Theoretical Review Models Concepts Frameworks Business Essay


Friedman,1970 cited in Galbreath 2009, p.111 theory states, the sole responsibility of business firms is to maximize profit.

According to Friedman (1970 cited in Galbreath 2009, p.111 ), it is the firm responsibility to meet the economic needs and that only leads to the welfare of the society and it s the role of the government, service organizations, educational institution to meet the societal welfare.

After the publication of the thesis of Friedman, (1970) as cited in Galbreath (2009), there was much research on the social responsibilities of the firm. Galbreath (2009) states that 'In the late 1970s, Carroll (1979) offered one of the first - and perhaps still the most widely accepted conceptualisations of CSR (Matten and Crane, 2005).'

In Galbreath (2009), Carroll's (1979) model conceptualises the responsibilities of the firm as:

(1) the economic responsibility to generate profits;

(2) the legal responsibility to comply by local, state, federal, and relevant international laws;

(3) the ethical responsibility to meet other social expectations, not written as law

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(e.g. avoiding harm or social injury, respecting moral rights of individuals, doing what is right, just, fair); and

(4) the discretionary responsibility to meet additional behaviours and activities that society finds desirable (e.g. philanthropic initiatives such as contributing money to various kinds of social or cultural enterprises).

In Galbreath (2009), Friedman's (1970) social responsibilities, stakeholder theory and corporate social responsibility, Carroll (!979) are normative: they give a description of what the dos and don'ts of the firm in terms of their societal responsibilities (Rodriguez et al., 2002)

Scholars have looked at the social issues concept, mainly through the life-cycle approach (cited in Galbreath (2009), Lamertz et al., 2003). Although several definitions exist, a widely accepted definition in the life-cycle tradition describes social issues as:

'Social problems that may exist objectively but become "issues" requiring managerial attention when they are defined as being problematic to society or an institution within society by a group of actors or stakeholders capable of influencing either governmental action or company policy (Mahon and Waddock, 1992, p. 20; emphasis added).'

Corporate managers analyse the internal and external environment in terms of "opportunities" and "strengths" that is based on the theories of strategy (Learned et al., 1969; Andrews, 1971). According to Ansoff (1980, p. 133),

"a strategic issue is a forthcoming development, either inside, or outside the organization, which is likely to have an important impact on the ability of the enterprise to meet its objectives". Galbreath (2001) presented his view as: given Ansoff's (1980) definition of a strategic issue social issues is one of the various factors that need to be identified as the and assessed in internal and external environments.

Mahon and Waddock (1992), asserts that social problems take the path of three to four stages before becoming a social issues. There are unmet social needs that leads to social problems before transforming in social issues. Social issues are propagated by social actors or stakeholders. Social problems are not official. Social issues are known to the governmental policy makers and corporate managers. So the two social related factors have to be analysed to address their strategic significance.

(Schumpeter, 1934; Nelson and Winter, 1982; Jacobson, 1992) economic growth can be attained through innovation. (Schumpeter, 1934; Jacobson, 1992; Hill and Deeds, 1996; Chan Kim and Mauborgne, 2004) presented the views below. Innovation can be an opportunity to meet social needs and deal with social issues instead of considering them as a threat. The knowledge acquired from the target markets, target customer needs and the unmet social needs and/or social issues directly from the market, can be used to explore the opportunity to reach new markets and gain competitive advantage. This can be done by introducing new customer offerings, developing new processes or creating new market segments. The objective is to meet unfulfilled social needs. (McWilliams and Siegel, 2001; Mackey et al., 2007; Husted and Salazar, 2006), a firm meets a societal demand and fulfils its reponsibilities by creating both economic benefit and consumer utility.

