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ACCA Strategic Professional · Strategic Business Leader · Stakeholder analysis and organisational social responsibility

Aldous Retail is asked by an investor why it spends on supplier audits and fair-wage programmes that reduce short-term profit. The finance director replies that these protect brand value and reduce long-term supply risk. Which CSR argument is this?

This is the business case for CSR. The finance director justifies the spending by its protection of brand value and reduction of long-term supply risk, so CSR is defended as supporting long-term shareholder value rather than as a purely moral or philanthropic act.

  1. AThe business case, linking CSR to long-term shareholder valueCorrect
  2. BThe moral case, where CSR is right regardless of returns
  3. CThe legal compliance case, avoiding prosecution only
  4. DThe philanthropic case, based on charitable donations

Explanation

The director justifies CSR through brand protection and lower supply risk, both of which support long-term value. That is the business case, not a purely ethical justification. Legal compliance and charity are not what the spending is described as.

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