• For
Public expectations Long-run profits Ethical obligation Public image Better environment Discouragement of further governmental regulation Balance of responsibility and power Stockholder interests Possession of resources Superiority of prevention over cures
© 2007 Prentice Hall, Inc. All rights reserved.
5–2
LEARNING OUTLINE
Follow this Learning Outline as you read and study this chapter.
Social Responsibility and Economic Performance
5–9
Reflection question
• Which do you find most compelling: the arguments for or the arguments against social responsibility?
© 2007 Prentice Hall, Inc. All rights reserved.
ninth edition
STEPHEN P. ROBBINS
MARY COULTER
Chapter
5
© 2007 Prentice Hall, Inc. All rights reserved.
Social Responsibility and Managerial Ethics
PowerPoint Presentation by Charlie Cook The University of West Alabama
• “The business of business is business.”
• --- Milton Friedman (former University of Chicago economist and a Nobel laureate)
© 2007 Prentice Hall, Inc. All rights reserved.
© 2007 Prentice Hall, Inc. All rights reserved.
5–11
Wall Street
• ―Greed is Good‖
• ―If you want a friend get a dog‖

Wall Street – 1985 2Unions, politicians, activists --- companies face a Babel of interests. But there’s only one owner. A company is for its shareholders. They own it. They control it. That’s the way it is, and the way it should be.
corporate citizenship responsible business sustainable responsible business (SRB)
© 2007 Prentice Hall, Inc. All rights reserved.
5–7
Warm-up question
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5–6
Social Responsibility: definition
• Social responsibility is a form of corporate selfregulation integrated into a business model. • CSR: consideration of, and response to, issues beyond the narrow economic, technical, and legal requirements of the firm to accomplish social benefits along with the traditional economic gains that the firm seeks.
© 2007 Prentice Hall, Inc. All rights reserved.
5–12
Do you agree?
• Milton Friedman and others have argued that a corporation's purpose is to maximize returns to its shareholders, and that since only people can have social responsibilities, corporations are only responsible to their shareholders and not to society as a whole. They assert that corporations have no other obligation to society.
• Against
• Critics argue that CSR distracts from the fundamental economic role of businesses; others argue that it is nothing more than superficial windowdressing.
5–4
L E A R N I N G O U T L I N E (cont’d)
Follow this Learning Outline as you read and study this chapter.
Managerial Ethics
• Discuss the factors that affect ethical and unethical behavior. • Describe the important roles managers play in encouraging ethical behavior.
• Why should a corporate bear the
social responsibility?
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5–8
Arguments For and Against Social Responsibility
Values-Based Management
• Discuss what purposes shared values serve. • Describe the relationship of values-based management to ethics.
© 2007 Prentice Hall, Inc. All rights reserved.
Expending the firm’s resources on doing ―social good‖ unjustifiably increases costs that lower profits to the owners and raises prices to consumers.
LEARNING OUTLINE
Follow this Learning Outline as you read and study this chapter.
What is Social Responsibility?
• Contrast the classical and socioeconomic views of social responsibility. • Discuss the role that stakeholders play in the stages of social responsibility. • Differentiate between social obligation, social responsiveness, and social responsibility.
Violation of profit maximization Dilution of purpose Costs Too much power Lack of skills Lack of accountability
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Jack Welch, General Electric’s former CEO
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5–14
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5–3
L E A R N I N G O U T L I N E (cont’d)
Follow this Learning Outline as you read and study this chapter.
5–10
Two Views of Social Responsibility
• The Classical View
Management’s only social responsibility is to maximize profits (create a financial return) by operating the business in the best interests of the stockholders (owners of the corporation).