Question

Corruptco is a large machine shop that fabricates metals. Corruptco maximizes profits and shareholder value by polluting the local river, where fish are often killed off due to the pollution, rather than installing a pollution abatement device. While this is not specifically in violation of the law, it does put burdens on the local community. Which theory of corporate social responsibility is Corruptco exhibiting

Answer 1

Answer: a. the narrow view, or invisible hand theory

Explanation:

When it comes to the narrow view theory of corporate social responsibility, companies put one thing above all else, the maximisation of shareholder wealth.

Any activity that would help them do so - legally - is considered fair game even if it leads to adverse effects. Corruptco is therefore adhering to this theory because they are polluting the the local river to maximize shareholder value.