1)Milton Friedman's approach:
Friedman argued a company should have no social responsibility to the open public or world because it is only concern is to boost profits intended for itself as well as for its shareholders. He says that when businesses concern themselves with the community rather than focusing on profits, it leads to totalitarianism. A corporation is definitely an artificial person and therefore cannot be socially responsible. The good qualities of friedman's concept:
1) Reduce profits in short work.
2) Probability of discord with shareholders.
3) Increase expense of products.
The cons of friedman's strategy:
1) Lost opportunity to build goodwill.
2) Hurt's corporate and business image.
3) Create intellectual problems.
The concept of the stockholder theory would not matches together with the idea of corporate social responsibility at the cost of the stakeholder. Some may argue that products provided to society industry of require builds additional allegiance into a corporation.
2) Freeman's approach:
His theory views that both the stockholders and stakeholders have the right to require certain actions from administration because every have a vested risk in the corporation. Freeman's factors are given under: 1) Freeman supports the names and looks approach. The organization must agree to to make a deal with risk holders. 2) Freeman thinks that there should be no absolute decision principles. The company need to accept to challenge each of it is opinions, in order to really have its stakeholders' needs into consideration. Company should certainly ask for relevance. 3) Freeman believes that an agreement is actually possible. If perhaps there are quarrels about pursuits between stakeholders, the company should not choose one over the other nevertheless must find a compromise, another way which will will satisfy the two interests. Therefore CSR encourages innovation because it clears the way to a world of possibilities and ideas.