Business organizations regularly run into demands from various stakeholders groups when conducting day-to-day business. These demands are generated from employees, customers, suppliers, community groups, governments, and shareholders. Thus, according to Goodpaster, any person or group of people that can shape or can be shaped by attainment of the objectives by an organization is considered a stakeholder. Most business organizations recognize and understand their responsibilities to these groups and endeavor to honor and fulfill them. These responsibilities are often communicated to the public by a statement of principles or beliefs. For many business organizations, corporate social responsibility (CSR) has become an essential and integral
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Additionally, business’ role is to promote and engage in the trade of goods and services for a profit. As a result of this trade, businesses, in the classical view, are helping to advance individual self-interest, to promote personal responsibility of agents and organizations, to boost freedom of interaction, and to encourage self-interest expressed in organized activities.
The stakeholder view of CSR is a social relationship oriented philosophy where business organizations are essentially societal entities interconnected with various groups of people, and their respective successes are attributed to their social existence. In the stakeholder view, business organizations are public entities, and as such they are considered agents capable of contributing to the welfare of the public. As full and active members in society, business organizations are expected to help bear the cost of society’s problems since they also receive and enjoy the benefits of its social infrastructure, labor, and natural resources. Business organizations, in the stakeholder view, should add social responsibilities (i.e., concern for all stakeholders) to the pursuit of profits as they do business.
The stakeholder view has brought ethical concerns to the forefront of businesses. As discussed in class, if businesses think only about profits (i.e., classical view) and not about people (i.e., stakeholder