Profit maximization is the ultimate goal: Business units are accused of having profit maximization as their goal. Corporate social responsibility makes it clear that corporations should therefore find better ways to handle their waste disposal. Answer: TRUE Diff: 3 Page Ref: 95 Define corporate social responsibility. Skeptics often claim that businesses should focus on profits and let the government or nonprofit organizations deal with social and environmental issues. Options (a), (b), (d) and (e) are all arguments for Social Responsibility of Business. So if a corporation spends money on good causes, is it ethical? The Friedman doctrine, also called shareholder theory or stockholder theory, is a normative theory of business ethics advanced by economist Milton Friedman which holds that a firm's sole responsibility is to its shareholders. Common arguments against corporate social responsibility argue that: A) CSR detracts from the fundamental economic role of businesses. of Michigan Law School Comparative Research in Law & Politi-cal Economy, Research Paper No. B) CSR does not achieve a triple bottom line. D. A majority of stockholders are against it. Corporate social responsibility makes it clear that it is certainly unethical for these corporations to be making profits at the expense of the environment and other aspects of the human life. 1. Business enterprises are sub systems of the larger society. B) Social responsibility is not mandated by law, which means that it has to be done by will, not by compulsion. 4) Socially responsible businesses tend to have less-secure long-run profits. b) as an economic institution, business lacks the ability to pursue social goals. The final major argument against corporate social responsibility in its various forms is that the best way for most corporations to be socially responsible is to contribute to the community by doing what they do best: excelling in economic terms. b. business is not equipped to handle social activities. Arguments for and against Corporate Social Responsibility. CSR is an argument of moral reasoning that reflects the relationship between a company and the society within which it operates. Requires skills businesses may lack. d. there are no financial benefits of social or environmental initiatives. If you have any queries regarding Social Responsibilities of Business and Business Ethics CBSE Class 11 Business Studies MCQs Multiple Choice Questions with Answers, drop a comment below and we will … C. Improves business value and reputation. c. there is no positive relationship between CSR and shareholder returns. Arguments for CSR: Economic Argument. Violation of Profit Maximisation: As per this argument, business enterprises claim that our objective is profit maximisation. Learn More → Modern consumers have a healthy awareness of the role corporations play in enacting social and political change. Keith Davis elaborately discussed the various points put forth by classical economists in support of their contentions in an article under the style, “The Case For and Against Business Assumption of Social Responsibilities”. Corporate social responsibilities today also help provide for a number of different programs that help transform the world for the better. corporate social responsibility is irrelevant: Companies that simply do everything they can to boost profits will end up increasing social welfare. The Fraud of Corporate Social Responsibility (CSR) There is a mistaken belief that being ‘ethical’ means being ‘good’ or ‘nice’. Long run survival of the organization and the public both. 7 Arguments for and against social responsibility for business organizations. Moral Justification. Since business operates in a world of poverty and hunger, the economic efficiency of business is a matter of priority and should be the sole mission of business. In a more logical fashion, Keith Davis has advanced many good points in favor of corporate social responsibility. We hope the given NCERT MCQ Questions for Class 11 Business Studies Chapter 6 Social Responsibilities of Business and Business Ethics with Answers Pdf free download will help you. His line of arguments are given below: 1. Avi-Yonah, Corporate Social Responsibility and Strategic Tax Behavior, in TAX AND CORPORATE GOVERNANCE 183 (Wolfgang Schon ed., 2008); and Reuven S.¨ Avi-Yonah, Taxation, Corporate Social Responsibility, and the Business Enterprise, (University. Creates an imbalance between corporate power and its economic responsibility. C) Empirical studies have not yet demonstrated a definitive relationship between corporate social responsibility and profitability. Arguments For & Against Corporate Social Responsibility. Common arguments against corporate social responsibility argue that: Select one: a. CSR detracts from the fundamental economic role of businesses. 1. which of the following is an argument for increased social responsibilities? A. b. CSR does not achieve a triple bottom line. 06/12/2013 08:57 am ET Updated Aug 12, 2013 It happens very often when I speak about sustainability and corporate responsibility, and it happened again last week. Business can reduce its cost and raise profits and then only it can meet its social responsibility. Read article about Arguments For and Against Social Responsibility! D) there are no financial benefits of social or environmental initiatives. The unfortunate reality is that most companies see CSR as public relations and marketing. C) there is no positive relationship between CSR and shareholder returns. This shareholder primacy approach views shareholders as the economic engine of the organization and the only group to which the firm is socially responsible. Learning Objectives. Common arguments that go against CSR are: Ambiguity in business policies. Requires skills businesses may lack