Strategic managers can consider four types of social commitment ,economic responsibility is one of them:
Economic responsibilities are the most basic social responsibilities of business. As we have noted, some economists see these as the only legitimate social responsibility of business. Living up to their economic responsibilities requires managers to maximize profits whenever possible. The essential responsibility of business is assumed to be providing goods and services to society at a reasonable cost. In discharging that economic responsibility, the company also emerges as socially responsible by providing productive jobs for its workforce, and tax payments for its local, state, and federal governments.
Economic responsibilities: The duty of managers, as agents of the company owners, to maximize stockholder wealth.
More from this Section
- Classical approach
Classical approach emphasized rationality and making organizations and workers as efficient as possible. Two major theories comprise the
- The Dynamics of social Responsibility
The various stakeholders of a firm can be divided into inside stakeholders and outside stakeholders. The insiders are the individuals or group that the firm’s actions affect.
- Real goals
If you want to know an organization’s real goals- the goals an organization actually pursues-you should observe what organizational
- Upward communication
Upward communication is communication that flows from employees to managers. It keeps managers aware of how employees feel about
- Debt financing
Money “loaned” to an entrepreneur or business venture that must be repaid at some point in time.
- Organizational culture
Organizational culture refers to the “characteristic values, traditions, and behaviors and a company’s employees share.” A value is a basic belief about...
- Leadership development
The effort to familiarize future leaders with the skills important to the company and to develop exceptional leaders among the managers employed.