MGT 125 Chapter 4: MGT 125 - Chapter 4
27 Oct 2020
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Contrast the classical and socioeconomic views, and evaluate to whom managers could be responsible. Classical view: management"s only social responsibility is to maximise pro ts. Minton friedman advocated that manager"s primary responsibility is to operate the business for the shareholders. When considering social good, this is adding to the costs of doing business. Socioeconomic view: management"s social responsibility goes beyond making pro ts to include protecting and improving societal welfare. Based on the fact that corporations are not independent entities and must comply with laws and social responsibilities. Maximising pro ts of a company is its second priority and not its rst. Argues that perhaps its social responsibility is linked to its nancial performance as poor social responsibility will affect nancial return in the long run. Stage 1: management is responsible to owners and management. Stage 2: managers are responsible to employees. Stage 3: managers are responsible to the constituents of a speci c environment.
