Introduction

According to the shareholder theory, shareholders are just one of a company's many stakeholders.

Therefore, a company's true success is measured by how well it treats all of its stakeholders, not just those

who stand to gain from its shares. Therefore, businesses should aim to maximize value for their

stakeholders. Freeman (2007) defined stakeholders as the individuals, groups, or organizations with an

interest in the operations and results of the firm, since the achievement of the firm's goals depends on

them. It has been noted by Stanwick & Stanwick (2016, p. 63) that: “Traditional stakeholders for a firm

include employees, suppliers, stockholders, customers, the government, local communities, and society as

a whole”

A hypothetical situation has been given, in which corporate managers have authorized a corporate

donation to a local charity. Therefore, the discussion should clarify how stakeholder supporters would

evaluate the morality of this donation.

Since business operates in a society, it is their moral duty to contribute towards its betterment. Further a

healthy society will directly or indirectly lead to increased profit of the company through generation of

human resource and healthy market environment. According to the given scenario, the approval of charity

to the local community will be perceived as a good decision by the stakeholders as the charity given to the

society will contribute in the advancement of the community. It will also boost the morale of the

employees and will make them feel proud to be a part of company which is ethically and morally active.

The philanthropy done will build a good image of the company in the society and more positive response

will be achieved. In addition to this, company may get some tax deductions and favors from the

government and its profit may increase due to development of good reputation in the society. By

supporting the community from where the business is operating from, it may increase their future revenue

due to market creation. (market creation as a result of good reputation and advancement of the society).
From the outlook of things, the ethics of a donation to a charity in a local community would be

understood to be in line with the commitment that companies might have to develop and implement

courses of action that aid in social issues that affect society, by adhering to the ethics of Corporate Social

Responsibility (CSR) (Bowen, 1953).

Campbell (2007) adds to the literature by stating that CSR is a concept that allows companies to integrate

social and environmental concerns in their business operations and in their interaction with their

stakeholders often on a charitable base.

Conclusion

So, it is clear from the analysis that by following the triple bottom line reporting, in addition to profit,

attention is also paid to the well-being of people and the environment. The donation made serves as

evidence of this. The actual donation would need to be ethical and in line with the community's moral

standards.

References

Bowen, H., R. (1953). Social Responsibilities of the Businessman. Harper & Row: New York

Campbell, J. (2007). Why Would Corporations Behave in Socially Responsible Ways? An

Institutional Theory of Corporate Social Responsibility. Academy of Management Review. 32.946 – 967.

Freeman, R., E., Harrison, J., S. and Wicks, A., C. (2007). Managing for Stakeholders: Survival,

Reputation and Success. Yale University Press: New Haven.Stanwick, P., & Stanwick, S. (2016).

Understanding Business Ethics (3rd Ed.). Sage Publications: Thousand Oaks, CA.