The Socioeconomic view is a responsible that the firms have a moral responsibility to larger society to become involved in soical,legal and political issue.Also the corporations are not independent entities responsible only to stockholders and make the profits to include protecting and improving society's welfare.
There are four arguments in favor of business social responsibility. 1)Public expectations: Social expectations of business have increased dramatically since the 1960s.Public opinion in support of business pursuing social as well as economic goals is now well solidified.
2)Long run profits: Socially responsible businesses tend to have more and secure long run profits.This is the normal result of the better community relations and improved business image that responsible.
3)Ethical obligation: A business firm can and should have a conscience.Business should be socially responsible because responsible actions are right for their own sake. 4)Public image:Firms seek to enhance their public image to gain more customers, better employees, access to money markets, and other benefits.Since the public considers social goals to be important, business can create a favorable public image by pursuing social goals.
However,there are four argument against it.In classical view, the firms need to miximize profits by operating the business in the best interests of the stockholders.Also it will spend the firm's resources on doing social good.It lead the costs increase,lower profits to the owners and raises prices to consumers.
1)Violation of profit maximization: This is the essence of the classical viewpoint.Business is most socially responsible when it attends strictly to its economic interests and leaves other institutions.
2)Costs: Many socially responsible activities do not pay their own way.Business must absorb these costs or pass them on to consumers in higher prices. 3) Lack of broad public support:There is no broad mandate from society for...
Please join StudyMode to read the full document