31 March 2008

Yankee Stadium and CSR

The reading topic for Week Four of Business Ethics was Corporate Social Responsibility. While the traditional view of a corporation's purpose is to benefit its stockholders by maximizing profits, there is a competing view that says a corporation exists to serve all stakeholders. Stakeholders generically include six groups: "stockholders, employees, customers, managers, suppliers, and the local community" and the goal of management from this view is "harmonizing the legitimate interests of the primary corporate stakeholders" (Ethical Theory and Business, 48).

For me, the decision to build a new Yankee Stadium personifies Corporate Social Responsibility from the Stakeholder Model. Firstly, the New York Yankees are the New York Yankees. The most historic team in Major League Baseball has won 26 World Series' Titles and 39 American League Pennants in just 82 years. That kind of domination has created Yankees fans far and wide, and a huge market for New York Yankees paraphernalia. Simply continuing the Yankees brand seems sufficient to addressing the maximization of profits for stockholders that Milton Friedmann was so pre-occupied with. Without doing serious research, I am quite sure that there are SOME stockholders invested in Yankees Baseball other than the Steinbrenner family (who own an overwhelming majority share).

The point of the previous paragraph is that to be financially "good" to the organization's stockholder stakeholders, a new Stadium does not need to be built. Fans would still come to every home game and fill the seats at old Yankee Stadium in the Bronx. The new stadium is for the other stakeholders. New Yankee Stadium will create more comfortable workspaces and make available more modern resources for employees. It will give the local community an "upgraded" tourist attraction with additional bells and whistles for the customers' benefit (and spending privilege). New Yankee Stadium will give the the team's players and opponents state-of-the-art locker rooms. That's not to say that stockholders won't benefit as well. An increase in luxury boxes will sky-rocket revenues. The long-term asset of a new Yankee Stadium ensures that the business will survive--for perhaps another 82 years of baseball.

Perhaps then, against my initial judgement, the decision to build a new stadium in the Bronx is more of a mixed CSR model. When "a shift is made to consider long-term profitability, then there is a greater likelihood that in terms of managerial behavior, the stockholder theory and the stakeholder theory will coincide" (50). Additionally, we as baseball fans and stakeholders may have our own obligation to allow the New York Yankees to build this new stadium in the interest of its own perpetuation, regardless of whatever resentment we hold based on our unending love for "The House that Ruth Built."


Gil Burgess said...

Yup. I think that there will be a positive effect on all of the stakeholders. --- Although, of those groups mentioned as members of that "stakeholder" category, who are the "customers"?

Seth C. Burgess said...

You and I.

The fans!!!

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