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Select the statements below which correctly describe the relationship between a company and the community within which it operates. (Select all that apply.) \( \square \) A. A good community relationship is embedded in the goal of maximizing current share price or the equity value of the company. \( \square \) B. If the firm pollutes local streams or destroys the quality of life through noise pollution or other types of pollution, the local community may sue the company for its damages and the best local workforce members may choose not to work for the company. \( \square \) C. Maintaining a good working relationship with the surrounding community is a good business practice. \( \square \) D. If a company fails to maintain a good relationship with the community, employees may not be loyal to the company causing high turnover and increased dersonnel costs for recruitina and trainina.

Ask by Santiago Patel. in the United States
Jan 22,2025

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Answer

The correct statements are B, C, and D.

Solution

The correct statements that describe the relationship between a company and the community within which it operates are **B, C, and D**. - **B.** If the firm pollutes local streams or destroys the quality of life through noise pollution or other types of pollution, the local community may sue the company for its damages and the best local workforce members may choose not to work for the company. *This is correct because environmental harm can lead to legal actions and make the company less attractive to potential employees.* - **C.** Maintaining a good working relationship with the surrounding community is a good business practice. *This is correct as positive community relations can enhance a company's reputation, customer loyalty, and operational stability.* - **D.** If a company fails to maintain a good relationship with the community, employees may not be loyal to the company causing high turnover and increased personnel costs for recruiting and training. *This is correct because poor community relations can negatively impact employee morale and retention.* - **A.** A good community relationship is embedded in the goal of maximizing current share price or the equity value of the company. *This statement is **not necessarily correct**. While long-term shareholder value can be aligned with positive community relations, the phrase "maximizing current share price" often implies a short-term focus that may not inherently prioritize community relationships.* **Final Answer:** All except statement A are correct. Statements B, C, and D appropriately describe the company-community relationship.

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The Deep Dive

Maintaining a positive relationship with the community isn't just a good idea; it can be a critical component of a company's long-term success! Good community relations can lead to enhanced brand loyalty, a better reputation, and ultimately, attraction of customers and talent alike. Companies that actively engage with and support their communities often find themselves in a win-win situation. On the flip side, ignoring the local community can have significant repercussions. Businesses may face legal actions or community backlash if they engage in harmful practices like pollution. Furthermore, employees who feel disconnected from a negative community image might look elsewhere for job satisfaction, leading to increased turnover rates and costs associated with finding and training new hires.

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