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Book ChapterDOI

The Social Responsibility of Business Is to Increase Its Profits

01 Jan 2007-pp 173-178

AbstractWhen I hear businessmen speak eloquently about the “social responsibilities of business in a free-enterprise system”, I am reminded of the wonderful line about the Frenchman who discovered at the age of 70 that he had been speaking prose all his life. The businessmen believe that they are defending free enterprise when they declaim that business is not concerned “merely” with profit but also with promoting desirable “social” ends; that business has a “social conscience” and takes seriously its responsibilities for providing employment, eliminating discrimination, avoiding pollution and whatever else may be the catchwords of the contemporary crop of reformers. In fact they are — or would be if they or anyone else took them seriously -preaching pure and unadulterated socialism. Businessmen who talk this way are unwitting puppets of the intellectual forces that have been undermining the basis of a free society these past decades.

Topics: Social responsibility (53%)

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Journal ArticleDOI
Abstract: In this paper we draw on recent progress in the theory of (1) property rights, (2) agency, and (3) finance to develop a theory of ownership structure for the firm.1 In addition to tying together elements of the theory of each of these three areas, our analysis casts new light on and has implications for a variety of issues in the professional and popular literature, such as the definition of the firm, the “separation of ownership and control,” the “social responsibility” of business, the definition of a “corporate objective function,” the determination of an optimal capital structure, the specification of the content of credit agreements, the theory of organizations, and the supply side of the completeness-of-markets problem.

45,832 citations


Journal ArticleDOI
Abstract: ?The stakeholder theory has been advanced and justified in the management literature on the basis of its descriptive accuracy, instrumental power, and normative validity. These three aspects of the theory, although interrelated, are quite distinct; they involve different types of evidence and argument and have different implications. In this article, we examine these three aspects of the theory and critique and integrate important contributions to the literature related to each. We conclude that the three aspects of stakeholder theory are mutually supportive and that the normative base of the theory-which includes the modern theory of property rights-is fundamental. If the unity of the corporate body is real, then there is reality and not simply legal fiction in the proposition that the managers of the unit are fiduciaries for it and not merely for its individual members, that they are . . . trustees for an institution [with multiple constituents] rather than attorneys for the stockholders.

9,532 citations


Journal ArticleDOI
Abstract: This article presents conclusions from a 10-year research program, the purpose of which has been to develop a framework and methodology, grounded in the reality of corporate behavior, for analyzing and evaluating corporate social performance. There are three principal sections: (a) a summary of the approaches, models, and methodologies used in conducting more than 70 field studies of corporate social performance from 1983-1993; (b) a discussion of the principal conclusions derived from the data that (1) corporations manage relationships with stakeholder groups rather than with society as a whole, (2) it is important to distinguish between social issues and stakeholder issues, and (3) it is necessary to identify the appropriate level of analysis in order to evaluate CSP; and (c) a discussion of propositions and areas for further research.

6,435 citations


Journal ArticleDOI
Abstract: F or the better part of 30 years now, corporate executives have struggled with the issue of the firm's responsibility to its society. Early on it was argued by some that the corporation's sole responsibility was to provide a maximum financial return to shareholders. It became quickly apparent to everyone, however, that this pursuit of financial gain had to take place within the laws of the land. Though social activist groups and others throughout the 1960s advocated a broader notion of corporate responsibility, it was not until the significant social legislation of the early 1970s that this message became indelibly clear as a result of the creation of the Environmental Protection Agency (EPA), the Equal Employment Opportunity Commission (EEOC), the Occupational Safety and Health Administration (OSHA), and the Consumer Product Safety Commission (CPSC).

6,369 citations


Journal ArticleDOI
Abstract: Most theorizing on the relationship between corporate social/environmental performance (CSP) and corporate financial performance (CFP) assumes that the current evidence is too fractured or too variable to draw any generalizable conclusions. With this integrative, quantitative study, we intend to show that the mainstream claim that we have little generalizable knowledge about CSP and CFP is built on shaky grounds. Providing a methodologically more rigorous review than previous efforts, we conduct a meta-analysis of 52 studies (which represent the population of prior quantitative inquiry) yielding a total sample size of 33,878 observations. The meta-analytic findings suggest that corporate virtue in the form of social responsibility and, to a lesser extent, environmental responsibility is likely to pay off, although the operationalizations of CSP and CFP also moderate the positive association. For example, CSP appears to be more highly correlated with accounting-based measures of CFP than with market-based ...

5,881 citations


References
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01 Jan 2009

3,235 citations


Journal Article
Abstract: Although researchers have concentrated on various measures of customer satisfaction (CS) and the relationship of CS to firm performance, they have done little to determine what constitutes the best practices of firms focusing on CS as a corporate strategy. These authors report the results of their investigation into the best practices of four manufacturing firms with reputations for delivering high levels of customer satisfaction. They found that, although the firms developed a CS strategy for different reasons, each had similar characteristics that enabled them to concentrate on satisfying the customer. While the firms generally outperformed the average firm in their industry in profits and asset utilization after adopting a customer satisfaction strategy, they were not as successful in increasing market share; nor has the market valued them as highly as it has valued others in their industry. Finally, the authors suggest ways companies can improve their customer satisfaction measures and practices.

318 citations


Book
01 Jan 2004
Abstract: Providing a complete treatment of business-to-business marketing, this text captures and integrates developments in market analysis, relationship management, supply chain management, marketing strategy development and electronic commerce.

279 citations


Book
01 Jan 1998
Abstract: Part I Introduction: 1. The Business Marketing Environment. Part 2 How Buyers Buy: 2. Fundamentals of the Purchasing and Materials Management Function 3. Management of the Business Buying Function. Part 3 Identifying the Customer: 4. Business Marketing Research and Information Systems 5. Market Segmentation, Positioning and Demand Projection. Part 4 Making and Moving the Goods: 6. Product Development, Management, and Strategy 7. Business Price Planning and Strategy 8. Business Marketing Channel Participants 9. Business Physical Distribution Management and Strategy. Part 5 Promoting and Selling the Goods: 10. The Personal Selling Function in Business Marketing Strategy 11. Business Sales Management 12. Advertising and Sales Promotion Strategy in Business Markets. Part 6 Trend in Business-to-Business Marketing 13. Marketing of Business Services 14. International Business Marketing 15. Ethical Considerations in Business-to-Business Marketing. Part 7 Comprehensive Cases.

254 citations


Journal ArticleDOI
TL;DR: A conceptual approach to the segmentation of industrial markets together with results from an exploratory survey of current segmentation practices in industry and two examples to encourage appropriate use of market segmentation in planning and control of marketing strategies are presented.
Abstract: Professors Wind and Cardozo present in this paper a conceptual approach to the segmentation of industrial markets together with results from an exploratory survey of current segmentation practices in industry. Although segmentation is often claimed to have been used as a marketing tool it could be that its main use is to explain results in an expost study after marketing has taken place. Wind and Cardozo naturally wish that market segmentation strategies be used a priori and present two examples to encourage appropriate use of market segmentation in planning and control of marketing strategies. Although in the author’s words their approach is “conceptual” the Editorial Board of /MM believe it to be practical, Should any readers disagree that the segmentation approach can and should have an impact on the marketing of industrial goods we shall be pleased to hear from them.

242 citations