When a company chooses what principle to follow on issues of ethics and social responsibility, there are two common philosophies to use as guides: let the free market and legal system decide or let individual mangers and companies choose.

Question

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The statement correctly describes the two common philosophies used as guides for companies to choose their principles for ethics and social responsibility. The first philosophy is known as laissez-faire, where companies rely on the market and legal system to determine ethical behavior. The second philosophy is known as corporate social responsibility, where companies take an active role in selecting and enforcing their ethical principles.

When a Company Chooses What Principle to Follow on Issues