Corporate Citizenship Theory Essay
When we talk about corporate first thing to come to mind is profits, as the main responsibility for any corporation is to maximize its profit. This was the main argument for the early days, that the corporate sole responsibility was to maximize profits only, as to achieve the most financial return to the shareholders. But those views proofed to be inadequate, as many new arguments arose after that giving a wider scope for the corporate responsibilities, seeing that it should expand beyond the economic reasonability to add new dimensions, primarily the environmental and social ones (Kitzmueller & Shimshack, 2012).
Many empirical researches argued the importance of these new dimensions to the corporate, and how it could benefit the firm as well
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The corporate citizenship theory
This theory argues that corporations are responsible and liable to help solving the social problems in their society. Furthermore, it argues that business owe a duty to promote and develop their society same as individuals, this duty arises from the social power granted by the society to business, so that corporations should use this power in doing good for their society (Matten & Crane, 2003).
The corporate citizenship theory rest on three key dimensions, those are the legal, ethical and philanthropic responsibility. The legal responsibility is that to corporations should be abided by the laws and regulations. The second responsibility is the ethical, where corporation is responsible to do what the right, just, and fair action, even though it is not liable to do so. Finally, the philanthropic responsibility which incorporates activities aiming at improving the quality of living standards of employees, local communities, and the whole society. Here there are two views of the theory, one is the limited view which incorporates only the social rights as the only philanthropic responsibility for the company, while according to the extended view there are civil and political rights added to this social one (Matten & Crane,
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