Question

If vou were a CEO interested in addressing the needs of many stakeholders in order to maintain a healthy economy, what standards and actions should you establish for your business?

a.) Maximize profits for shareholders, minimize wage costs, and increase staffing.
b.)Emphasize that you alone can steer the company towards more ethical practices.
c.) Buy up public stock so that the company can go private again and run however it wants to.
d.)Create value for customers, invest in employees, embrace sustainability.

Answer 1

A CEO should adopt a stakeholder-focused approach to business, which includes creating value for customers, investing in employees, and embracing sustainability, rather than solely focusing on maximizing profits for shareholders. Therefore, the correct option is D.

Step-by-step explanation:

If you were a CEO interested in addressing the needs of many stakeholders to maintain a healthy economy, the standard and action that should be established for your business is d.) Create value for customers, invest in employees, embrace sustainability. Unlike the shareholder primacy view which focuses only on the interests of shareholders, the stakeholder theory posits that CEOs and managers should consider the impacts of their decisions on all stakeholders, including employees, customers, the community, and the environment.

This supports a more balanced and ethical approach to business management. It aligns with the contemporary understanding of a corporation's social responsibilities, considering that purely profit-maximizing behaviors can lead to societal and environmental costs. Therefore, by focusing on creating value, investing in employees, and embracing sustainability, a CEO can contribute to the overall health of both the economy and society.