In the context of corporate social responsibility, which of the following statements is true of stakeholder theory?
A)It states that companies should only focus on increasing shareholder wealth.
B)It states that social responsibility is best carried out by government agencies.
C)It states that a company is expected to be a good citizen in its community.
D)It states that the top management should not be involved in corporate social responsibility.

Question

Quizplus · Accepted Answer

Stakeholder theory states that a company has responsibilities towards all its stakeholders including shareholders, employees, customers, suppliers, and the community. Therefore, it expects the company to be a good citizen in its community by taking social responsibility initiatives. Option A and D are incorrect because stakeholder theory does not focus solely on increasing shareholder wealth and does not exempt top management from taking responsibility. Option B is incorrect because stakeholder theory emphasizes the role of companies in promoting social responsibility rather than putting the sole responsibility on government agencies.

In the Context of Corporate Social Responsibility, Which of the Following