Tuesday, January 7, 2014

What Is the Role of Business in Society?

The Classical Economic Model (Adam Smith)
An “invisible hand” promoted the public welfare. The public interest served by individuals pursuing their own economic self-interests. According to the classical economic model of business, profitability and social responsibility are the same thing.

The Socioeconomic Model

Business has an obligation to meet the needs of the many groups in society besides stockholders in its pursuit of profit. Stakeholder audit: Systematically identifying all the parties that could possibly be affected by the company’s performance.
Sample Stakeholder Audit for Wal-Mart, the World’s Largest Retailer

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