Developing trust and cooperation between stakeholders takes time, which in turn leads to mutually beneficial value exchanges. Such exchanges are beneficial to the firm's stakeholders in that they receive value in excess of the effort required to engage in the exchanges; to the firm, they gain advantages that lead to improved performance (Jones,1995; Prahalad, 1997 in Galbreath 2009). Further, the ethical characteristics of honesty and trust reduce transaction costs because fewer protective devices are needed if the firm has trustworthy agents and less time is spent in negotiation if initial claims are truthful (Williamson, 1985; Hosmer, 1995). Thus, the costs of an option based on these characteristics are lowered, so that it may become the preferred option, especially where transaction costs are high relative to other costs. In this sense, trustworthiness has been argued to be a source of CA (Barney and Hansen, 1994). Logically, this has strategic implications for the ethical responsibility of the firm per Carroll's (1979)

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Stakeholder theory also recognises that firms have explicit costs (e.g. payments to bondholders) and implicit costs (e.g. environmental costs, human resource costs).

Stakeholder theory predicts that if firms try to lower their implicit costs by acting socially irresponsible (e.g. not investing in pollution control systems, treating employees poorly) they will actually incur higher explicit costs, which can result in a competitive disadvantage. Reflecting this logic, Alexander and Buchholz (1982) argue that demonstrating high levels of responsibility towards stakeholders is an indicator of superior management skill, which leads to lower explicit costs. Also, the actual costs of stakeholder management versus the benefits may be minimal. For example, enlightened employee management policies may have a relatively low cost, but the gains in productivity, morale and retention can yield substantial performance advantages over less responsible firms (Huselid, 1995).

2.2 Empirical Review

Applied Studies and Findings

social responsibilities are different from social issues but closely linked (Galbreath 2009).

The society have expectations on the firm and these are social responsibilities. These responsibilities are related to factors. These are social issues. These factors can have an effect on the ability of the firm to meet objectives , and can also affect the social responsibilities. This view has been supported in the work of Galbreath (2009).

Galbreath (2009) states that

'In this sense, these definitions help to describe what the "firm side" of the social contract (Donaldson and Dunfee, 1994, 1999) between business and society consists of. On one hand, the "formal" social contract defines a firm's explicit responsibilities, including generating returns for shareholders, obeying laws and regulations, creating jobs, paying taxes, and honouring private contracts. On the other hand, the "semiformal" social contract reflects society's implicit expectations. Here, society's unspoken expectations of firms include responsibilities such as adherence to global labour and environmental standards (e.g. SA 8000, AA 1000, ISO 14031) that are not required by law, triple bottom-line reporting, following industry norms and codes of conduct, fulfilling brand promises and contributing philanthropically to the community.'

According to Galbreath (2009) a social issue is something that is found wrong with society. The view below is supported by Galbreath (2009). The controversial point is an object for social discussion and the concept is used for themes that are under intense public debate. The social issue looks at four aspects that are interrelated.

A social issue is not an individual issue but may arise from an individual.

A social issue is not a universal issue. It exists within a particular social context at a particular point in time and history.

There is an assumption of how the way things should be to say or observe that something is wrong or there is a problem in society

If there is a perceived idea of how things should be, then the social issue can be resolved by some way. In short, a social issue in the above context is based on classic sociology definitions and theories of social change (Merton, 1957; Ogburn, 1964 cited in Galbreath, 2009, p.112).

Galbreath (2009) expressed this view. The definition implies that social problems exist at the societal level (but not necessarily at the organizational level) and these problems are elevated to the "status" of a social issue by the actions of various actors, including stakeholders. However, such a definition does not address how these social problems and issues might be an opportunity for the firm and thus, is problematic with respect to the concept of strategy.

Galbreath (2001) cited that

'some firms signal that CSR is a fundamental purpose - mission - of their existence. As part of its mission, The Body Shop makes cosmetics that do not hurt animals. Here, The Body Shop has addressed a social issue - animal cruelty - through the very core of their business: developing the highest quality, innovative, effective and safe cosmetic products.

