The Great Recession of 2008, the longest economic downturn since World War II.

made one thing crystal

clear: The way organizations think about their business model needs to be altered. In the 21st century,
companies cannot just focus on maximizing their profits and solely concentrating on the profit metrics. The
American economy has already seen the implications of the aforesaid thought process. The demise of
Lehman Brothers, the bankruptcy of General Motors Corp are a few notable repercussions of the
shareholder model. Also, not to forget the several trillions of dollars loss that the economy and taxpayers
faced.
Scandals at Enron, Global Crossing, concerns about the fraudulence of accountants charged with auditing
financial statements, and questions about and investor recommendations at Credit Suisse and Merrill Lynch
have all provided rich fodder for those who question the premise of shareholder supremacy. These scandals
clearly serve as evidence of the failure of the shareholder theory — that managers primarily have a duty to
maximize shareholder returns — and the victory of stakeholder theory, which says that a manager’s duty is
to balance the shareholders’ financial interests against the interests of other stakeholders such as employees,
customers and the local community, even if it reduces shareholder returns.
In the global economy, customers, suppliers, employees, communities, and financiers — shareholders plus
bondholders plus banks and other sources of capital — are all intertwined and ideally addressing the
concerns of everyone involved is crucial.
Thus adhering to the aforementioned point of view and embracing the stakeholder business model, I believe
Roseburg Forest Products should allow the residents of Weed to use the water. From the point of view of
Corporate Social Responsibility (CSR) perspective, it would ensure that residents have access to clean
water. Also, ignoring company’s social responsibility could spell disaster for Roseburg Forest Products. In
fact, CSR should be an active part of your business plan for 2018; it’s never too late to start making a
difference. Consumers frown upon companies that ignore social responsibility and develop unethical
reputations. What's more, companies with these reputations are more likely to stumble into legal troubles,
which could result in their failure. It’s a win-win for everyone when you make money and have a positive
impact in the world.
The strongest arguments against this position are:
1) Roseburg might have to take a hit on their forecasted profits and ultimately lost a significant amount
in the short run.
2) It might also impact the existing positive relationship between Roseburg and CG Roxane.
However, my counter-argument for the aforementioned arguments will be:
1) It’s important for an organization to focus on long term strategies and growth. CSR is now more of
a direct corporate response to consumers' ever-growing demands for transparency.
2) Relationships could be enhanced by focusing on the “3 P’s” principle: people, planet, profits, rather
than impacting the whole city.
Below is the rationale why Roseburg should embrace CSR:
Cost savings –Engaging in sustainability will assist Roseburg in cutting costs in the long term.
Brand differentiation –Embracing CSR will give Roseburg the opportunity to differentiate itself amongst
the competitors.
Long-term thinking: CSR is an effort to look at the company’s long-term interest and ensuring that the
company’s future is sustainable.
Customer engagement: Using CSR can help Roseburg engage with its customers in new ways. Since the
message is about something “good,” it can often be an easier way to talk to customers. This is an underused
tool for business-to-business company communication.
Employee engagement – Along similar lines, if Roseburg’s own employees don’t know what’s going on
within your organization, they’re missing an opportunity
It also can be questioned that by following the stakeholders approach, we are ideally violating the fiduciary
duty that the organization has towards its shareholders. Legal precedent suggests that courts have granted
companies a great deal of flexibility in how they balance their stakeholders, including shareholders, in the
interests of the business. Also, it’s crucial for both the business and shareholders to understand that
corporate social responsibility is more than just a business trend or fad and change their mindset.
The stakeholder approach sets forth a new conceptualization of business, in which business is understood
as a set of relationships and its management’s job is to help shape these relationships. Business is about
how customers, suppliers, employees, financiers, communities, and managers interact to create value.
Businesses that want to stay relevant to new generations and who want to help people in need around the
world while increasing their own revenue and efficiency will benefit from embracing CSR.