Some argue for the narrow view of corporate social responsibility on the ground that managers have a fiduciary responsibility to maximize the profits of their shareholders.As discussed in Chapter 5,one problem with this argument is that

Question

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The argument for the narrow view of corporate social responsibility based on fiduciary responsibility assumes that maximizing profits is the only obligation managers have towards their shareholders. However, this argument neglects the fact that managers have other obligations towards stakeholders such as customers, employees, and the wider community. Promises made to these stakeholders cannot be overridden by the single-minded pursuit of profits for shareholders. Therefore, B is the correct answer.

A is incorrect because the lack of a clear chain of command is not relevant to this argument.

C is incorrect because the argument assumes that managers know how to maximize profits.

D is incorrect because stockholders do expect company managers to make money for them, but this does not mean that maximizing profits should be the only goal of the company.

Some Argue for the Narrow View of Corporate Social Responsibility