Ben & Jerry's Homemade Ice Cream, on the other hand, has a three-part mission: product, economic and social. Ben & Jerry's mission can be further expressed through the following description:

. Capitalism and the wealth it produces do not create opportunity for everyone equally. We recognize that the gap between the rich and the poor is wider than at anytime since the 1920s.We strive to create economic opportunities for those who have been denied them and to advance new models of economic justice that are sustainable and replicable.. By definition, the manufacturing of products creates waste. We strive to minimize our negative impact on the environment.'. The growing of food is overly reliant on the use of toxic chemicals and other methods that are unsustainable.We support sustainable and safe methods of food production that reduce environmental degradation, maintain the productivity of the land over time, and support the economic viability of family farms and rural communities.. We seek and support non-violent ways to achieve peace and justice. We believe government resources are more productively used in meeting human needs than in building and maintaining weapons systems. . We strive to show a deep respect for human beings inside and outside our company and for the communities in which they live[1].'

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Gabreath , 2009 cited that Corporate executives acknowledge that CSR is an important consideration for driving success. However, at the same time they admit to struggling with uncertainty about how to anticipate which unmet social needs or social issues will affect their firms or how to develop corresponding "win-win" strategies. Similarly, from a scholarly perspective, much has been written to suggest that CSR is vital to competitive success; however, efforts have predominately focused on conceptual and theoretical advancements and empirical tests between CSR and firm performance. Unfortunately, this leaves a gap with respect to CSR and strategy. If an assumption is made that CSR is important to competitiveness, and if strategy serves as a foundation for a business firm's creation, while establishing its position in the market, its competitiveness and its on-going existence, then placing CSR within the context of strategy seems vital. Thus, an attempt at elaborating this relationship surfaces a few important implications. First, CSR should not be viewed solely in terms of the responsibilities firms assume toward society or to whom they are responsible. Normatively postulating, for example, that firms have an economic responsibility to generate profits or a legal responsibility to obey appropriate laws or that firms have a responsibility to meet the needs of various stakeholder groups (and who those groups are) does not describe how they can do so in a strategic manner. What has been suggested is that in order to understand CSR strategically, unmet social needs and social issues, as well as the responsibilities firms assume toward society, need to be considered individually - and corporately.

This is necessary so that CSR can be more accurately addressed within the fundamental dimensions of strategy.

This leads to the second implication and a question: to what degree does CSR have to be built into strategy before it can be considered "strategic"? In the life of a company, a variety of different opportunities or threats are continually faced and decisions made to address them. At any given point in time one aspect of the six-dimensions of strategy described in this chapter might be more important than others. Furthermore, some scholars have connected "strategic" CSR with contributing slack resources (i.e. profit spending) to societal and community needs that are tied to organizational objectives and strategy, such as philanthropy, sponsorships and cause-related marketing (Mullen, 1997; Lantos, 2002; Porter and Kramer, 2002). Strategically, this is a narrow view and is predominately tied only to the discretionary (philanthropic) component of Carroll's (1979) conceptualization of CSR.

As demonstrated in this paper, CSR is not an organizational phenomenon strategically confined to a narrow dimension within the firm. In fact, when taking corporate responsibilities, unmet social needs and social issues into consideration, synergies develop that are important for several dimensions of strategy. For example, while the economic responsibility to produce profits constitutes part of the firm's formal social contract, by exploring unmet social needs and social issues through




strategy dimensions such as markets served, customer needs and resources required to compete, a firm not only can address social opportunities that generate profits (thereby meeting its economic responsibility to shareholders), but can offer societal benefits as well (Burke and Logsdon, 1996; Husted and Salazar, 2006). This implies that "strategic" CSR is far more than an ad hoc approach or a bolt on to strategy or something that is

strategic only when viewed within the realm of a singular dimension of a firm's responsibilities, such as the discretionary responsibility. Rather, when considered inlight of the six dimensions described in this chapter, CSR can be more fully integrated into corporate strategy.

