What Are Companies Responsible For Whom Should Executives Serve

Description

This document compares the main existing models on a company's social responsibility, in their descriptive, instrumental and normative aspects, with the intention of giving a rigorous theoretical foundation to an eminently practical problem: whom do executives serve and what should their priority be? To do this, it briefly reviews the shareholder model, models of corporate social responsibility (CSR) and, specifically, the stakeholder model. Finally, it introduces the idea of a company as a community of people who work together under the philosophy of the common good, which is the business vision that inspired the foundation of IESE.

Learning Objective

The document serves as a reference for discussions about the purpose of companies, whether in relation to a case where conflicts between the stakeholders' interests are addressed, where the extent of the company's social responsibility is examined or as material for a theoretical session on this topic. It involves making clear the need to ask these theoretical questions, precisely because of their immediate and important practical implications.

Keywords

Common good Corporate governance ethics responsibility Shareholders Stakeholders work