Smith Insurance Company Case Study

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Question 2. Assuming that being led by its CEO John Smith, Smith Insurance Company is a big company that faces increasing demand for insurance. Over the past 3 years, the competitors are almost equal in their performance to Smith’s insurance, yet not their involvement in social responsibility. (a) Suggest the best approach of the following approaches for John to use in order to better position the company against the competitors. Justify your answer with advantages of the approach and a relevant example • Obstructionist stance • Defensive stance • Accommodative stance • Proactive stance Answer: (a) Corporate social responsibility (CSR) is management’s obligations to make decisions and take actions to contribute the welfare and interests of…show more content…
Managers often put shareholder interest above all other stakeholders and managers say society should make laws if change is needed. In Smith Insurance Company, defensive stance will have side effects on the company. With defensive stance, managers in the company only obey the laws and regulations, but they do not consider their corporate social responsibilities to take some actions to benefit other stakeholders except shareholders. Managers only focus on the maximum of the profits and to meet the expectations of shareholders, but they do not take account on benefit the whole society. The decisions of managers are legal, but they may be unethical. Finally Smith Insure Company may lose competitive advantage and customers in the market, and hence lost…show more content…
A stakeholder can affect or can be affected by the organisation. There are various stakeholders include primary and secondary stakeholders. The primary stakeholders who have direct economic transactions with the company such as customers, employees, and suppliers, etc. The secondary stakeholders involve the communities, government, the general public and business support groups and the activist groups and the media, etc., who do not directly engage in the economic exchange in the organisation. The stakeholders of Air New Zealand include customers, employees, shareholders, suppliers, governments, partners, special interest groups, non-governmental organisations and creditors and communities, etc. Now the stakeholders of customers, employees and communities will be analysed. The benefits of Air New Zealand social responsible practices that may influence the three of their stakeholders: customers, employees and

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