...Freidman perspectives surrounding corporate social responsibility by summarizing their respective articles titled: “Stakeholder Theory and The Corporate Objective Revisited” and “The Social Responsibility of Business is to Increase its Profits”. By examining their articles, I will provide a personal opinion of which of their economic models should be the leading model when it comes to business and corporate social responsibility. Summary of Articles Author R. Edward Freeman’s article “Stakeholder Theory and The Corporate Objective Revisited,” emphasized a response to a piece put out by Sundaram and Inkpen titled “The Corporate Objective Revisited” by clarifying misconceptions about stakeholder theory and concluding that truth and freedom are best served by seeing business and ethics as connected (Freeman, Wicks, & Parmar, 2004). Freeman supports the above statement by providing the following three main critiques: 1) the mischaracterization of stakeholder theory; 2) the primacy of creating value for stakeholders, and; 3) the real issues of economic and political freedom (Freeman, Wicks, & Parmar, 2004). In response to social responsibility, Freeman clarifies that stakeholder theory claims that no matter what the ultimate mission of the corporations or any form of business activity, managers and owners must take into account the legitimate interest of those groups and individuals that can affect their activities (Freeman, Wicks, & Parmar, 2004). The importance of creating value...
Words: 984 - Pages: 4
...society? Introduction The dominant model of business activity in the past merely concentrated on the benefit of the shareholders, which is maximizing profit from the firms’ activities. Any other benefits or harms created in the process of the activity were considered secondary. Issues such as ethics and creating values for customers and stakeholders were thus ignored and rarely paid attention to. Unfortunately with the business world ever-changing, the culture that was embedded in the past is no longer workable in this 21st century as it was resistant to changes, inconsistent with the laws and ignores the ethical side (Freeman 2008). The issue of Corporate Social Responsibility or CSR has been the subject of debate among researchers for the past twenty years (Chen & Winai, 2011). There have been many arguments if businesses should engage CSR initiatives in their operations. CSR or corporate citizenship is defined as the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large (Moir 2001). The essay will discuss on the literature review of the different perspectives of CSR, arguments against it and the analysis if CSR represent corporations’ genuine desire to contribute towards the society. Literature Review Arguments for CSR There are three reasons why corporate engage in CSR activities. They are pragmatic reason...
Words: 2985 - Pages: 12
...Corporate has infused sustainability into its core strategy. The extant of initiatives to engage employees in Corporate Social Responsibility (CSR) and Sustainability issues reflects the value driven leadership and the benefits derived thereof from these engagements. Social linkages, community development projects and strategic CSR leading to inclusive growth have become the trend. This stresses the need of our future managers to be equally sensitive to the sustainability issues. The paper explores status and initiatives taken by select premier institutes to engage students in the area of sustainable development/Responsible business practices. It attempts to analyze pedagogies used by them to sensitize students to take up responsible business practices. Design/Methodology: The websites of select premiere Business schools is studied to collect information and analyze the thrust given to sustainability issues and the efforts taken to enhance sensibility amongst students. The parameters were focus area/centers of excellence/course module/part of curriculum/part of extra-curricular activity/objectives. Research Implication: Though a lot of activities are undertaken by business schools under CSR and contribution to social development, incorporating it as part of credit course and sensitizing business school students to sustainability is taken up by a select few institutions only. The Business schools will have to give greater impetus to sustainability issues and infuse sustainability...
Words: 275 - Pages: 2
...In bound logistics Sony engages in a series of complex In bound logistics activities that the company either possess or provided by third parties. As the company expands, Sony also gain to engage third parties such as Flextronics and Solectron to manufacture some of its product components so that the company will continue to possess sufficient wave length to engage in its core businesses and core competencies. To lower its cost of production Sony also restructured and shut down some manufacturing facilities. In fact, the company has shifted some of its production plants to low cost counties such a china take advantage on the cheaper labor cost. The ability to manage the complex and geographically dispersed in bound logistics activities is certainly Sony’s strength....
