an organization is (by its definition) any group or individual who can effect or is effected by the achievement of the organization's objective. As the employees are aware of the competitive business environment and its pragmatic repercussions on the gross and net profits of their boss, they shall certainly induce and develop a soft corner in their hearts. They shall understand their dear Costlo's depressions and aspirations. After all they have been enjoying and utilizing enormous fringe benefits from Costlo and his company over the years. These benefits are reaped and in turn their Kith and kin also benefited. As it shows that the company is paying more medical benefits that is to say that 30% more than their largest competitor. This works out to huge amounts of dollars. This differential amount shall work out to be considerable economical revenue factor in Costlo's amount. Costlo has been looking after their employees at every eventuality. Their stores are well lit; their stock houses provide ample space. And they are well hit. Amiable working conditions for his employees. Is he doing out of benevolence for his employees or may be strategy to extract and generate more work is best known to Costlo. But it works out so wonderful. It is a grand unison of mutual interpolarisation. Costlo stands by for his employees. In the same way his employees do stand by Costlo by showing their loyalty and prompt hard work. Over the years this has been happening rhythmically in a symphony. What the employees feel all of a sudden if their medical bills are cut by 30% This actually is question to be answered by his employees. In the initial stages there may be some antagonist feelings. But when they understand the problem that has cropped up in their retail stores, I am sure they will yield. No remorse. No regrets. Every day is not a Sunday. In business the sailing is not always smooth. There are rough and potholed roads with bumps and ups and downs. When the employees are enjoying over the years it is their customary duty to understand and the situation of the retail store and Costlo. Hence when they come to terms with grim position of economic revenues of the retail outlets, I am of the opinion that the employees, bounded by morality shall extend their cooperation unstinted. They shall bear the brunt and smile it off. In the event they show any regrets also may not look appreciable. It is the moral responsibility of the employees to stand by Mr.Costlo while he is declining the economical revenues. If they express remorse and regrets, it may be that they have to leave the company and seek employment elsewhere. But what the other employer may think. The employer may think skeptical and may theorize and surmise. These workers have enjoyed all these years by all the benefits extended by Costlo. When the company went in loss they are ditching Costlo and seeking employment from. What if they do not perform the same on me when, God forbid, the event may befall on me It is just like that you are not doing anything to save a sinking boat that traveled. Therefore cutting down 30% of medical expenses shall make up revenues to some extent. The other aspect of retrenching senior checkers of the checking lanes are, retailers like stuff mart and other retailers are updated with automated electronic machinery and equipment. Whereas Costlo is still depending upon age-old process of manual checkers and checker lanes. It is most advisable in such crunching conditions to retrench the senior checkers to the extent of 50%, and introduce automated electronic checker machines and other equipment. The question arises about the morale of the retrenched person and the serving personnel. A day comes for every employee to retire. It is a matte of time. It is only that they have to cross the road little earlier. it is a competitive world. If one has to run the business successfully one has to be updated and competitive and stand firmly in the competitive world. Retrenching employees by 50% and introducing automated electronic machinery and equipment will cut down the expenses largely, which may benefit the revenue position of the company. By retrenching employees and introducing latest equipment, will not only cut down the expenditure but also improves the image of the retail stores in the public view, which means an improvement in customer base. I do not think there will be any problem with the loyalty of the customers. These customers have been visiting and utilizing the services of the retail stores. They are aware of the Costlo's service to customers. As a matter of fact Costlo can employ any person or retrench any person from his own free will. The customer has nothing to do with that. It is the internal policy of the stores. Whom to employ, whom to place in which position as per their talent and efficiency, whom to transfer, whom to fire - are all the problems to do with the management and the board of directors. What is it that the customer wants A customer wants that his articles are to be delivered at the most fresh and low priced. As long as he gets what he wants, I do not think any customer grumble. After ascertaining the real position after bringing about the above cited changes costlo revenues shall certainly improve. Costlo revenues shall improve the image with the automated equipment too. There is no damage with the morality of employees. No risk is involved even in the customer base. All ends well that end well. Once Costlo improves his overall position Costlo shall smile broadly once again. Bringing pressure to reduce prices on suppliers is not taken well. It may be abortive. If suppliers are pressurized they may end to produce inferior quality goods. And inferior quality will go well with the customer. The third point is also abortive. As the advertising by media etc is very expensive if it does not click the firm may be bankrupt. Nexus-of-contracts view is excessively stockholder-centered and normatively inadequate to the determinant of other stakeholders. The response to the objections and an articulate explanations are as follows. 1.Adjucation of the rights at the time when contracts are negotiated. 2.managerial decision should be taken after the negotiation is made. Hence it is necessary that the above mentioned steps are followed and put into implementation in order to come out of the situation like bankruptcy and poor running state of the company. The situation can be treated as emergency since even the stake holders may also loose faith in the organization and stop investing capital and may step back in buying stake and shares of the company. Reference John Hasnas.. The Social Responsibility of Corporations And How to Make it Work for You.Foundation for Economic Education. (2006) Retrieved on May 21, 2006. http://www.fee.org/publications/the-freeman/article.aspaid=2729 THOMAS W. DUNFEE. Corporate governance in a market with morality.(n. d). Retrieved on 21 may 2006.< http://www.law.duke.edu/journals/lcp/articles/lcp62dSummer1999p129.htm#H1N1> AndreasSuchanek*undRdigerWaldkirch.The Task of Business Ethics. (2002). Retieved on 21 may 2006.< http://www.hhl.de/fileadmin/LS/Sustain/Publication/2002_dp_task_of_business_ethic Read More