Ethical Outcomes of Treatment of Stakeholders in Mondragon Cooperative Corporation (MCC) and a Traditional Capitalist Corporation (Microsoft Corporation)

Adhering to corporate social responsibility in an increasingly competitive business environment has become challenging for modern entities. For instance, the requirement for the business to provide a specific minimal level of returns to shareholders even during harsh economic environments could lead to an entity’s engaging in imprudent practices (Heineman 2007). In this respect, the organization tries to make a trade-off between the value delivered to the customer and that delivered to the shareholder. Alternatively, businesses facing adverse economic conditions are likely to result into employee cuts to sustain their profits thus leading to high levels of unemployment in society. Such a concern of Capitalism of maximizing profits even at the expense of the social good has increasingly been challenged in the recent times. Although some propositions deem that capitalism tempered with conscious social initiatives results into a net positive impact on society in the long term (Strong 2011), opposing propositions have considered it unlikely for capitalistic entities to sustain such a social concern in the long term (O’Toole & Vogel 2011). Such concerns with capitalistic entities have led to evaluation of other models of businesses (e.g. cooperative businesses), which could offer alternatives for a better social organization. This paper compares one such cooperative entity, Mondragon Cooperative Corporation (MCC), with a capitalistic entity, Microsoft Corporation, to identify the ethical outcomes that arise from how each entity treats various stakeholders.

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