Lastly, mounting research evidence suggests that an increasing number of actors,both internal and external to the firm, are placing more and more demands on firms' social responsibilities and how they address factors of a social nature (Paine, 2002; Aguilera et al., 2007). Unfortunately, companies are not necessarily following suite. For

example, nearly 50 percent of companies surveyed in a recent study report that they have substantial room for improvement with respect to CSR (McKinsey and Company, 2006). The following is suggested. First, contrary to some views (Murray and Montanari, 1986; Lantos, 2002), corporate executives - not marketing or public relations departments - should take the lead role in developing CSR and integrating it with the firm's strategy, while developing a culture that is highly attuned to the social factors that might impact on the firm. The reason being is that it is corporate executives who ultimately have to answer to society, shareholders and other stakeholders about decisions made and strategies taken. This approach is consistent with the role of executives described in the literature (Barnard, 1938; Andrews, 1971). Second, facing and addressing social factors is not simply acting "responsibly"; it is related to what markets to serve, what offerings are necessary to meet and exceed customer needs, how to gain a competitive advantage, among other dimensions of strategy, as well as to costs and profitability. It is also related to corporate credibility, acceptance and support, resulting in a firm's freedom to act and implement its strategies. inally, typical approaches firms take towards CSR are based on producing annual social and environmental reports and the issuing of corporate policies on ethical issues (Davis, 2005). Such approaches are too limited, too defensive and too disconnected from corporate strategy. As described in this chapter, CSR does not have to be confined to an altruistic end to strategy (i.e. philanthropy) or to an ethical obligation (i.e. code of conduct). Rather, CSR can be given due consideration across six dimensions of corporate strategy, contributing ultimately to good management practice, economic benefit, and societal welfare.


Business firms are the economic engine of society and the making of profits is a social responsibility (Carroll, 1979; Henderson, 2005). However, in the current climate, issues of a social nature are bearing on firms to the point that CSR appears to be the new battle ground for competitive success (Porter and Kramer, 2006). If this is true, then

firms not only need be concerned about how to best meet the interests of their shareholders, but also the interests of society at large. In this sense, strategy takes on significant meaning not only with respect to fulfilling social responsibilities and the development of firms, but also with respect to the development and sustainability of

society/nations (Raimond, 1996; Rodriguez et al., 2002) (Figure 2). Firms who better

Building CSR

into strategy


understand their social responsibilities and who begin to more adequately explore how they can build CSR into strategy are likely to reap the rewards of improved competitive positions in the future, to the benefit of their shareholders, but also to the benefit of society at large.

In order to more strategically address CSR, this paper made an argument that firms need to consider six strategy dimensions:

(1) firm mission;

(2) strategic issues;

(3) markets;

(4) customer needs;

(5) resources; and

(6) competitive advantage.

As strategy is concerned with understanding and addressing issues that impact on a firm's ability to achieve its mission, so that products/services can be produced to meet the needs of the markets it serves through effective resource configuration, in order to build and sustain competitive advantage, considering CSR in light of these dimensions offers a means to systematically explore ways in which social responsibilities can be

built into strategy. Otherwise, firms run the risk of equating CSR with codes of ethics,triple bottom line reports and public relations campaigns, for example. Such approaches are too limited, too defensive and are too disconnected from strategy.


As described on Ben & Jerry's website,

2.3 Case Studies

Hidayati N D, (2011) made a case study to identify the pattern of CSR run by four companies namely

PT Unilever Indonesia Tbk, PT Sari Husada PT, Astra International Tbk, and PT Aneka Tambang Tbk.

He found that the four companies show high commitment to execute the CSR programs and business ethics. They are also involved in the triple bottom line ( Hidayati N D,2011).

