Which of the following actions is consistent with social responsibility but is not necessarily inconsistent with stockholder wealth maximization?
A) Selling a smokestack "scrubber" to follow the firm's air pollution policy to overlook conditions mandated by law.
B) Dumping effluent discharge into a river, where it ruins the drinking water of the community around the plant. The installation of machinery to treat the effluents is very expensive.
C) Investing in a smokestack filter to reduce sulphur-dioxide emissions in order to reduce the current tax being levied on the firm by the state for its pollution.
D) Making a large corporate donation to the local community in order to fund a recreation complex that will be used by the firm's employees only.
E) Consider buying out the competitor's business in an attempt to establish monopoly for its product in the market.

Question

Quizplus · Accepted Answer

Investing in a smokestack filter to reduce sulphur-dioxide emissions is consistent with social responsibility because it benefits the environment and public health. However, it is also consistent with stockholder wealth maximization as it can reduce the tax being levied on the firm by the state for its pollution, saving the company money in the long run. The other options listed are not consistent with social responsibility as they cause harm to the environment or community, or prioritize the interests of the company over those of society.

Which of the Following Actions Is Consistent with Social Responsibility