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CSR and Stakeholder Theory: A Tale of Adam Smith

Author

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  • Jill Brown

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  • William Forster

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Abstract

This article leverages insights from the body of Adam Smith’s work, including two lesser-known manuscripts—the Theory of Moral Sentiments and Lectures in Jurisprudence—to help answer the question as to how companies should morally prioritize corporate social responsibility (CSR) initiatives and stakeholder claims. Smith makes philosophical distinctions between justice and beneficence and perfect and imperfect rights, and we leverage those distinctions to speak to contemporary CSR and stakeholder management theories. We address the often-neglected question as to how far a company should be expected to go in pursuit of CSR initiatives and we offer a fresh perspective as to the role of business in relation to stakeholders and to society as a whole. Smith’s moral insights help us to propose a practical framework of legitimacy in stakeholder claims that can help managers select appropriate and responsible CSR activities. Copyright Springer Science+Business Media B.V. 2013

Suggested Citation

  • Jill Brown & William Forster, 2013. "CSR and Stakeholder Theory: A Tale of Adam Smith," Journal of Business Ethics, Springer, vol. 112(2), pages 301-312, January.
  • Handle: RePEc:kap:jbuset:v:112:y:2013:i:2:p:301-312
    DOI: 10.1007/s10551-012-1251-4
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    File URL: http://hdl.handle.net/10.1007/s10551-012-1251-4
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    References listed on IDEAS

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    1. Navarro, Peter, 1988. "Why Do Corporations Give to Charity?," The Journal of Business, University of Chicago Press, vol. 61(1), pages 65-93, January.
    2. A. Lindgreen & V. Swaen, 2005. "Corporate Citizenship: Let Not Relationship Marketing Escape the Management Toolbox," Post-Print hal-00255808, HAL.
    3. David P. Baron, 2001. "Private Politics, Corporate Social Responsibility, and Integrated Strategy," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 10(1), pages 7-45, March.
    4. Phillips, Robert, 2003. "Stakeholder Legitimacy," Business Ethics Quarterly, Cambridge University Press, vol. 13(01), pages 25-41, January.
    5. Phillips, Robert A., 1997. "Stakeholder Theory and A Principle of Fairness," Business Ethics Quarterly, Cambridge University Press, vol. 7(01), pages 51-66, January.
    6. Freeman, R. Edward, 1994. "The Politics of Stakeholder Theory: Some Future Directions," Business Ethics Quarterly, Cambridge University Press, vol. 4(04), pages 409-421, October.
    7. Bryan W. Husted & José de Jesus Salazar, 2006. "Taking Friedman Seriously: Maximizing Profits and Social Performance," Journal of Management Studies, Wiley Blackwell, vol. 43(1), pages 75-91, January.
    8. Schwartz, Mark S. & Carroll, Archie B., 2003. "Corporate Social Responsibility: A Three-Domain Approach," Business Ethics Quarterly, Cambridge University Press, vol. 13(04), pages 503-530, October.
    9. Philipp Schreck, 2011. "Reviewing the Business Case for Corporate Social Responsibility: New Evidence and Analysis," Journal of Business Ethics, Springer, vol. 103(2), pages 167-188, October.
    10. Young, Jeffrey T., 2008. "The Humean Foundations Of Adam Smith'S Theory Of Property," Journal of the History of Economic Thought, Cambridge University Press, vol. 30(01), pages 49-64, March.
    11. Duane Windsor, 2006. "Corporate Social Responsibility: Three Key Approaches," Journal of Management Studies, Wiley Blackwell, vol. 43(1), pages 93-114, January.
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    Citations

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    Cited by:

    1. Chin-Shien Lin & Ruei-Yuan Chang & Van Thac Dang, 2015. "An Integrated Model to Explain How Corporate Social Responsibility Affects Corporate Financial Performance," Sustainability, MDPI, Open Access Journal, vol. 7(7), pages 1-20, June.
    2. Tareq O. Bani-Khalid & Ahmed H. Ahmed, 2017. "Corporate Social Responsibility (CSR): A Conceptual and Theoretical Shift," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 7(1), pages 203-212, January.
    3. repec:gam:jsusta:v:10:y:2018:i:7:p:2356-:d:156629 is not listed on IDEAS
    4. repec:eee:finlet:v:23:y:2017:i:c:p:291-299 is not listed on IDEAS
    5. Najah Attig & Sadok El Ghoul & Omrane Guedhami & Jungwon Suh, 2013. "Corporate Social Responsibility and Credit Ratings," Journal of Business Ethics, Springer, vol. 117(4), pages 679-694, November.

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