Corporate Social Responsibility and Corporate Excellence

2013 
Stakeholders and Stockholders: CSR the Old-Fashioned Way Milton Friedman’s oft-cited objection to traditional CSR is that corporations exist solely to create economic value for their shareholders. To Friedman, any charitable donations made by managers (to the local symphony, for example) could be justifi ed only if the donation or action promoted the corporation’s profi tability. He thus insisted that (1) any charitable donations must demonstrate a positive return on investment, and (2) that nonprofi t organizations (including cultural institutions) be supported only by voluntary individual donations. In contrast, advocates of CSR have encouraged managers to focus on stakeholders-in addition to shareholders-as a means to create positive value for society (see chapter 7).
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