Words: 852 - Pages: 4
...Name: Institution: Course: Tutor: Date: Commercial Benefits of Corporate Social Responsibility Chapter 1: introduction Following the increase in the discoveries of corporate scandals in emerging and developed countries, there has been a rapid growth of concern in ethical and socially responsible business behaviour over the past two decades. The World Business Council for Sustainable Development has taken many initiatives to advance public’s concern about energy, climate, environment, sustainability, and corporate responsibility (Marrewijk, 2003). It defines CSR as “the commitment of business to contribute to sustainable economic development, working with employees, their families and the local communities”. As highlighted by Jamaliand Mirshak (2007), the fundamental idea of CSR is that business organizations would have an obligation to fulfil the needs of various organizational stakeholders (Waddock, Bodwell, & Graves, 2002) Corporate social responsibility (CSR) practices or initiatives have been performed by many corporations, particularly as a large number of researchers have demonstrated the benefits of being socially responsible (Berens, van Riel, & van Bruggen, 2005; Luo & Bhattacharya, 2006; Nan & Heo, 2007; Vaaland, Heide, & Gronhaug, 2008). In general, previous studies in Western developed societies have shown a positive relationship between CSR associations and corporate product evaluation. In order to really understand CSR we must root it...
Words: 9432 - Pages: 38
...Milton Friedman in his article “The Social Responsibility of Business is to Increase its Profits” states that only people can have responsibilities, and that there is not such a thing like social responsibility of business. A corporation, according to Friedman, is an artificial person and, therefore, may have artificial responsibilities. The individuals who are responsible of the corporation are businessmen, which are individual proprietors or corporate executives. A corporate executive is employed by the owners of the business. And its responsibility is to conduct the business in a way that maximizes the profits while conforming to the basic rules of the society. A corporate executive, as any other person, may have many other responsibilities that he recognizes or assumes voluntarily, which can be referred as “social responsibilities.” These social responsibilities correspond to individuals, not to businesses. The main objective of corporate executives is to maximize the profits of all stockholders; therefore, they are to act in a way that is in the interest of those owners of the business. In this sense, a corporate executive shall not engage in social activities, unless they are done from an individualistic point of view instead of from a business point of view because, in the last case, he or she would be spending somebody else’s money, and not serving the interests of the employers. On the other hand, the situation of the individual proprietor differs because, if he reduces...
Words: 1387 - Pages: 6
...Social Responsibility of Business Introduction What is the social responsibility of a business? Is it to increase its profits as Milton Friedman affirms? Before starting any debate about this topic, first let’s see what its definition is. According to the Business Dictionary, social responsibility is an “obligation of an organization's management towards the welfare and interests of the society which provides it the environment and resources to survive and flourish, and which is affected by the organizations actions and policies. 1 ” Furthermore, according to the Dictionary of Finance and Investment Terms, social responsibility is the “principle that businesses should actively contribute to the welfare of society and not only maximize profits. 2 ”These two definitions are in total opposition to Friedman’s statement. Never the less, I do think that any corporation can be social responsible in terms of these opposing points of view at the same time. In this essay, I will first present a summary of the article of Milton Friedman; then I will express my personal reflection on the topic and tell why a corporation can comply with both positions simultaneously Milton Friedman in his article “The Social Responsibility of Business is to Increase its Profits” states that only people can have responsibilities, and that there is not such a thing like social responsibility of business. A corporation, according to Friedman, is an artificial person and, therefore, may have artificial...
Words: 1574 - Pages: 7
...CORPORATE RESPONSIBILITY TO STAKEHOLDERS MAXIMIZE FIRM’S VALUE? DOES CORPORATE RESPONSIBILITY TO STAKEHOLDERS MAXIMIZE FIRM’S VALUE? Topic: This paper seeks to explore the economic mechanisms behind corporate responsibility based on a microeconomic perspective of the firm. The ultimate objective is to ruminate on the effects of corporate responsibility of firms to stakeholders. That is how corporate responsibility to stakeholders can help maximize or minimize the firm’s value. In this research paper, I am going to explain the principle of stakeholder and the corporate social Responsibility that corporation owes to its stakeholders. The fact that corporations are entitled to its stakeholders and the environment within its scope of business has been a controversial issue. At the beginning, I will give a clear understanding of what Corporate Responsibility by firms to its stakeholders is. Later, I will make an argument in favor and against Corporate Responsibility by the firm to its stakeholders. Lastly, I will come to a conclusion on how firm’s value is maximized. That is what corporation should do for its stakeholder. According to rigorous research, each person has his or her personal responsibility that needs to be performed in order to maintain a good image in the society. Just as humans are faced with responsibilities, so as Corporations, since they are seen as a group of individuals working together to accomplish a goal, that goal being making themselves and shareholders...
