Review - Book Report/Review Example

Therefore, businesses are increasingly seen as being illegitimate. With every story about a company that employs slave labor in third world countries, as opposed to paying Americans good wages, corporations take a beating with regards to their corporate image. Because this is an atmosphere where it is fashionable to blame corporations for the problems in society, which includes wealth inequality and environmental destruction, it is important that corporations learn how to take control of their image and overhaul their business practices, so that they do not continue to get a bad rap in the public.

Therefore, the article will be judged for how well the author attains his goal of advising businesses as to the best way that they can exercise corporate responsibility while maintaining a good profit margin. Summary The article starts by stating that companies have problems that they bring onto themselves, because they are too stuck on the short-term. They look at productivity gains that they an attain by cutting force, automating, and ignoring customer needs. They need to look at the long-term, which is cultivating customer relationships, being kind to the environment, treating their employees right by giving them a living wage and good benefits.

And, because businesses do not seem to want to police themselves, it is up to the government to police them, which means that there are more regulations that might not be good for efficiency and the bottom line. Therefore, the article is geared towards finding a solution for businesses. Specifically, the article purports to give a solution that will bring businesses and society back together, which means that businesses will exist not just to enrich themselves but also to enrich society in some way.

He proposes the solution of shared value, which is creating value for the environment while creating value for the corporation. The corporations must not be purely profit driven, because they have to also be corporately responsible. The article then goes on to discuss why corporations are not more corporately responsible. This is because the classical economists have always stated that anything that affects the bottom line, such as paying a living wage or giving benefits or being careful about the environment, is an evil in itself, because it reduces value to the shareholders of the company.

Also, sometimes corporations actually harm the environment, though externality – such as when they create pollution that they, themselves, do not have to deal with, but pass the costs of this issue onto society. Firms have excluded such externalities and other social issues from the economic thinking – dealing with these problems increase costs, and that is that. On the other hand, when there is shared value, the businesses do take these things into account. They hire disabled workers, they pay their workers more and give them more benefits, they recognize that if they don't give them health insurance that they will show up in the ER and cost society, and they try to be environmentally responsible.

The article then goes on to talk about the classical model of doing business, where businesses exist solely to provide employment and value to their stockholders. They resort to things like personnel-cutting and relocating to trim costs, but this does not result in long-term growth. It