Corporate Social Responsibility: What’s the Big Deal? One of the most contentiou
ID: 1107437 • Letter: C
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.
1.What do you think about this so called “Shareholder vs. Stakeholder” debate?
2. Do you have any personal experiences where you have observed the effects of this debate in terms of corporate actions?
3. On which side of the argument do you come down on and why?
Explanation / Answer
Corporate Social Responsibility often referred to as ‘CSR’ are the activities taken by a corporation to rectify the harm it has caused to the environment and social well being. The responsibility of a corporation goes beyond making profits and increasing the value of shares to its owners and shareholders. The ultimate stakeholder is the community. CSR activities can take several forms. It can take the form of building schools and/or hospitals, planting trees, providing nutrition to vulnerable groups, donating medicines and food to areas devastated by natural calamities, etc. Corporations also indulge in activities for their staff by providing extended maternity leave, flexible working hours to new moms, paternity leave and child care. In recent times, corporate social responsibilities have become popular and corporations are eager to participate in community activities.
Big corporations like Microsoft, Facebook take up community social responsibility in a big way.
I am of the view that corporations should take up community social responsibility.