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

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These two philosophies, also known as the shareholder and stakeholder approaches, are commonly used as guides for companies when making decisions regarding ethics and social responsibility. The shareholder approach focuses on maximizing profits and fulfilling legal obligations, while the stakeholder approach considers the impact of a company's actions on all stakeholders, including shareholders, employees, customers, and the community. Ultimately, the choice of which approach to follow is up to the individual company.

When a Company Chooses Which Principle to Follow on Issues