Stakeholders

Question 1

What is Friedman’s definition of stakeholder theory?

Answer 1

Any person who can be affected by or is affected by the achievement of the firm’s objectives

Question 2

What is Freeman’s definition of shareholder theory?

Answer 2

Any group that has a moral claim are the ones who own shares of the stock

Question 3

What are the four levels of Carroll’s pyramid of CSR?

Answer 3

Philanthropic (supporting ‘good causes’ in the community)
Ethical (stakeholder engagement)
Legal (compliance)
Economic (profit)

Question 4

Name 4 arguments for CSR

Answer 4

1. Businesses is unavoidably involved in social issues
2. They have the resources to tackle today’s complex societal problems
3. Better society= Better environment to do business in
4. Corporate social action prevents government action

Question 5

Arguments against CSR

Answer 5

1. Profit maximisation= efficient use of society’s resources
2. Businesses lack the ability to pursue social goals
3. Business already has enough power
4. Business managers are not elected so they are not directly accountable to society

Question 6

What is globalisation?

Answer 6

Integration of economies, industries, markets, cultures and policy-making around the world

• National and regional economies, societies and cultures have become integrated through the global network of trade, communication, immigration and transport.