Social Responsibility and Ethics in Strategic Management Chapter 3 Learning Objectives

Social Responsibility and Ethics in Strategic Management

Chapter 3

Learning Objectives

• Compare and contrast Friedman’s traditional view with Carroll’s contemporary view of social responsibility
• Understand the relationship between social responsibility and corporate performance
• Explain the concept of sustainability

Learning Objectives

• Conduct a stakeholder analysis
• Explain why people may act unethically
• Describe different views of ethics according to the utilitarian, individual rights and justice approaches

Social Responsibilities of Strategic Decision Makers

• Social Responsibility
• proposes that a private corporation has responsibilities to society that extend beyond making a profit

Friedman’s Traditional View of Business Responsibility

• Argues against the concept of social responsibility
• Primary goal of business is profit maximization not spending shareholder money for the general social interest

Carroll’s Four Responsibilities of Business

• Economic responsibilities
• produce goods and services of value to society so that the firm may repay its creditors and increase the wealth of its shareholders
• Legal responsibilities
• defined by governments in laws that management is expected to obey

Carroll’s Four Responsibilities of Business

• Ethical responsibilities
• follow the generally held beliefs about behavior in a society
• Discretionary responsibilities
• purely voluntary obligations a corporation assumes

Responsibilities of Business

Figure 3-1

Responsibilities of a Business Firm

• Social capital
• the goodwill of key stakeholders, that can be used for competitive advantage
• opens doors in local communities
• enhances reputation with consumers