While maximising returns to shareholders is a primary purpose of multi-national companies (MNCs), they also increasingly focus on social responsibility, sustainability, and stakeholder value.
I. Introduction
- Hook: Multi-national companies exist solely to enrich their shareholders. Why else would they be multi-national?
- Background: Overview of the traditional role of MNCs and evolving perspectives.
- Thesis Statement: Maximising shareholder returns is crucial for MNCs, but they also focus on social responsibility, sustainability, and stakeholder value.
II. Supporting View 1: Maximising Shareholder Returns
- Topic Sentence: Multi-national companies must aim to maximise returns to their shareholders.
- Example 1: Royal Dutch Shell’s dividend policies (2020-2021). Despite environmental concerns, Shell prioritised dividends to attract investors (source: Reuters, 2021). https://www.reuters.com/business/energy/shell-reward-investors-with-higher-dividends-2021-07-29/
- Example 2: Volkswagen’s profit-driven strategies (2019-2021). Emphasis on profit margins and shareholder value, even amid scandals (source: BBC, 2020). https://www.bbc.com/news/business-51399855
- Example 3: Nestlé’s share buyback programme (2019-2021). Buybacks aimed at boosting share prices and shareholder returns (source: Financial Times, 2021). https://www.ft.com/content/9e907dc4-936b-11ea-9abf-5bbf70363b85
- Analysis: MNCs often prioritise shareholder returns to maintain investor confidence and capital.
III. Supporting View 2: Financial Performance Focus
- Topic Sentence: Multi-national companies must show success through financial performance. It is a key indicator of success for MNCs.
- Example 1: HSBC’s cost-cutting measures (2019-2021). Bank focused on profitability through restructuring and cost reduction (source: The Guardian, 2020). https://www.theguardian.com/business/2020/feb/18/hsbc-to-axe-35000-jobs-as-it-scales-back-in-us-and-europe
- Example 2: Siemens’ spin-off strategy (2020-2021). Strategic spin-offs to enhance shareholder value and financial performance (source: Deutsche Welle, 2021). https://www.dw.com/en/siemens-energy-spin-off-completed/a-54992285
- Example 3: Samsung’s profit-driven product innovation (2019-2021). Investment in new technologies to boost market share and profits (source: The Korea Herald, 2021). http://www.koreaherald.com/view.php?ud=20210722000735
- Analysis: MNCs’ focus on financial performance ensures competitive advantage and shareholder satisfaction.
IV. Supporting View 3: Regulatory Compliance for Profit
- Topic Sentence: Multi-national companies must comply with regulations primarily to safeguard profits.
- Example 1: BP’s safety measures post-oil spill (2019-2021). Enhanced safety to prevent fines and protect shareholder interests (source: BBC, 2021). https://www.bbc.com/news/business-58431422
- Example 2: Facebook’s data privacy policies (2020-2021). Compliance with GDPR to avoid fines and protect profitability (source: The Irish Times, 2020). https://www.irishtimes.com/business/technology/facebook-faces-multi-billion-fine-under-gdpr-1.4321306
- Example 3: Rio Tinto’s adherence to environmental regulations (2019-2021) Compliance aimed at avoiding penalties and ensuring investor confidence (source: Financial Times, 2020). https://www.ft.com/content/3b8c3bb8-8a10-11ea-a01c-a28a3e3fbd33
- Analysis: Regulatory compliance is crucial for MNCs to maintain profitability and shareholder trust.
V. Opposing View 1: Corporate Social Responsibility (CSR)
- Topic Sentence: MNCs increasingly focus on CSR alongside profit maximisation.
- Example 1: Unilever’s sustainability initiatives (2019-2021). Programmes to reduce environmental impact and improve social welfare (source: The Guardian, 2021). https://www.theguardian.com/business/2021/apr/22/unilever-sustainability-climate-change
- Example 2: IKEA’s renewable energy investments (2020-2021). Investments in renewable energy to support environmental goals (source: Business Insider, 2020). https://www.businessinsider.com/ikea-renewable-energy-2020-10
- Example 3: Danone’s social projects in Asia (2019-2021). Initiatives to improve community health and nutrition (source: Food Navigator Asia, 2021). https://www.foodnavigator-asia.com/Article/2021/02/15/Danone-Asia-strategy-Health-planet-and-inclusivity-pushes-amid-profit
- Analysis: CSR initiatives demonstrate MNCs’ commitment to social and environmental responsibilities.
VI. Opposing View 2: Stakeholder Value Focus
- Topic Sentence: MNCs are increasingly prioritising stakeholder value over pure shareholder returns.
- Example 1: Tata Group’s community initiatives in India (2020-2021). Focus on community welfare and inclusive growth (source: The Economic Times, 2021). https://economictimes.indiatimes.com/news/company/corporate-trends/tata-groups-community-initiatives-help-empower-marginalised-sections/articleshow/84076345.cms
- Example 2: Novo Nordisk’s patient-centric approach (2019-2021). Emphasis on patient welfare and affordable treatments (source: PharmaTimes, 2020). http://www.pharmatimes.com/news/novo_nordisk_announces_patient-centric_initiatives_1343876
- Example 3: Natura & Co’s environmental conservation efforts (2019-2021). Focus on preserving biodiversity and supporting local communities (source: GreenBiz, 2021). https://www.greenbiz.com/article/natura-co-leading-sustainability-and-social-impact
- Analysis: Prioritising stakeholder value aligns with long-term sustainability and broader societal benefits.
VII. Opposing View 3: Ethical Business Practices
- Topic Sentence: Ethical business practices are becoming a core focus for MNCs.
- Example 1: Patagonia’s environmental activism (2019-2021). Strong stance on environmental issues and ethical sourcing (source: The Independent, 2020). https://www.independent.co.uk/news/business/news/patagonia-donations-environment-trump-tax-savings-b1786644.html
- Example 2: Siemens’ integrity initiatives (2020-2021). Emphasis on ethical practices and anti-corruption measures (source: Deutsche Welle, 2020). https://www.dw.com/en/siemens-integrity-initiatives/a-53050301
- Example 3: Lego’s commitment to sustainability (2019-2021). Investment in sustainable materials and ethical supply chains (source: EcoWatch, 2021). https://www.ecowatch.com/lego-sustainable-blocks-2647894606.html
- Analysis: Ethical practices foster trust and align with modern consumer values.
VIII. Conclusion
- Restate Thesis: Maximising shareholder returns is crucial for MNCs, but they also focus on social responsibility, sustainability, and stakeholder value.
- Summary of Key Points: Shareholder returns, financial performance, regulatory compliance versus CSR, stakeholder value, ethical practices.
- Final Thought: Balancing profit with ethical and social responsibilities is essential for sustainable success in the modern business environment.