MGMT 3020 Chapter 5: (Chandler Textbook) - Chapter 5
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Strategic Corporate Social Responsibility (Chandler et al.) MGMT3020 - CHAPTER 5
CORPORATE STAKEHOLDER RESPONSIBILITY
• The main question is whether the burden of social responsibility lies squarely on the shoulders
of the corporation
Should corporations act responsibly because they are aligned with its moral argument? Or should they
act responsibly because it is in their self-interest?
• CSR optimizes value creation when the firm’s goals and society’s expectations are aligned
• Disregarding CSR completely may not breed immediate negative results if the results produced
in an unethical manner are invaluable to the community
If no pushback is received, should a corporation maintain its status quo or still improve standards to
be as ethical as possible?
• Problems arise when stakeholder interest are conflicted
o Investors could desire socially irresponsible behaviour to improve returns while
customers could desire socially responsible behaviour
Do customers reward firms who do good, or should firms change their behaviour in the hope they are
rewarded by customers?
• Customers seem to be willing to plead ignorance to ethical issues if it means their product is
• Governments also play a role in ensuring and ignoring socially responsible actions
o Their taxation of firms influences legislation affecting a firm’s profit-potential and
therefore affecting tax yields
CSR: A Corporate Responsibility?
• Firms often react to change more than they initiate it
• Stakeholders need to provide the economic rationale for firms to engage in CSR projects
MILTON FRIEDMAN VERSUS CHARLES HANDY
• Milton Friedman believes making profit is socially responsible unto itself
• Charles Handy believes profit is a means to achieve a larger end, something society values
• The idea of strategic CSR narrows the gap between these two views
CSR: A Stakeholder Responsibility?
• Should employees, regulators, customers, and so on – be obliged to shape the behaviour they
want from businesses through strikes, legislation, and their wallets?
• Pay is often attributed to skill and alternative jobs (ex. Fast food = minimum wage)
• Firms reflect our societal values, not define them
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