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Caro's Adventures in Moldova!

Monday, May 21, 2007

do corporations have a social responsibility?

Stanford Business Magazine this week tackled the above question in several articles .... here is an excerpt:

"In 1970, the late economist Milton Friedman famously said the goal of a company is to maximize profits, as long as it’s doing so legally and ethically. Although some experts still say that view offers the clearest picture of how businesses should make decisions, most business executives take a more expansive view. A 2006 survey by McKinsey & Co., for example, found that only 16 percent of worldwide business executives said companies should focus on getting the highest possible returns while obeying all laws and regulations. In contrast, 84 percent said large corporations should generate high returns to investors but balance this with contributions to the broader public good. This interest in doing good raises questions about what, exactly, corporate social responsibility is, how it can be reconciled with profit making, and whether “corporate social responsibility” is even the best term to use. "

certainly one question we are trying to tackle is: do corporations have a responsibility or an opportunity? or both? perhaps it is semantics, which Prof Brady alludes to later in the referenced article, but in many ways there is a substantive difference that arises in the approach of the organization or business. it can be a "let's cover our backside" or "let's figure out how to apply our business model in a way that creates value for both shareholders and society". starbucks has arguably created a growing and dynamic specialty market out of "socially conscience" coffees. so has unilever in india by repackaging consumer goods to fit the needs of the "bottom of the pyramid". these are businesses identifying and taking advantage of social opportunities that make business sense.

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