CASE 1. THE NYSEG CORPORATE RESPONSIBILITY PROGRAM

NYSEG stands for New York State Electric and Gas Corporation, is an energy services company that supplies natural gas, electricity, and crisp energy solutions and serves residential, small business, and large commercial/industrial customers in New York State. Due to ever increasing energy costs in the 1970s, NYSEG’s long-term clients encountered hardships in paying their bills resulting to countless power shutoffs. This is how NYSEG Project Share came into existence. This is one of the corporate’s responsibility programs that aids the customers who are unable to pay their utility bills. This works by giving a direct financial aid to the clients who are unable to pay their bills. This fund is from the employees themselves, retirees, and customers. They give their charitable donations through their bill voluntarily. The money then goes to this special fund for their other customers to help them pay for their repairs to heating equipment, home weatherization, water heater replacements and for energy emergencies. Another corporate responsibility program of NYSEG is through their hired customer advocates, most of them are social workers who are dealing with clients who upon their thorough investigation unable to pay the utility bills. Once the credit department noticed that a certain client is having difficulty they would refer it to these advocates, or recommendations come from human service agencies and from their customers directly. This resulted again in some form of financial assistance but some cases are referred to other organizations. I believed that these corporate responsibilities of NYSEG are altruistic and good business. Altruism is defined as selfless endeavor to help less fortunate people in the society. It is crystal clear that NYSEG is doing altruism just to aid their clients to pay their debts to them, thus preventing power shutoffs. It performs both social responsible works and eventually earning profit. It helps in making a positive image for the company as well as aids the weaker members of the society. Lastly, it creates a sense of affinity and most importantly, loyalty among consumers, which leads to longer term profits. Although it has been said that this corporate responsibility program is not very good for corporate profits because of the net loss. Like the NYSEG, the shareholders in recent years have not enjoyed strong returns. Even though the costs exceed recovered revenue, this kind of service builds an outstanding client relations resulting to customer loyalty. Milton Friedman and R. Edward Freeman have opposing hypothesis to NYSEG’s corporate responsibility program. Friedman upholds his “stockholders” theory while Freeman sustained his “stakeholders” theory. Friedman only trusts that the only inherent worth that business must focus on is the stockholders. The company’s sole responsibility should make profits through treating the shareholders with utmost importance. He said that a contract exists between the executive and the shareholders and since that the executive is working for these investors. There is therefore a massive value at risk for the shareowner. On the contrary, Freeman advocates that firms must consider the employees, shareholders, communities, and customers with maximum respect and to treat them equally. His principle is that without them, the organization would cease to exist. If for an example a company maltreats their employees, they will not be motivated to work or worst quit from work, which will lead to the organization’s downfall. The above opposing views are critical for the company to take into consideration especially when deciding on how to deal with the various involved group of people. It is understood that every businesses want to gain high or strong profits and undeniably shareholders only wish is for profits to ensue. It is also right and fitting to consider that employees and clients play an essential role