What is corporate social responsibility theory?

Corporate social responsibility as a specific theory affirms that corporations are entities with economic, legal, ethical, and philanthropic obligations. Corporations responsible for a triple bottom line seek sustainability in the economic, social, and environmental realms.

What is corporate citizenship theory?

Corporate citizenship refers to a company’s responsibilities toward society. The goal is to produce higher standards of living and quality of life for the communities that surround them and still maintain profitability for stakeholders.

What is shareholder theory?

Shareholder theory equates to an influential view on the role of business in society which pushes the idea that the only responsibility of managers is to serve in the best possible way the interests of shareholders, using the resources of the corporation to increase the wealth of the latter by seeking profits.

What is stakeholder theory of corporate social responsibility?

Stakeholder Theory is a view of capitalism that stresses the interconnected relationships between a business and its customers, suppliers, employees, investors, communities and others who have a stake in the organization. The theory argues that a firm should create value for all stakeholders, not just shareholders.

What is Carroll’s theory?

Carroll’s CSR pyramid is a framework that explains how and why organisations should take social responsibility. The pyramid was developed by Archie Carroll and highlights the four most important types of responsibility of organisations. Legal responsibility. Ethical responsibility. Philanthropic responsibility.

What are the three theories of corporate social responsibility?

Three of the main CSR theories and models have been represented and analyzed in this article: The Carroll Theory, The Triple Bottom Line Theory, and The Stakeholder Theories. Since any business corporation has to adopt one of these theories, this study reveals the strength and challenges of every theory.

What is Freeman’s perspective on the social responsibility of corporate executives?

“There is one and only one social 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.” [2]

What are the three CSR models?

Milton Friedman’s statement that management is to make as much money as possible within the limits of the law and ethical custom embraces three components of the CSR pyramid—economic, legal, and ethical.

What is the Friedman theory?

The Friedman doctrine, also called shareholder theory or stockholder theory, is a normative theory of business ethics advanced by economist Milton Friedman which holds that a firm’s sole responsibility is to its shareholders. As such, the goal of the firm is to maximize returns to shareholders.

What is Freeman’s stakeholder theory?

Edward Freeman’s stakeholder theory holds that a company’s stakeholders include just about anyone affected by the company and its workings. Stakeholder theory says that if it treats its employees badly, a company will eventually fail.

What is the stakeholder theory of corporate governance?

The stakeholder theory of corporate governance focuses on the effect of corporate activity on all stakeholders of the corporation, as opposed to focusing on the corporate effect on the shareholders. The theory also incorporates the interests of any third parties that have some level of dependence on the corporation.

What is Milton Friedman theory of corporate social responsibility?

Friedman introduced the theory in a 1970 essay for The New York Times titled “A Friedman Doctrine: The Social Responsibility of Business is to Increase Its Profits”. In it, he argued that a company has no social responsibility to the public or society; its only responsibility is to its shareholders.

What are the negative impacts of corporations on society?

Negative impacts may include doing damage to the environment, forcing the exit of smaller competitors, and offering poor customer service, to name a few. This section examines the concept of a corporation as a socially responsible entity conscious of the influences it has on society.

What are the two approaches to corporate social responsibility?

Two main approaches to CSR 2.2.1. Shareholder approach (Friedman) In 1970, on the New York Times Magazine, the Nobel prize–winning economist Milton Friedman resolutely stated that:

Should corporations claim credit for their social responsibilities?

Society, businesses, and governments have realized that all stakeholders have to work for the common good. When they are successful at acting in a socially responsible way, corporations will and should claim credit.

Is the social responsibility of business to increase its profits?

Milton Friedman’s controversial New York Times Magazine editorial, “The Social Responsibility of Business Is to Increase Its Profits” (1970), is an appropriate starting point for a discussion on the responsibilities of businesses towards society.