B. Answer: ... Answer: Arguments against social responsibility. It means the duty of an organization towards society in order to prove itself responsible about its actions and their effects on environment, community and external stakeholders. Arguments Against Corporate Social Responsibility. The common arguments that are in favor of Corporate Social Responsibility (CSR) are: Public image of the company. This applies not only to the environment and society, but also to a company’s own employees, stakeholders, and reputation. Milton Friedman claimed that free markets, rather than companies, should decide what is best for the world. Corporate Social Responsibility, which is often called CSR, is a business term that refers to the actions a for-profit business takes to improve the lives of people within a community. Arguments against Social Responsibility. Which of the following is an argument against corporate social responsibility? Viability of Business: A business corporation exists only because it performs certain valuable services to the society. To fulfill their economic objectives, they will have to draw from the various resources which the society has got. Moral Responsibility. Corporations should focus on earning a profit for their shareholders and leave the social issues to others. Public Support for business. Someone will ask me about Milton Friedman's famous quote: "There is one and only one social responsibility of business -- to increase its profits." These initiatives can not only benefit the community and the environment, but they can also turn out to be a smart business move. A. Corporate Social Responsibility The term “corporate social responsibility” came in to common use in the early 1970s. For and Against Corporate Social Responsibility. Milton Friedman Was Wrong About Corporate Social Responsibility. Skill: AACSB: Ethics 5) One argument against businesses championing social responsibility issues is that businesses already have too much power. Hence from above discussion, we can infer that option (c) is correct. Which of the following is an argument against corporate social responsibility? This statement refers to the assertion made by Milton Friedman (1970) who obviously not in favor of CSR engagement. All of the following are arguments commonly made against corporate social responsibility except a. social problems should be addressed first by the free-market economic system, and then, if necessary, by government. Corporate social responsibility (CSR) in the middle area of responsibility is the most difficult to coordinate for many large corporations, but has gained considerable importance – precisely because it is in this area that the most damage can occur. Pyramid of Corporate Social Responsibility successfully combines the purposes of the firm, including the economic purpose of the firm as advocated by Friedman (1970), as well as philanthropic responsibilities of a firm, arising from Corporate Citizenship highlighted in Real Entity Theory (Dodd, 1932). c. business already has enough power--it should not be given more. Firstly, Friedman fails to acknowledge that acting ethically can be a valuable marketing proposition. B. Most arguments both for and against CSR are based on how a company’s attempts to be socially responsible affect its bottom line. Key Takeaways Key Points. Creates an imbalance between corporate power and its economic responsibility C. Improves business value and reputation D. All of the following are arguments against corporate social responsibility except the argument that a) because managers are not elected, they are not directly accountable to the people. Although, Corporation Social Responsibility can come across as an idealistic idea, especially as it is voluntary process and lack regulation and therefore subjected to abuse of power by decision making companies in the social domain, it actually produces favourable results if applied positively. Rationale for the business organizations to fulfill certain social responsibilities is listed here under. D) Profitability and growth go hand-in-hand with responsible treatment of employees, Answer: FALSE Diff: 3 Page Ref: 95 Topic: What Is Social Responsibility? Contrast the views in favor of and opposing corporate social responsibility. T or F: The invisible-hand argument against broadening corporate responsibility says that business's appetite for profit should be controlled by the hand of the government True T or F: Milton Friedman argues that business has a responsibility to provide employment, refrain from polluting, and eliminate discrimination, even when it's not profitable to do so If corporate social responsibility is detrimental to business, as suggested by Friedman, then shareholders will tend to avoid investing in companies that act socially responsible. Chapter 5: Management's Social and Ethical Responsibilities 111 124. Weakened International Balance of Payments is an argument against Social Responsibility of Business. CSR is an argument of economic self-interest for businesses. By doing so, the firm is more likely to create greater value and, as a result, retain the loyalty of those stakeholders. 19/2009, 2009). Image: Arguments in favor of Social responsibilities of Business. CSR adds value because it allows companies to reflect the needs and concerns of their various stakeholder groups. These programs are unique, are expanding in scope and scale, and provide businesses as well as local and global community members with a whole host of advantages. As a result, social issues are used as advertising campaigns. There is, however, empirical evidence that this is not the case. Arguments against social responsibility. This article was published in the “Academy of Management Journal” in June 1973.

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