Unilever Indonesia and Sari Husada are two consumer goods companies. Hidayati N D, (2011) stated that they carried out CSR programs that are both related and unrelated to their core business. He also found that Astra International, the manufacturing company run programs that are both related and unrelated to the core business whereas the mining company, Aneka Tambang, conducts CSR programs that are unrelated to its core business. Another finding from the study of Hidayati N D, (2011) is that both the related and unrelated programs forms part of the sustainable development of the companies.


A bank with a heart

The MCB has always had the community's best interests at heart. Since its foundation in 1838, a long time before the term 'Corporate Social Responsibility' had even been coined, the MCB has been involved in activities designed to contribute to the welfare of society at large. Today, more than ever, our aim is to make a real difference in people's lives by working closely with the community at the local.

The MCB Forward Foundation was officially launched in September 2010 to serve the communities in which we operate even more efficiently. Our mission is to go beyond the funding of projects: our prime objective is to develop and support sustainable initiatives for the social, environmental and economic well-being of the community. The MCB Group contributes 2% of its book profits derived from the preceding year to the MCB Forward Foundation on an annual basis.

Corporate Social Responsibility

Air Mauritius LTD


The Company supports charitable institutions in the form of rebated tickets, fund raising prizes, and community based promotional activities each year. In addition to these numerous activities, donations are made to charitable institutions by the Company. No donations have been made to any political party or organisation.

The company has also recently signed an agreement with the Mauritian Wildlife Foundation (MWF) in support of the conservation projects of the endemic flora and fauna of Mauritius.

In joining forces with the Mauritian Wildlife Foundation, Air Mauritius shows its commitment to protect the precious natural heritage of our island. This exclusive partnership brings hope to future successful conservation projects.

The main initiatives included in the programme are :

The one take-off / one tree initiative which

  involves planting one endemic tree for each

  take-off of an Air Mauritius aircraft from

  Mauritius. Under this project, 6,000

  endemic trees will be planted each year

  in Mauritius and Rodrigues to help restore

  natural habitats and create local awareness.

Air Mauritius will actively support the two

  endemic Rodriguan birds : The Rodrigues

  warbler (Acrocephalus rodericanus) & the

  Rodrigues fody (Foudia flavicans)

Air Mauritius shall use the "Paille en

  Queue"(Red Tailed Tropic Bird) image

  in its marketing activities for

  raising awareness on the protection of

  this rare species and its natural


********* to remove *****************

Lance Moir


Wood (1991) states that:

'the basic idea of corporate social responsibility is that business and society are interwoven rather than distinct entities.'

An alternative view of the firm following the behavioural theorists (Cyert and March, 1963; cited in

Wartick and Wood, 1998) might view corporate social activity from a standpoint that examines the political

aspects and non-economic influences on managerial behaviour. This might also be extended to examine

personal motivations, such as the Chairman's personal preferences or alternatively some of the critical

perspectives associated with the exercise of power. This approach has two identifiable strands of development. The first is associated with some form of moral or ethical imperative that because business has resources, it is part of the role of business to assist in solving social problems. Thus, Holmes (1976), in a study of executive attitudes to social responsibility, finds that the strongest response was that ``in addition to making a profit, business should help to solve social problems whether or not business helps to create those problems even if there is probably no short-run or long-run profit potential''.

Proponents of CSR claim that it is in the enlightened self-interest of business to undertake various forms of CSR. The forms of business benefit that might accrue would include enhanced reputation and greater

employee loyalty and retention. We can identify this approach in some of the current approaches by business.

So, the introductory section of the recent report by the World Business Council for Sustainable Development on Corporate Social Responsibility (WBCSD, 1999) used phrases such as ``business benefits'', ``could destroy shareholder value'', ``control risks'', ``identify market opportunities'', ``improving reputation'' and ``maintaining public support''.

CSR Europe's approach is that business benefits from being more socially responsible and that

this can help to build sales, the workforce and trust in the company as a whole. The objective is to build

sustainable growth for business in a responsible manner.