Words: 1817 - Pages: 8
...The concept of social responsibility of business organizations. It is common knowledge, that behavior of an organization has important economic, social and political consequences. In today’s capitalist society, any business organization has primary responsibility for organizing the economy of the country. The USA is a country that has formed a solid capitalistic society over the centuries and gaining profit is the main goal of most of the organizations. Every businessman is eager to get a profit from what he does and any volunteer activities are very often viewed as a good means of marketing. Time is money, this is the main credo of American society. These facts will help us analyze the definition of social responsibility of organizations in today’s society. Social responsibility can be described in different ways. Most of the business organizations perform only social obligations, which means that a firm engages in social actions because of its obligation to meet certain economic and legal responsibilities. Basically, the organization does what it’s obliged to do and nothing more. This is a classic view of social responsibility. The most outspoken advocate of this approach is Milton Friedman, a great economist and Nobel laureate. He believes that the primary responsibility of an organization is to operate in the best interests of stockholders, whose primary concern is financial. The other two concepts- social responsiveness and social responsibility reflect the socioeconomic...
Words: 424 - Pages: 2
...of their stores have started offering a very limited amount of health-conscience and organic products—all of which were high margin items. When asked by the area’s food bank for donation of day-old products, management declined deciding instead to throw the food away, citing worries over lost revenues due to possible fraud and stealing by employees who might say they are donating the food.” Evaluation of Company Q: Businesses are in business to make a profit. Businesses that are in business to make a profit with a total disregard for all else, is capitalism at its worst. A company who habitually relies on or exploits others and gives nothing in return, is a parasitic company. In order for companies to positively co-exist with their stakeholders, they must work to minimize the negative impact their business has on them. It was not against any business law, for Company Q, to close two stores that were located in higher crime-rate areas of the city that were consistently losing money. Some would profess this was a more responsible decision than allowing the entire company to go bankrupt. I would argue that complete disconnects with their primary and secondary stakeholders to include; their customers, employees, and members of the community, indicates they are morally, ethically and socially bankrupt. A disconnect with your employees, customers and the...
Words: 1316 - Pages: 6
...responsibility of business—to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud” (Wheelen & Hunger, 2010, p. 72). With social media and the internet, it is difficult for companies only to focus on profits. Today, companies need to follow Archie Carroll four responsibilities of business. Those responsibilities include economic, legal, ethical, and discretionary. The priority starts with economic and ends with discretionary. According to Carroll, “a business firm must first make a profit to satisfy its economic responsibilities” (Wheelen & Hunger, 2010, p. 73). Once the company’s economic responsibilities have been met they can worry about the social responsibilities—ethical and discretionary. When a company decides to take responsibility for their actions by doing the right thing, this is called business ethics. In business a company or business has a social responsibility to the consumers and stock holders to make sure they are practicing proper business ethics to not only promote doing the right thing but to show that they are doing the right thing at all times. The pressure of social responsibility is even more important today than in the past because of big business like Enron not being socially responsible or having any business ethics at all. This is why more than ever that it is important for a business to practice...
Words: 707 - Pages: 3
...Use of Social Media to Improve Company Marketing Business Research Report September 2, 2014 Presented by Partner Research Findings - Facebook • Facebook is the largest consumer social media site in the world with in excess of 1.317 billion active monthly users (2014, Smith) • Over 1 million websites have integrated with Facebook. 80% of users prefer to connect with brands on Facebook (2013, Cooper) • The percentage of marketing professionals who are advertising on Facebook is 92% (Tactics, 2014) Recommendations - Facebook • It is recommended that the company creates and maintains a corporate Facebook site to engage, nurture and monitor B2C relationships • Site creation and post-live launch content to be executed by the marketing department, with the help of outside specialist if needed • At 50% site completion and prior to live site launch the Facebook site will need management review and approval • Also recommended is a designated employee solely responsible to manage all social media channels recommended herein Justification - Facebook • Facebook is the largest social media platform where content is disseminated directly to the public on a very targeted basis • The public is interconnecting with each other at an increasing rate via social networks. Facebook is the opportunity to engage mas consumers • Consumers like to do business with people they trust. By engaging consumers the company can build a loyal fan base (Stelzner, 2014) • Facebook is the second largest...
