Homework Chapter 3
Name: Nouf Al-Ardhi
ID: 200800083
Due Date: July, 8, 2012
Instructor: Dr. Emanuel Ntui
ASSE 4311 SUMMER 2012
SECTION: 202
Chapter 3: Social Responsibility and Ethics in Strategic Management
1. What is the relationship between corporate governance and social responsibility?
Corporate governance is the relationship among the board of directors, top management and
shareholders in determining the direction and performance of the corporation. While social
responsibility proposes that a private corporation has responsibilities to society that extend
beyond making a profit. The relationship between these two is called corporate social
responsibility (CSR).
Corporations are also citizens of the place where they are created. like other citizens, they
have social responsibilities. In good corporate governance, the management should be able to
meet their social responsibilities. These responsibilities include making sure that their products
are not hazardous to people and to the environment, sharing their profits for the good of the
community as a natural person or human being would do, donating to social causes, organizing
activities to benefit the community. Other good corporate governance practices that overlapped
with social responsibility is complying with applicable laws, setting good labor conditions for
employees, providing good products to the community, helping the economy through fair trade
practices, paying taxes and other obligations due the government, making sure that it is meeting
commitments to other people, natural and juridical alike. Good corporate governance will also
ensure that the entity will continue on a going concern existence so that it will be able to pay its
employees, pay taxes and give a return for stockholders.
In conclusion, corporate governance aims to make the corporation a good citizen by being
socially responsible.
2. What is your opinion of GAP International’s having a code of conduct for its suppliers? What
would Milton Friedman say? Contrast his view with Archie Carroll’s view.
My opinion is that the GAP internationals should have a code of conduct for its suppliers.
However, I think Milton Friedman would be against it since he argues against the concept of
social responsibility and he believes that the primary goal of business is profit maximization not
spending shareholder money for the general social interest. On the other hand, I think Archie
Carroll's view would be different than Friedman's. Carroll would agree on my opinion because
he states that the four social responsibilities of a business firm are economic, legal, ethical and
discretionary.