<p>A company makes decisions that have positive NPV. No list will ever be completely exhaustive since obligations are not necessarily zero-sum.</p>

<p>How do you increase profits for the shareholders? Mostly by taking care of the customers. How do you win customers? One way is to portray your company as environmentally friendly. This, in turn, helps the (wo)mankind and the nation. Do you see how it all pretty much ties together?</p>

<p>Of course, for a given company, one thing may be more important than the other.</p>

CC BY-SA 4.0
2019-05-09T14:00:19.360Z
It's not about NPVs, mainly. Furthermore, your analysis is not quite correct, as I suppose. Profits for the shareholders are not mostly increased by taking care of the customers - at least not by most of the companies (or am I wrong)? I assume it's more often than not that profits are increased by paying less  to employees and sub-contractors and suppliers - or by saving costs with respect to the environment. Of course, everything is related to everything, but not in a so simple and obvious way, and not always win-win-win.
Hans-Peter Stricker
CC BY-SA 4.0
2019-05-09T16:16:27.297Z
In both of our responses, subjectivity is involved. But if you study the evolution of marketing, companies are becoming more and more customer-centric. I think it is well accepted that firms nowadays are very focused on customers. That's why I think my response is justified. There is only so much cost cutting you can do at the end of the day. No question, life is not that easy and some decisions are zero-sum too.
Student
CC BY-SA 4.0
2019-05-09T16:53:17.383Z
The interesting question at the end of the day: How many decisions are win-win, how many are zero-sum - and who pays the bill? (One must not be satisfied with "sometimes it's this way, sometimes it's that way".)
Hans-Peter Stricker
CC BY-SA 4.0
2019-05-09T17:11:14.013Z
This question is too broad for that. You can't compare companies like that. The way Vanguard operates, for example, is tremendously different from how Facebook operates. I am afraid this the best you can get without specifying the company and/or the industry.
Student
CC BY-SA 4.0
2019-05-09T17:12:13.887Z
@Hans-PeterStricker Can you please accept the answer if it was helpful? It seems like it already started a good conversation. Thanks
Student
CC BY-SA 4.0
2019-05-09T10:07:43.473Z
2019-05-09T10:07:43.473Z
Student
<p>Any company may "feel" obligated towards several parties at once:</p>

<ul>
<li>its shareholders</li>
<li>its employees</li>
<li>its customers</li>
<li>its partner companies (sub-contractors and suppliers)</li>
<li>its country and social environment (if it is based in <em>one</em> country)</li>
<li>(wo)mankind in general (present and/or future)</li>
<li>environment in general (locally and/or globally)</li>
</ul>

<p>I wonder if this list is kind of complete - or if I've overseen important parties (what about the company itself as an economic subject?) - and more important: If there are schemes to display such obligations (<a href="https://www.wikiwand.com/en/Traffic_light_rating_system" rel="nofollow noreferrer">traffic light rating system</a> or <a href="https://www.wikiwand.com/en/Pie_chart" rel="nofollow noreferrer">pie charts</a> - depending on obligation being an <a href="https://www.wikiwand.com/en/Intensive_and_extensive_properties" rel="nofollow noreferrer">extensive or intensive property</a>) - and where I can find them realized.</p>

CC BY-SA 4.0
2019-05-08T13:50:46.057Z
Could it be that you are referring to stakeholders and social obligations? You can find many broad mappings of a company's stakeholders online. As for the scheme to display such obligations, could you be more specific on what you mean? How do you think of a pie chart reflecting the sense of obligation that a firm may have to its stakeholders or its social surroundings?
Ali
CC BY-SA 4.0
2019-05-08T15:27:20.447Z
@user20105:  To be honest: I think I forgot to list "stakeholders" and "social obligations" (but maybe "nation" and "mankind" covers "social obligations"). What might "stakeholders" be next to these?
Hans-Peter Stricker
CC BY-SA 4.0
2019-05-08T15:37:04.333Z
@user20105: If you measure obligation towards a specific party by a value between 0 and 1, two cases can be made: either obligations towards different parties are "incompatible" (because resulting actions exclude each other) - then the values must sum up to 1, and a pie chart is suitable. Or the company can fulfill obligations towards different parties simultaneously - then the values don't have to sum up to 1, and traffic lights are suitable and may all be "green" ( = 1).
Hans-Peter Stricker
CC BY-SA 4.0
2019-05-08T15:37:44.063Z
I meant more that the concepts that you are including here can be encompassed as stakeholders and social obligations in general, not that you forgot to mention these.
Ali
CC BY-SA 4.0
2019-05-08T15:47:08.877Z
As for your second comment, I see what you are asking now. Seems difficult to measure what many times boils down to ethical or moral implications and unfortunately, I have never seen this but someone more acquainted in business economics might be more of help here!
Ali
<microeconomics><reference-request><game-theory><utility><preferences>
Obligations of a company
Hans-Peter Stricker
# Obligations of a company