Words: 669 - Pages: 3
...1.0 Introduction For ages the primary “responsibility” of business has only been finding ways to increase money which in turn would increase shareholder value. To put it differently, Corporate Financial Responsibility has been the driving force of most business, if not all. However, in the recent decade the driving force was redefined as Corporate Social Responsibility, which covers all social, financial and environmental responsibilities. 1.1 Corporate Social Responsibility Sir Geoffrey Chandler defines corporate social responsibility (CSR) as conducting transparent business practices that are based on ethical values, compliance with legal requirement, and respect for people, communities, and the environment. According to the Social Responsibility of the Businessman, CSR is defined as “the obligations of business to pursue those policies, to make those decisions or to follow those lines of action which are desirable in terms of the objectives and values of our society” (Bowen, 1953). 2.0 The potential of CSR in creating sustainable development The previous driving force had a great potential of exploiting the sustainability of this world at large. This is solely because when a company’s only purpose is to maximize profit at any economic, environmental or social cost. According to the Brundtland report sustainable development is interpreted as the development that meets the needs of the present without compromising the ability of future generations to meet their own needs...
Words: 2563 - Pages: 11
...Introduction An entrepreneur is defined as “person who seeks a profitable opportunity and takes the necessary risks to set up and operate a business” (Boone & Kurtz, 2011). There are several different types of entrepreneurs however profit oriented and socially responsible entrepreneurs will be analyzed. Oprah Winfrey, a profit oriented entrepreneur, in my opinion has transformed the culture with her media empire to become one the world’s most wealthy individuals to date. At the other end of the spectrum, Shazi Visram is a socially responsible entrepreneur that has transcended to the forefront of organic premium baby food. Both of these entrepreneurs have taken risks in order to reach and engage their audiences through their selective approaches to business. Profit Oriented Entrepreneur Oprah Winfrey is an entrepreneur, visionary, pioneer, television producer and philanthropist. She is the founder and CEO of Harpo Productions, Inc., which is a media outlet for her daytime talk show, movies, radio station, magazine and website. Her nationally acclaimed company provides a source of entertainment for millions of viewers in several different countries. “Oprah was the richest African American of the 20th century and the world’s only Black billionaire for three years running (Oprah Winfrey, 2011).” Oprah’s leadership is relayed through her charismatic personality, her commitment to education, her visionary ability to inspire, influence and persuade culture through her various media...
Words: 1491 - Pages: 6
...Royal Dutch Shell INTRODUCTION Shell is a global group of energy and petrochemicals companies. According to the manager, “With around 101,000 employees in more than 140 countries and territories, Shell helps to meet the world's growing demand for energy in economically, environmentally and socially responsible ways”. The Shell brand is one of the most familiar commercial symbols in the world. Royal Dutch Shell is the world's largest private sector oil company by revenue, Europe's largest energy group and a major player in the petrochemical industry. One of North America's leading producers of oil, gas, and petrochemicals, Shell Oil Company has distinguished itself through its commitment to industry innovation. Its marketing expertise has enabled the company to compensate for its relatively low volume of crude oil production, as compared to its strongest competitors, by selling an equivalent amount of gasoline nationwide. MISSION 1. It is the duty of management continuously to assess the priorities and discharge these inseparable responsibilities on the basis of that assessment. To shareholders 2. To protect shareholders' investment, and provide a long-term return competitive with those of other leading companies in the industry. To customers 3. To win and maintain customers by developing and providing products and services which offer value in terms of price, quality, safety and environmental impact, which are supported by the requisite technological, environmental...
Words: 1197 - Pages: 5
