Which of the following statements is correct?
A) The ability of firms to engage in socially beneficial projects that involve voluntary costs is constrained by competition and the need of firms to attract capital at low cost.
B) The actions that maximize a firm's stock price are inconsistent with maximizing social welfare.
C) The concepts of social responsibility and ethical responsibility on the part of corporations are completely different and neither is relevant in maximizing stock price.
D) In a competitive market,if a group of firms do not spend resources making social welfare improvements,but another group does,in general,this will not affect the second group's ability to attract capital.
E) If government did not mandate socially responsible corporate actions,such as those relating to product safety and fair hiring practices,most firms in competitive markets would still pursue such policies voluntarily.

Question

Quizplus · Accepted Answer

A) The statement correctly identifies a fundamental tension in corporate strategy: firms must balance the pursuit of social or ethical objectives with the economic pressures of competition and the need to attract capital efficiently. This balance can limit the extent to which a firm can voluntarily engage in socially beneficial projects, especially if those projects involve significant costs.

Which of the Following Statements Is Correct