Chapter 3 strategic management

Chapter 3 strategic management - Social Responsibility...

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Social Responsibility purposes that a private corporation has responsibilities than extend beyond making a profit. Friedman’s Traditional View Of A Business Responsibility Primary goal of business is profit maximization not spending shareholder money for general social interest. Even if the businessperson has shareholder permission to do so, he/she is still acing from motives other than economic and may, in the long run, harm the very society the firm is trying to help. Carrolls’s Four Responsibilities Of Business : 1. Economic Responsibilities are to produce goods and services of value to society so that the firm may repay its creditors and shareholders. 2. Legal Responsibilities are defined by governments in laws that management is expected to obey. 3. Ethical Responsibilities are to follow the generally held beliefs about the behavior in a society. 4. Discretionary Responsibilities are the purely voluntary obligations a corporation assumes. Social Capital refers to the goodwill of key stakeholders, that can be used for competitive advantage. It provides a company with: The ability to enter local and international markets Enhanced reputation Competitive advantage Cost savings The ability to charge premium prices and gain brand loyalty Improved relationships with suppliers and distributors The ability to attract outstanding employees Goodwill in the eyes of public officials Attract Capital infusions from investors Characteristics Of Sustainability 1. Environmental Sustainability. This includes environmental reporting, eco-design and
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Chapter 3 strategic management - Social Responsibility...

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