Analysis of a companies vunerability

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A company without a mission statement becomes a company that does not have a clear path towards its goals. Whether a firm is developing anew business or reformulating direction for an ongoing business, it must determine the basic goals and philosophies that will shape its strategic posture. A purpose that sets aside the firm from others is always needed it. A firm without a mission does not have a clear description of its product, market and technological areas of emphasis. Without a broad, yet confident definition of what the firm will offer, stakeholders might be reluctant to invest because they will not have a any sort of expectation, or long term vision of the company's performance (Pearce & Robinson 2009).

Define the term social responsibility. Find an example of a company action that was legal but not socially responsible. Provide the source of your findings and defend your example on the basis of your definition.

Social responsibility is defined as the idea that a business has a duty to serve society in general as well as the financial interest of stockholders. Costs and benefits are both economic and social. While economic costs and benefits are easily quantifiable, social costs and benefits are not. Managers therefore risk subordinating social consequences to other performance results that can be more straightforwardly measured. Firms must make sure that the action to assure social responsibility is taken from the top executives of the firm all the way down to its employees. I remember the AIG scandal after they had been bailed out in 2008. Martin Sullivan, the former CEO of AIG, came under fire as he testified to Congress as the chairman of the committee flashed images of the luxury hotel that had hosted an executive retreat for the company at a cost of nearly $400,000 just days after the firm's saving from collapse. AIG has admitted that the retreat took place, although it was said that the event was a reward for a group of self-employed life insurers not for AIG executives. The distinction did little to quell the outrage surrounding the revelation as the figures spent were compared to amounts owing on mortgage payments by people about to lose their homes. The committee also attacked Mr. Sullivan in conjunction with a former witness, Mr. Fuid from Lehman Brothers, for both 'refusing to accept any blame for what happened to their companies'. After all the families that suffer losses throughout the world, and were now without their homes and lifetime savings, how can you justify a pay out of this sort. There was also another incident regarding Starbucks and their usage of water in their shops. In 2008, Starbucks coffee company was accused by environmental groups of massive water wastage through the practice of leaving taps running in its 10,000 world-wide stores all day. Environmental groups said that the company was wasting millions of liters of water every day, and should review more water-efficient processes for utensil cleaning. According to Starbucks, the constant flow runs a 'dipper well' which is used for keeping utensils clean, and is run at a very low pressure. It said that the system ensured that the company met health standards in an effective way that balances water conservation with customer safety. In this case, while being socially responsible in one way, they forgot that clean water is scarce around the world, and that every drop is usable.


What sets the affirmative philosophy apart from the stakeholder philosophy of social responsibility? In what areas do the two philosophies overlap?

Perhaps the thorniest issues faced in defining a company mission are those that pertain to social responsibility. The stakeholder approach to social responsibility is very clear. Broadly sated, outsiders of ten demands that insiders' claims be subordinate to the greater good of the society. That is to the greater good of outsiders. They believe such issues as pollution, the disposal of solid and liquid waste, and conservation of natural resources should be principal consideration in principal decision making. The business side is creating a way to comply with social responsibilities in a way that lead to the generation of profit. IN the end they both have in mind the bigger picture, which is the greater good of preserving the earth. For example, creating products that are balanced against the water pollution resulting from its production if the firm cannot eliminate the pollution of water entirely and still remain profitable (Pearce & Robinson 2009).

Case Study Exercises

A. Read the following Case study and answer the following questions (page 87-92 of the text):

Chapter 3 Discussion Case - "The Poverty Business: Inside U.S. Companies' Audacious Drive to Extract More Profits From the Nation's Working Poor" (Business Week Online, May 11, 2007)Case Summary

The case presents several vignettes of poor people caught in a financial trap by dealing with companies that sell them products but bind them to enormous financial burdens. J.D. Byrider Systems, Inc. sells used cars to people with poor credit histories. Roxanne Tsosie was one such victim. She signed up to buy a used Saturn at an interest rate of 24.9 percent, far more than she could afford. She had to give the car back because she couldn't make the payments.

Jackson Hewitt, the tax preparer, gives out tax refund anticipatory loans. The problem with these loans is that the borrower ends up paying a huge interest rate just to get money a few days ahead of time. Lakissisha Thomas was a victim of this kind of loan by the company.

The case chronicles similar victims - Vincent Humphries paying $1,374 for a computer that retails for around $800, Lusia Ajurias paying a credit card interest rate of 28 percent - who are cajoled by attractive terms offered by companies that prey on their ignorance. While many of the practices are legal, to many people they cross the line into the unethical.

What is the responsibility of for-profit companies to attempt to help customers like Roxanne Tsosie see the dangers of indebtedness?

I believe the companies should tell the customers like Roxanne Tsosie the truth about the terms of the loan, the truth about the maximum retail price and make sure that she is completely aware of what the payments will be. That being said, I agree with Mr. Tyler Cowen when he says, that the only way to run a capitalist society is to allow companies to maximize their profits, which sometimes will include allowing them to sell things to people that will sometimes make them worse off. Everyone should be help responsible for the decisions they make. Most human beings have this obsession for things they cannot have. It is like a drug that gives them a quick hit, but kills them later. A salesman will make a pitch, it is up to you to do your research and know how much you will be able to spend in order to maintain your current lifestyle (Pearce & Robinson 2009).

