Classical-Ownership Theory

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THEORIES USED, PAST AND CURRENT SITUATION Conceptual shifts from classical/Ownership theory (past) to stakeholder theory (currently) by majority of the organization in worldwide in the aspect of Corporate Social Responsibility (CSR): Classical/Ownership theory (past) Classical theory has two main perspectives which are “pure profit-making view” and “constrained profit-making view”. Some degree of dishonesty is acceptable under those perspectives due to the businessman have a lower set of moral standards than others people in the society. Besides that, deception also is probably a necessary component of a strategy in order to success in business, therefore businessman cannot afford to guide by ethics as conceived in private life. Thus, company…show more content…
Stakeholder theory is based on the notion that beyond share¬holders there are several agents with an interest in the actions and decisions of companies. Stakeholders are groups and indi-viduals who benefit from or are harmed by, and whose rights are violated or respected by, corporate actions. Stakeholders include shareholders, credi¬tors, employees, customers, suppliers, and the communities at large. Besides that, companies have a social responsibility which requires them to consider the interests of all parties affected by their actions. In the decision making process, management should not only consider shareholders but also anyone who is affected by their business decisions. Stakeholder theory holds that the goal of any company is or should be the flourishing of the company and all its principal stakeholders. Therefore, it is important to stress that shareholders are stakeholders and that dividing the world into the concerns of the two is “the logical equivalent of contrasting ‘apples’ with…show more content…
For example, forestry compa¬nies in Canada and Sweden focused on issues that were relevant to the most powerful stakeholders rather than on those issues that were relevant from an ethical or socially responsible point of view. In addition, company should behave to actively promote social interests, even when it is not expected or demanded by society. Companies also should be involved actively “in programs which can ameliorate various social ills, such as by providing employment opportunities for everyone, improv¬ing the environment, and promoting worldwide justice, even if it costs the shareholders
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