Models of the relationship of the firm to society

Journal of Business Ethics 5 (3):181 - 191 (1986)
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Authors of books on business ethics and corporate social responsibility fall into two general approaches when they answer the question: Why should a business firm, which represents private property, have greater obligations to the local community than an ordinary citizen? Authors generally subscribe to a rights approach or to a power model. This paper will present four rights approaches and three power models which are used to describe the relationship of the firm to society. Introducing these different approaches and models will be two brief expositions which provide the setting for determining the relationship of a firm to society. The first traces two lines to the development of the contemporary American corporation. The second views the business corporation as a quasi-public institution.



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