Assuming that Byrider is acting legally, is it acting ethically?

Ethical is being in accordance with the rules or standards for right conduct or practice; pertaining to or dealing with morals or the principles of morality. Maybe the salesman was not very clear when he explained the terms of the deal to Tsosie, but is her job to ask questions, and to make sure she gets a deal she can handle. The salesman is exactly what the word states a sales man. He will try his best to make a sale, and make the business profitable. His job is on the line. Is up to the consumer to make it a deal he or she can comply with, if not then go over to another dealership. I believe Byrider is acting legally, and within their code of conduct.

Under what conditions must customers take responsibility for their decisions?

Customers should always take responsibility for their own actions. I have been in debt before, and it was all my doing. I signed for every loan, no one forced me, and no one had a gun to my head. I thought being successful meant having a nice car, and going out everyday; taking out high interest car loans, and credit cards. I believe everyone chooses the way they want to live, some find a way to make their lives work, others try to get the easy way out, and try all these make me feel good now moves. Others make the mistakes and learn from it.

Do you believe that customers who are poor credit risks deserve to be charged higher interest rates? If you say yes, are you not taking advantage of customers who can least afford to pay extra for the things that they buy?

I, being a poor credit consumer at the moment, will have to say yes, if you have a poor credit score, the interest should be higher. The only reason the credit score is low is because of all the bad decisions you have made. Someone with bad credit should be thinking of a way to get out of all debt and make their debt to income ratio a reasonable one. You're not just born with bad credit, it comes from bad decisions making, and in life those who can not make the right decisions usually end up being penalized. By giving a customer a higher interest when they can not afford to pay extra is just a simple side of the business. Maybe one that looks wrong, but the customer always has the change to build up his credit another way, or save up money to put down a bigger down payment that will lead to a lower interest rate. When it is all set and done, it is up the customer to sigh off on the loan. The power is always in your hands, and so is the pen.

Strategic Management Plan:


Describe the basic products or services, primary market, and principle technology of your selected company.

M+A+R agency will provide a new and fresh look that which has never been introduced to the advertising industry. With a unique touch from its multitalented staff, M+A+R is ready to break ground and establish itself as a powerful competitor in the advertising industry. In order to provide our "simply, modern, advertising," we have synched an edgy, nay fearless interior designer, a parallel to none creative director, and a focused marketing professional whose purpose is to take M+A+R to the very top. Let us be the first to introduce you to a world that has yet to be discovered; one of intense creations, sexy yet elegant imagination. At M+A+R the word cluttered will cease to exist, for it will be replaced by a vast sea of ideas whose number one priority will be to communicate and inform the potential customers about our clients' products or services. It is time to embrace the M+A+R's creative revolution.


Prepare a one-page (minimum) mission statement for your business or fictional firm.

M+A+R's management and ownership structure can be best described as an equilateral triangle. All three partners own 33.33 percent of the company. Three equal partners, with a vast knowledge of advertising and design. First we introduce Sabrine Mahchi, a graduate of Savannah College of Art and Design. Ms. Mahchi possesses a bachelor of fine arts with an Interior Design concentration. To her we turn to guide the company with her brilliant and unique eye for creativity and design. She will be in charge of turning our client's idea into a print design reality. Not only by meeting but by going beyond our client's expectation. She brings the edge into our advertising world. Second is my pleasure to introduce Kareem Anglin, a current advertising student at the Fashion Institute of Technology in New York City. Not to be underestimated by his student status, this man has done it all. He sees, deciphers and creates advertising. As the founder of the Meerak Group, this young man has seen success at every level, and has now joined M+A+R as our creative director to overlook and implement our advertising strategies. He brings the creative know-how but more important the experience of advertising to our company. Last we have Eri Rodriguez, a renaissance man, with incredible business ethics. He has a B.S. in Business Administration with a Marketing concentration from Long Island University C.W. Post. His knowledge of marketing derives from timeless hours of studying, and developing campaigns as a marketing professional. Eri will be in charge of railing in the big fish; he will set the cards on the table, and arrange for our clients to play the big hand. In him we trust to close the company's projected deals.

Funding will come from all three partners. Our primary operation plans include creating a logo, business cards, develop website, refine services and marketing strategy, and Testing of website on focus groups/potential buyers. M+A+R will establish itself as a premier, discount, advertising services agency for small businesses throughout the New York City area. With its unique, sexy, and innovative styles, M+A+R will create ads for the New York City markets. A city with style, need an agency that can match such. As a new competitor, M+A+R will rely on its word to mouth and its founder's strategies to secure exclusive projects throughout New York City. Our first marketing objective will be to build brand awareness through our websites and our face to face visits to businesses. The second marketing objective is revenue growth which we hope will arrive from our primary efforts. M+A+R will focus on exclusive and attractive visitors to our websites and those of the company's knowledge.