Chapter 3 Ethics and Corporate Social Responsibility

Question 1

Social Trends
Social Responsibility
Ethics

Answer 1

Social changes and their impact on the business environment.
The responsibilities a firm has to its stakeholders.
A set of moral standards for judging whether an action is right or wrong.

Question 2

Responsibilities to Stakeholders

Answer 2

Customers
Employees
Suppliers
Investors
Government
General Public

Question 3

Neo-Liberal School

Answer 3

Maximise profit, obey law.
A firm exists to maximise shareholder value, and must obey the “laws of the land”.
Improvements in health, freedom, etc. are due to economic growth arising from free enterprise.
CSR is a distraction that reduces positive effects of a market economy.
Video: Milton Friedman

Question 4

CSR School:

Answer 4

Include public interest in decision-making.
Maximise shareholder value, obey laws, uphold ethical standards, follow international norms.
Triple-bottom-line decision-making: Economic, Environmental, Societal.
Firms voluntarily embrace responsibility for the impact of their activities.