Corporate Social Responsibility: What’s the Big Deal? One of the most contentiou

Question

Corporate Social Responsibility: What’s the Big Deal? One of the most contentious debates among scholars has centered on the proper role for a corporation in the pursuit of its business. In large measure the debate has crystallized around two points of view. On the one hand, some believe that a corporation’s chief responsibility role is to make and maximize profit. This belief has often been referred to as the Friedman Approach in homage to the economist, Milton Friedman. Friedman espoused the view that as long as a corporation stayed within the rules, its only responsibility was to return the maximum profit to its shareholders. On the other hand, other scholars have asserted that the social responsibility for a corporation extends beyond just making a profit and includes a responsibility to act in a manner that promotes and supports the welfare of society at large. What do you think about this so called “Shareholder vs. Stakeholder” debate? Do you have any personal experiences where you have observed the effects of this debate in terms of corporate actions? On which side of the argument do you come down on and why? Include reference.

Explanation / Answer

When we want an organisation to be socially responsible, the main aim for any organisation is to succeed in the business it does and only then it can keep both shareholders and stakeholders happy. When it comes to shareholders vs stakeholders, it will always be shareholders because they invest in the company and ensuring that they do not go into loss is very important for any organisation.

An organisation must first concentrate on it's profits and it is it's main ibjective until it crosses any rules. Hence The main goal of any organisation must be maximising profits along with some social responsibility on it's part.

We many times experience our management trying to implement something new in the organisation and stakeholders opposing that it will cause trouble to the people outside like conducting some marathon and stakeholders feeling that we might obstruct traffic. These problems where profits vs social responsibility always crops up and any organisation needs to balance both .

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