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

Kestrel Foods, a listed manufacturer, publishes an annual report in which it states that its only responsibility is to maximise shareholder wealth while obeying the law. Which view of corporate social responsibility does this reflect?

This is Friedman's pure shareholder view. The company says its only duty is to maximise shareholder wealth within the law, so social responsibility goes no further than legal compliance, unlike stakeholder or sustainability approaches that accept wider obligations.

  1. AFriedman's pure shareholder view, with CSR limited to legal complianceCorrect
  2. BThe stakeholder view, where all groups have equal claims
  3. CThe sustainability view, balancing the triple bottom line
  4. DThe Carroll philanthropic view, where giving back is central

Explanation

Friedman argued that the social responsibility of business is to increase profits within the rules of the game. Kestrel limits itself to law and shareholder wealth, so this is the pure shareholder view. The stakeholder and triple bottom line views would require wider obligations.

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