knowledge of the Corporate Social Responsibility

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Reflection week 5: Stakeholder vs Shareholder Responsibility
Example 1
From my previous studies I have acquired the knowledge of the Corporate Social
Responsibility (CSR), which supports Friedman (2002) view that businesses’ only social
responsibility is to use their resources to maximize profits for shareholders because firms do
not have the expertise to engage in solving social problems. Yet, when I read the module’s
core textbook about CSR (Frynas and Mellahi, 2011),I thought businesses should operate in
the way that satisfies mainly their shareholders from the first stage of the product life cycle,
and just in further stages take concern about stakeholders. However, an article of Creating
Shared Value (CSV) changed my entire view on the issue and helped me to understand this
paradox. As explained in the Appendix 1, Porter and Kramer (2011) demonstrate, that
through the CSV approach businesses have the power of being involved in solving social and
environmental problems, by creating shared value from the beginning of the product/service
life cycle, hence, satisfying firm’s shareholders and stakeholders simultaneously. As an
example can be used an innovate business of Jason Drew, who has created a new market and
through a creation of shared value made a business profitable for shareholders, stakeholders
as well as society. To sum up, I have learned that no business should prioritize one party over
another, because if the business is able to innovate and make a creation of shared value
possible, then each party can be satisfied from the very beginning of product/service life
cycle.

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