FAQ: What Is The Stakeholder View Of Corporate Responsibility?

The stakeholder approach indicates that a business is not only responsible to its owners but also has obligations to various stakeholders, such as employees, customers, business partners, government and non-governmental organizations [8, 17]. The social approach is a broader view on CSR.

What is the stakeholder view of the corporation?

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 responsibilities do corporations have to their stakeholders?

Stakeholders are individuals or groups to whom business has a responsibility. Firms must help protect the environment and provide a good place to work. Companies also engage in corporate philanthropy, which includes contributing cash, donating goods and services, and supporting volunteer efforts of employees.

What are the views of corporate social responsibility?

Corporate social responsibility is traditionally broken into four categories: environmental, philanthropic, ethical, and economic responsibility.

• Environmental Responsibility.
• Ethical Responsibility.
• Philanthropic Responsibility.
• Economic Responsibility.

What is the purpose of a corporation according to the stakeholder view?

Friedman’s view is that companies are compelled to make a profit, to satisfy their shareholders, and to continue positive growth.

What is Freeman’s 1984 definition of stakeholder?

The term stakeholder first “appeared in the management literature in an internal memorandum at the Stanford Research Institute, in 1963” (Freeman, 1984, p. 31). The word means “ any group or individual who can affect or is affected by the achievement of the organization’s objectives ” (Freeman, 1984, p. 46).

What is the stakeholder model of corporate social responsibility?

Stakeholder theory posits that the essence of business primarily lies in building relationships and creating value for all its stakeholders. Instead, CSR focuses on one stream of business responsibilities – responsibility to local communities and society at large – to ensure business does deliver on it.

What is the relationship between corporations and stakeholders and what is the corporations role in that relationship?

In the most basic sense, the relationship between a corporation and its shareholders is for each to profit from the activities of the other. This mutually beneficial relationship is essential to the modern market economy, and creates enormous wealth for those who have the means to participate in it.

What are the responsibilities of business in their corporate decisions?

Social Responsibility of Business and Social Contract:

• Responsibility to Shareholders:
• Responsibility to Employees:
• Responsibility to Consumers:
• Obligation towards the Environment:
• Responsibility to Society in General:

In what ways are the stakeholders responsible to the community explain company social responsibility?

It is the social responsibility of the stakeholder to ensure that the employees of the company work under the best possible conditions. A company could potentially increase its profits by working employees harder for less pay, but the effects on the employees would be negative.

What are the 2 views of corporate social responsibility CSR?

Two opposing perspectives to CSR have emerged resulting from different interpretations of the role of corporations in society— business view and societal view.

What is the classical view of CSR?

In reference to Friedman’s classical view, the purposes for business to exist are for distributing products and services to society, and thereafter, for creating economic value which subsequently generate profits for shareholders.

What are the two views of social responsibility?

Two contrasting philosophies, or models, define the range of management attitudes toward social responsibility; the economic and the socioeconomic model.

What is the main purpose of a corporation shareholder or stakeholder value?

The purpose of a company is first and foremost to maximize shareholder value, within what is is legally permissible. Advocates of the shareholder value perspective are convinced that society is best served by economic rationale.

Why is the stakeholder approach important?

The analysis finds that the stakeholder approach is a legitimate management strategy and helps companies building trust and maintaining a sustainable competitive advantage, even giving better financial return in the long term.

Why do stakeholders matter to corporations?

Specifically, stakeholder engagement can help: Empower people – Get stakeholders involved in the decision-making process. Build a better organization – Engaging with stakeholders can bring important issues to light and encourage your organization to develop corporate social responsibility.