Crane et al.
© Crane et al., 2019. All rights reserved.
Crane et al.
Business Ethics (5th Edition)
Chapter 2
Crane et al.
© Crane et al., 2019. All rights reserved.
Framing Business Ethics:
Corporate Responsibility, Stakeholders, and
Citizenship
Lecture 2
Crane et al.: Business Ethics, 5th edition
Overview
•Analyse the notion of responsibility for
corporations
•Distinguish the various concepts of CSR
•Present the stakeholder theory of the firm
•Outline the concept of corporate accountability
•Critically examine the notion of corporate
citizenship
•Discuss implications of these –mostly US-born –
concepts for different regions
Crane et al.: Business Ethics, 5th edition
Towards a framework for business
ethics
What is a corporation?
Crane et al.: Business Ethics, 5th edition
Key features of a corporation
•A corporation is essentially defined in terms
of legal status and the ownership of assets
•Corporations are typically regarded as
‘artificial persons’ in the eyes of the law
• Corporations are notionally ‘owned’ by
shareholders, but exist independently of them
• Managers and directors have a ‘fiduciary’
responsibility to protect the investment of
shareholders
Crane et al.: Business Ethics, 5th edition
Can a corporation have social
responsibilities?
• Milton Friedman’s classic article is “The social
responsibility of business is to increase its
profits” (1970)
•Friedman vigorously argued against the
notion of social responsibilities for
corporations based on three main arguments:
–Only human beings have a moral responsibility for
their actions
– It is managers’ responsibility to act solely in the
interests of shareholders
–Social issues and problems are the proper
province of the state rather than corporate
managers
Can a corporation be morally
responsible for its actions?
•Long, complex debate but generally support from
literature for some degree of responsibility
accredited to corporations. Argument based on:
–Every organisation has a corporate internal decision
