The Ceo Of Bio Plastics Inc. Essay

1008 Words Aug 13th, 2016 5 Pages
The primary focus of a business is to generate profits as quoted by Friedman “the role of a business is to make profits” (Friedman, 1970, pg. 1). Every business strives to be the best and achieve global sustainability which Bio-Plastics Inc. (Kilkolly-Proffit, 2015) have achieved and are currently in the situation where changes in the business due to the market could result in consequences. In this essay, I will state the theories that influenced Marry-Anne’s, the CEO of Bio-Plastics Inc. (Kilkolly-Proffit, 2015), decisions regarding the future of her company and will explain the potential impacts of this decision, while also stating the position and feelings of Rajesh, a non-executive board member, and what will result from either one of these decisions.

When it comes to the purpose of a business there are two theories that leaders will promote, the shareholder and the stakeholder theories (Pfarrer, 2010). The stakeholder theory suggests that a business “can best generate competitive advantage and wealth by taking more than just their shareholders into account” (Pfarrer, 2010, pg. 89). This is the position of Rajesh as he believes that Bio-Plastics Inc. (Kilkolly-Proffit, 2015) has a responsibility to its owners and employees of the company as well as a responsibility to the island and people of Lanos and therefore the company should remain in Lanos. In contrast to this we have the second theory which is called shareholder theory. The shareholder theory states that the…

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