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1.Definecorporate social responsibilityand explain how organizations areresponsible to their stakeholders.12. Approach that an organizationtakes in balancing itsresponsibilities towarddifferent stakeholders whenmaking legal, economic,ethical, and social decisions.Chapter 2 Business Ethics and Social Responsibility85
Figure 2.6The Corporate CitizenLet’s look at some of the ways in which companies can be “socially responsible” inconsidering the claims of various stakeholders.OwnersOwners invest money in companies. In return, the people who run a company havea responsibility to increase the value of owners’ investments through profitableoperations. Managers also have a responsibility to provide owners (as well as otherstakeholders having financial interests, such as creditors and suppliers) withaccurate, reliable information about the performance of the business. Clearly, this isone of the areas in which WorldCom managers fell down on the job. Upper-levelmanagement purposely deceived shareholders by presenting them with fraudulentfinancial statements.