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CS Professional · CSR and Social Governance · CSR and Sustainable Development Goals

Rakesh argues that a company's only social responsibility is to maximise profits for shareholders within the law. Which view of CSR does his argument reflect?

His argument reflects the classical, Friedman shareholder-focused view of CSR. It holds that a firm's sole responsibility is maximising profit within the law, treating discretionary social spending as misuse of shareholders' funds, unlike stakeholder theory or triple bottom line approaches.

  1. ACarroll's pyramid view that philanthropic duties are mandatory
  2. BStakeholder theory of broad responsibility to all groups
  3. CTriple bottom line approach
  4. DClassical (Friedman) view of the shareholder-focused firmCorrect

Explanation

The classical or Friedman view holds that business's social responsibility is to use resources to increase profits within the rules of the game, so social spending is a diversion of shareholders' money. Stakeholder theory and the triple bottom line take the opposite, broader view.

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