Most business organizations are built on the frameworks of shareholder supremacy, obligating them to put the interests of their shareholders or investors before any other organizational initiatives. Nonetheless, investors seek business opportunities for profits, meaning that achieving their interests translates to maximizing income. In the process, most organizations find themselves on the wrong side of the law because of their inability to respect corporate laws. For example, internationally established organizations like the Coca-Cola Company face aggravated challenges due to occasional regulatory issues and environmental degradation cases. Even so, it is crucial to note that these organizations engage in illegal activities due to negligence and ambitions to maximize their profits, regardless of their initiatives’ implications. However, it would be easier to avoid these issues if these organizations focused on their corporate social responsibility and adhered to the stipulations of due diligence standards.
An organization’s stakeholders, a term used to describe employees, suppliers, customers, managers, and staff members, and the physical environment play a critical role in attaining organizational goals and ensuring sustainability. Specifically, the environment plays a pivotal role because it allows these organizations to obtain raw materials for their manufacturing plants and set up vast industries. However, human capital is unparalleled since people run all processes in organizations. Therefore, disregarding human rights and environmental conservation policies can significantly harm an organization’s progress and expose it to liability issues. As a result, it is critical to developing policies that champion stakeholder supremacy as it will contribute to comprehensive improvements and a promising future for the organization and its investors. Thus, it is reasonable to ensure that stakeholders’ needs are met since maximizing their productivity and comfort is critical to an organization.