socially responsible companies
Organizations have many obligations and responsibilities to fulfill, which include economical, legal and ethical responsibilities, to name a few. Those social responsibilities (among others) must be fulfilled in order to satisfy its Stakeholders and guarantee it’s long-term survival. According to Investopedia, the new field of corporate social responsibility (CSR) has encouraged companies to take the interests of all stakeholders into consideration during their decision-making processes instead of making choices based solely upon the interests of shareholders.
On the other hand, Milton Friedman argues that the only social responsibility that organizations have is to satisfy their owners (i.e. company shareholders) (Williams, 2014 p.77). This view is called the shareholder model and it’s all about maximizing profits. Friedman believes that organizations cannot effectively act as moral agents for all company shareholders. “Doesn’t it make more sense to have companies do what they do best, make good products at fair prices, and then let consumers use the savings for the charity of their choice?” asks Russell Roberts, an economist at George Mason University (Williams, 2014 p.78).
According to “Reputation Institute”, a private global consulting firm based in New York, our willingness to buy, recommend, work for and invest in a company is driven 60% by our perception of the company or it’s reputation and only 40% by our perception of its products or services. (Forbes)
BMW, a very economically successful automaker, made it to the Forbes’ top 10 list of the most socially responsible companies of 2013 (Forbes). For years, BMW focused on education, intercultural understanding, road safety, health, community relations and cultural issues; In October 2012 BMW started concentrating on the efficient use of resources and intercultural innovation and social inclusion.
References
Socially responsible companies (03-10-2014):
On the other hand, Milton Friedman argues that the only social responsibility that organizations have is to satisfy their owners (i.e. company shareholders) (Williams, 2014 p.77). This view is called the shareholder model and it’s all about maximizing profits. Friedman believes that organizations cannot effectively act as moral agents for all company shareholders. “Doesn’t it make more sense to have companies do what they do best, make good products at fair prices, and then let consumers use the savings for the charity of their choice?” asks Russell Roberts, an economist at George Mason University (Williams, 2014 p.78).
According to “Reputation Institute”, a private global consulting firm based in New York, our willingness to buy, recommend, work for and invest in a company is driven 60% by our perception of the company or it’s reputation and only 40% by our perception of its products or services. (Forbes)
BMW, a very economically successful automaker, made it to the Forbes’ top 10 list of the most socially responsible companies of 2013 (Forbes). For years, BMW focused on education, intercultural understanding, road safety, health, community relations and cultural issues; In October 2012 BMW started concentrating on the efficient use of resources and intercultural innovation and social inclusion.
References
Socially responsible companies (03-10-2014):
References: Socially responsible companies (03-10-2014): http://www.forbes.com/sites/jacquelynsmith/2013/10/02/the-companies-with-the-best-csr-reputations-2/ BMW citizenship report: http://www.bmwgroup.com/e/0_0_www_bmwgroup_com/verantwortung/svr_2012/gesellschaftliches_engagement.html Investopedia on Corporate Social Responsibility (03-10-2014): http://www.investopedia.com/ask/answers/08/difference-between-a-shareholder-and-a-stakeholder.asp MGMT6 6th, Williams, 2014. Chap.4, p.77-84