Businesses and corporate social responsibility Flashcards
Why does society need businesses?
To provide employment, wages, investment, innovation, profits and taxes
Why do businesses need society?
For demand, legal protection and the use of public assets and infrastructure
What is the free market view on the responsibilities of a business?
To provide wealth for its shareholders
What was Friedman’s counter arguement to the idea of CSR?
‘The business of business is business’
What was Jack Welsh’s arguement against CSR?
‘You have to make money before you can give it away’
Give the three main arguements against CSR?
- The only responsibility of businesses is to behave within the legal and ethical framework
- Efficiency will be reduced if businesses are constrained by ethics
- Businesses cannot decide what is in society’s interests
What type of firms now pay more attention to CSR?
Bigger companies
List the two main features of CSR
- Willing to do more than is required to help the community
- Not just taking considering the need of shareholders
List the benefits of CSR
- Ethical
- Improves image and reputation
- Avoid regulation
- Improving the social environment could prove profitable in the long run
- Attractive to stakeholders
- Increased employee motivation
What is the benefit of ethical policy?
It can provide a competitive advantage
Why do governments often have to regulate markets?
To enforce ethics
Give an example of a multinational that acts ethically and sustainably
Unilever
What is Archie Carroll’s view on CSR?
He thinks profit is important, but businesses also have a wider purpose and social responsibility. He sets this out in his CSR pyramid
What are the 4 elements of the CSR pyramid?
- Economic
- Legal
- Ethical
- Philanthropic
What is Carroll’s view of the economic responsibility of a business?
The responsibility is to be profitable; as this is the only way to survive and be a benefit to society in the long run
