Reflection week 5: Stakeholder vs Shareholder ResponsibilityExample 1From my previous studies I have acquired the knowledge of the Corporate SocialResponsibility (CSR), which supports Friedman (2002) view that businesses’ only socialresponsibility is to use their resources to maximize profits for shareholders because firms donot have the expertise to engage in solving social problems. Yet, when I read the module’score textbook about CSR (Frynas and Mellahi, 2011),I thought businesses should operate inthe 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 CreatingShared Value (CSV) changed my entire view on the issue and helped me to understand thisparadox. As explained in the Appendix 1, Porter and Kramer (2011) demonstrate, thatthrough the CSV approach businesses have the power of being involved in solving social andenvironmental problems, by creating shared value from the beginning of the product/servicelife cycle, hence, satisfying firm’s shareholders and stakeholders simultaneously. As anexample can be used an innovate business of Jason Drew, who has created a new market andthrough a creation of shared value made a business profitable for shareholders, stakeholdersas well as society. To sum up, I have learned that no business should prioritize one party overanother, because if the business is able to innovate and make a creation of shared valuepossible, then each party can be satisfied from the very beginning of product/service lifecycle.
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