Question

The two dominant views of Corporate Social Responsibility are Friedman’s Economic View and the Stakeholder View proposed by Galbraith and Freeman. Do the two views of CSR agree or disagree on what a corporation's social responsibilities are? Explain both how AND under what circumstances they might agree or disagree.

Answer 1

answer-

Edward Freeman’s stakeholder theory holds that a company’s stakeholders include just about anyone affected by the company and its workings. That view is in opposition to the long-held shareholder theory proposed by economist Milton Friedman that in capitalism, the only stakeholders a company should care about are its shareholders - and thus, its bottom line. Friedman’s view is that companies are compelled to make a profit, to satisfy their shareholders, and to continue positive growth.

By contrast, Dr. Freeman suggests that a company’s stakeholders are "those groups without whose support the organization would cease to exist." These groups would include customers, employees, suppliers, political action groups, environmental groups, local communities, the media, financial institutions, governmental groups, and more. This view paints the corporate environment as an ecosystem of related groups, all of whom need to be considered and satisfied to keep the company healthy and successful in the long term.

According to me, I agree to stakeholder's view where Company should not only view its bottom line but also seeks to satisfy the interest of outside stakeholders like customers, government, society at large.In this current scenario where there are many forces like technological, political, social etc are not in control of company then CSR view of stakeholder will help to make those forces into opportunities otherwise company would not be able to sustain in the market for long term if they does not seek to care about their shareholders.

the both views disagree in the circumstances that main motive of a firm is to improve its bottom line means profit and makes their customer satisfied but another condition arises where firms has significant influence of other stakeholders like suppliers, government rules and regulations then both views would clash or disagree with each other.