Read through the accompanying material regarding alphass Cred. This document was written in 1949 and is still believed to be operationally relevant for the business by the current board of directors.

Alpha: Our Credo

The values that guide our decision-making are spelled out in Our Credo. Put simply, Our Credo challenges us to put the needs and well-being of the people we serve first.

Rob Alpha, former chairman from 1932 to 1949 and a member of the Companys founding family, crafted Our Credo himself in 1943, just before Alpha became a publicly traded company. This was long before anyone ever heard the term corporate social responsibility. Our Credo is more than just a moral compass. We believe its a recipe for business success. The fact that Alpha is one of only a handful of companies that have flourished through more than a century of change is proof of that.

Our Credo

We believe our first responsibility is to the patients, doctors, and nurses, and all others who use our products and services. In meeting their needs everything we do must be of high quality. We must constantly strive to provide value, reduce costs and maintain reasonable prices. Customers orders must be serviced promptly and accurately. Our business partners must have an opportunity to make a fair profit.

We are responsible to our employees who work with us throughout the world. We must provide an inclusive work environment where each person must be considered as an individual. We must respect their diversity and dignity and recognize their merit. They must have a sense of security, fulfilment and purpose in their jobs. Compensation must be fair and adequate and working conditions clean, orderly and safe. We must support the health and well-being of our employees and help them fulfil their family and other personal responsibilities. Employees must feel free to make suggestions and complaints. There must be equal opportunity for employment, development and advancement for those qualified. We must provide highly capable leaders and their actions must be just and ethical.

We are responsible to the communities in which we live and work and to the world community as well. We must help people be healthier by supporting better access and care in more places around the world. We must be good citizens support good works and charities, better health and education, and bear our fair share of taxes. We must maintain in good order the property we are privileged to use, protecting the environment and natural resources.

Our final responsibility is to our stockholders. Business must make a sound profit. We must experiment with new ideas. Research must be carried on, innovative programs developed, investments made for the future and mistakes paid for. New equipment must be purchased, new facilities provided, and new products launched. Reserves must be created to provide for adverse times. When we operate according to these principles, the stockholders should realize a fair return.

• a.

  • i.Identify three responsibilities or activities discussed in the Credo where alpha address their corporate social responsibility, and detail how they affect the financial management goal of profit maximisation. Also, detail which stakeholder group(s) is(are) impacted and how. (6 marks)
  • ii.Identify three responsibilities or activities discussed in the Credo where alpha address their corporate social responsibility and detail how they impact on the financial management goal of shareholder wealth maximisation. List which stakeholder group(s) is(are) affected and how, by the responsibility or activity identified, alongside the discussion of the impact. (6 marks)
  • iii.Based on your answers to points (i) and (ii) above, discuss how the financial goals of profit maximisation and shareholder wealth maximisation are aligned regarding the responsibilities and activities outlined in the Credo. Does the time horizon of the financial goals have an impact? Are there instances you believe there is alignment both positive and negative and any instances when the impact is contrary? (6 marks)

• b.When considering groups that a company has corporate social responsibility towards, a common list of stakeholders for a commercial organisation includes (listed alphabetically):
  • customers
  • employees
  • government
  • investors
  • local community
  • regulators
  • suppliers.

Imagine you are the finance director of a large UK Company. When considering the stakeholders listed, identify three groups that can attempt to influence your board of directors corporate social responsibility activities to align them with their own interests, and explain how they could achieve this.