When we place our first step into the world of business, we have heard businessmen speak expressively about the aim of the company is to make profit and not to address social responsibilities. This is only certain truth to this statement as the world we live in now is evolving. People in the current era are more concern about social responsibility especially with corporations and their behaviours and plans. There is an increasing demand on businesses to have a “social conscience” and taking serious responsibility for providing employment, eliminating discrimination, ethical working environment and whatever else is related to having a “social conscience”.
In today’s business world, corporate social responsibility (CSR) is an essential
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2009) Stakeholders have more power than organisations as they can disrupt their operations if the organisation is not able to meet their standard and may shut it down. There are basically primary and secondary stakeholders. Primary stakeholders consist of employees, customers, communities, financiers and suppliers. Secondary stakeholders consist of the government, competitors, media, special interest group and consumer advocate groups.
By understanding the welfare of the various stakeholders, firms are able to run safely and continue operating. Due to many social influences, innovations, firms entering and exiting, stakeholders’ welfares and utility function are interchangeable. Firms must have a clear understanding of the stakeholders’ utility function and welfare. By doing so, firms can put themselves in to a better competitive advantage in the market because they know what each stakeholders’ utility is.
The term sustainability is often used in businesses today. It is best described as ‘having to do with the flourishing of life on Earth over an indefinite time frame, and where this flourishing of life goal incorporates ideas of human and ecological wellbeing, grounded in principles of intra- and inter-generational justice.’ (Clifton and Amran 2010) In other