(Asked by: username_0 on 2019-05-08)

Any company may "feel" obligated towards several parties at once:

* its shareholders
* its employees
* its customers
* its partner companies (sub-contractors and suppliers)
* its country and social environment (if it is based in *one* country)
* (wo)mankind in general (present and/or future)
* environment in general (locally and/or globally)

I wonder if this list is kind of complete - or if I've overseen important parties (what about the company itself as an economic subject?) - and more important: If there are schemes to display such obligations ([traffic light rating system](https://www.wikiwand.com/en/Traffic_light_rating_system) or [pie charts](https://www.wikiwand.com/en/Pie_chart) - depending on obligation being an [extensive or intensive property](https://www.wikiwand.com/en/Intensive_and_extensive_properties)) - and where I can find them realized.

**Tags:** microeconomics, reference-request, game-theory, utility, preferences

> **Comments:**
> **username_1**: Could it be that you are referring to stakeholders and social obligations? You can find many broad mappings of a company's stakeholders online. As for the scheme to display such obligations, could you be more specific on what you mean? How do you think of a pie chart reflecting the sense of obligation that a firm may have to its stakeholders or its social surroundings?  
> **username_0**: @user20105:  To be honest: I think I forgot to list "stakeholders" and "social obligations" (but maybe "nation" and "mankind" covers "social obligations"). What might "stakeholders" be next to these?  
> **username_0**: @user20105: If you measure obligation towards a specific party by a value between 0 and 1, two cases can be made: either obligations towards different parties are "incompatible" (because resulting actions exclude each other) - then the values must sum up to 1, and a pie chart is suitable. Or the company can fulfill obligations towards different parties simultaneously - then the values don't have to sum up to 1, and traffic lights are suitable and may all be "green" ( = 1).  
> **username_1**: I meant more that the concepts that you are including here can be encompassed as stakeholders and social obligations in general, not that you forgot to mention these.  
> **username_1**: As for your second comment, I see what you are asking now. Seems difficult to measure what many times boils down to ethical or moral implications and unfortunately, I have never seen this but someone more acquainted in business economics might be more of help here!  

---

## 1 answers

### Answer by username_2 on 2019-05-09. Score: 0 | Accepted answer

A company makes decisions that have positive NPV. No list will ever be completely exhaustive since obligations are not necessarily zero-sum.

How do you increase profits for the shareholders? Mostly by taking care of the customers. How do you win customers? One way is to portray your company as environmentally friendly. This, in turn, helps the (wo)mankind and the nation. Do you see how it all pretty much ties together?

Of course, for a given company, one thing may be more important than the other.

> **Comments:**
> **username_0**: It's not about NPVs, mainly. Furthermore, your analysis is not quite correct, as I suppose. Profits for the shareholders are not mostly increased by taking care of the customers - at least not by most of the companies (or am I wrong)? I assume it's more often than not that profits are increased by paying less  to employees and sub-contractors and suppliers - or by saving costs with respect to the environment. Of course, everything is related to everything, but not in a so simple and obvious way, and not always win-win-win.  
> **username_2**: In both of our responses, subjectivity is involved. But if you study the evolution of marketing, companies are becoming more and more customer-centric. I think it is well accepted that firms nowadays are very focused on customers. That's why I think my response is justified. There is only so much cost cutting you can do at the end of the day. No question, life is not that easy and some decisions are zero-sum too.  
> **username_0**: The interesting question at the end of the day: How many decisions are win-win, how many are zero-sum - and who pays the bill? (One must not be satisfied with "sometimes it's this way, sometimes it's that way".)  
> **username_2**: This question is too broad for that. You can't compare companies like that. The way Vanguard operates, for example, is tremendously different from how Facebook operates. I am afraid this the best you can get without specifying the company and/or the industry.  
> **username_2**: @Hans-PeterStricker Can you please accept the answer if it was helpful? It seems like it already started a good conversation. Thanks  

---

