stakeholder theory and social responsibility


So, I am discussing stakeholder theory and corporate social responsibility in my mba org theory class today (here’s a previous post on stakeholder theory; we’ve had lots of posts on the matter).  In preparation for the class we read Friedman’s statement on corporate social responsibility, and also a longish article that articulates the general ethos and principles of stakeholder theory and corporate social responsibility. 

To polarize the class, and to get the discussion and debate going, I do a (very) quick, casual (and completely unscientific) survey right at the beginning of class. Answer the below questions: 

1-strongly disagree; 2-disagree; 3-neutral; 4-agree; 5-strongly agree

a. Companies have a social responsibility (beyond profit) when operating in third-world countries

b. Relative to frontline employees – CEOs make too much money

c. It is NOT ok for a company to lay off 30% of its employees to realize more shareholder wealth

d. A company should NOT employ child labor even if it is the norm and legal in the country in question

e.. Companies can make too much profit

f.  Companies have a social responsibility beyond just making a profit 

(Tally up your points to see which side of the fence you sit on: 6 total points – you are an arch-capitalist; 18 – neutral for the most part; 30 – [insert whatever label you’d like]). I get lots of variance and lots of healthy discussion.

Written by teppo

April 2, 2007 at 4:52 pm

8 Responses

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  1. So, Teppo – what did your class score?


    Fabio Rojas

    April 2, 2007 at 5:21 pm

  2. On average? – I’ll let you know after class.



    April 2, 2007 at 5:22 pm

  3. I scored:




    April 2, 2007 at 5:31 pm

  4. Omar: For some of our readership I was going to label 30 points as “Truth,” but, your label works as well.



    April 2, 2007 at 5:45 pm

  5. n=25, or so

    a. 3.77
    b. 3.52
    c. 2.76
    d. 2.43
    e. 2.33
    f. 3.71

    average – 18.43

    Good discussion in all, with folks at the extremes passionately making their points.



    April 2, 2007 at 8:06 pm

  6. What I find interesting about CSR is that discussions of it tend not to align very well with notions of personal behavior. For instance, conservatives like Friedman and Bainbridge generally tend to believe that publicly-traded firms should obey the law, no more no less, but would be appalled at an ordinary human being who respected the bare minimum of law and gave no credence to custom (all that stuff about how freedom only works with a virtue).



    April 2, 2007 at 10:17 pm

  7. Good point Gabriel. I think this has something to do with the kind of personality we’ve created for organizations in our society. Some organizations DO care about more than survival and the bottom-line, but they tend to be organizations with identities that embrace social welfare activities as part of their identity. A for-profit company is really created with one central personality attribute – the motivation to make money for its shareholders.



    April 2, 2007 at 11:14 pm

  8. Rather than starting with the assumption of the present corporate economy as normal, and then arguing about what the corporation “should” do, it might be better to start with structural issues first. Look at the forms of state intervention that promote centralization, hierarchy, concentration of wealth, and the divorce of ownership from labor–not to mention negative externalities created by state intervention. Eliminate state subsidies to large size and centralization, and special structural privileges that make capital artificially scarce and expensive and tilt capital markets away from cooperative ownership, and the “should” stuff will take care of itself.

    If the average industrial firm were small, cooperatively financed, and producing for the local market, and if the productive workforce were typically the residual claimant, most of the built-in conflicts of interest assumed by these questions about what management “should” do would vanish into thin air.


    Kevin Carson

    April 3, 2007 at 3:38 am

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