Corporate Social Responsibility Corporate Social Responsibility Obligates organizations
Corporate Social Responsibility Ø Corporate Social Responsibility: Obligates organizations to act in ways that serve both its own interests and the interests of society at large. 1
Corporate Social Responsibility Ø Organizational Stakeholders: Persons, groups, and other organizations directly affected by the behavior of the organization. Ø Typical organizational stakeholders 2 – – – – Employees Customers Suppliers Owners Competitors Regulators Interest groups
Beliefs of a Socially Responsible Company 1. 2. 3. 4. 5. 3 People do their best with a balance of work and family life. Organizations perform best in healthy communities. Respect the natural environment for corporate gains. Strive for long-term success. Organizations must protect their reputations.
Perspectives on Social Responsibility Ø Classical View: Management’s only responsibility is to maximize profits. Ø Socioeconomic View: Management must be concerned for the broader social welfare, not just profits. 4
Arguments Regarding Social Responsibility Ø Against social responsibility: – – – 5 Reduced business profits Higher business costs Dilution of business purpose Too much social power for business Lack of public accountability Ø In favor of social responsibility: – – Adds long-run profits Improved public image Avoids more government regulation Businesses have resources and ethical obligation
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