Explain the relationship between the global economy and social responsibility

Describe the arguments for and against social responsibility. Today, virtually all managers endorse social responsibility of corporations. It is, instead, a matter of what types of responsibility and the degree of responsibility. The arguments against social responsibility are: The job of the corporation is to maximize profits for stockholders; Businesses are better suited to produce goods and services and not to be involved in welfare services; If global competitors aren’t socially responsible they will have lower costs and can compete more effectively in the global marketplace. The arguments for social responsibility are: It’s the right thing to do; Government will create new regulations and levy fines if firms aren’t socially responsible; Social responsibility can enhance a company’s profitability Questions 5.1 Explain the relationship between the global economy and social responsibility. 5.2 Defend the proposition that the only responsibility of the firm is to make money for the stockholders. 5.3 Explain how a firm can earn additional profits by being socially responsible.

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