Frederick (1994) identifies the development in the understanding of CSR up to 1970 as an examination of

``corporations' obligation to work for social betterment'' and refers to this as CSR1. However, around 1970 he notes a move to ``corporate social responsiveness'', which he calls CSR2. He identifies corporate social responsiveness as ``the capacity of a corporation to respond to social pressures''.

(Moir L. 2001) In effect the move from CSR1 to CSR2 reflects a move from a philosophical approach to one that focuses on managerial action.

Frederick (1994) identifies the development in the understanding of CSR up to 1970 as an examination of

``corporations' obligation to work for social betterment'' and refers to this as CSR1. However, around 1970 he notes a move to ``corporate social responsiveness'', which he calls CSR2. He identifies corporate social responsiveness as ``the capacity of a corporation to respond to social pressures''.

Latterly, Frederick (1986) has developed this analysis to include a more ethical base to managerial decision taking in the form of corporate social rectitude and terms this CSR3. In this development, Frederick claims that the study of business and society needs an ethical anchor to ``permit a systematic critique of business's impact upon human consciousness, human community and human continuity''. He asserts that whilst CSR1 was normative, it was hesitant and that CSR2 led to non-normative enquiry. Thus the requirement for a moral basis provides a normative foundation for managers to take decisions in the area of CSR. As part of a normative manifesto, he proposes that the

``claims of humanizing are equal to the claims of economizing''.

This approach is thus fundamentally different to that proposed by the neo-classical economists. Brummer (1991) in a wide-ranging review attempts to provide clear definitions of responsibility as well as looking at the different philosophical approaches. In a deep review of the meaning of responsibility, in this context he proposes that responsibility means that executives are held accountable for their actions. He summarises three types of corporate conduct normally thought of as requiring a rendering from executives:

(1) Actions performed that go beyond the corporation's domain of authority or permissibility.

(2) Non-performance of acts within the corporation's domain of responsibility.

(3) Inferior performance of acts within the latter domain.

In addition to the neo-classical approach, he discusses three further theories to explain to whom corporations might be accountable. These are stakeholder theories, which are discussed below, social demandingness theory where firms respond to demands from society and social activist theory. This last mentioned takes the position that although there should be concern for the welfare of the public, it is a concern for their welfare as an expression of their ideal or rational interests rather than merely their present or expressed interests. Few firms can be identified that adopt these last two approaches ±

possibly firms such as Traidcraft and the Body Shop might adopt the approach. By far the greater number of commentators that propose active CSR do this by means of stakeholder analysis (e.g. Steiner and Steiner, 2000; Frederick et al., 1992; Carroll, 1996). This is also true of approaches within the corporate

sector (e.g. Business Impact, 2000).

But how does business actually define CSR? The World Business Council for Sustainable Development proposes a definition for CSR as:

'the ethical behavior of a company towards society . . . management acting responsibly in its relationships with other stakeholders who have a legitimate interest in the business,' and CSR is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large.

Examples from individual companies in the area of CSR reinforce stakeholder analysis:

^ Johnson & Johnson: ``the company's responsibilities to be fair and honest, trustworthy and respectful, in

dealing with all our constituents'' (Johnson & Johnson, 2000).

^ Volkswagen (2000): adopt a position which builds both shareholder value and workholder value in

order to deliver ``sustainable growth for the future''.

They define CSR as ``the ability of a company to incorporate its responsibility to society to develop

solutions for economic and social problems''.

^ Shell: ``We all need to assess the impact our business makes on society and ensure that we balance the economic, environmental and social aspects of everything we do'' (Moody-Stuart, 1999).

C o r p o r a t e G o v e r n a n c e 1 , 2 2 0 0 1

Thus a current analysis of CSR would involve meeting the needs of all stakeholders and not just shareholders against some form of ethical basis. This basis is described by Business Impact (2000, p. 1.02) in the following key principles:

to treat employees fairly and equitably;

to operate ethically and with integrity;

to respect basic human rights;

to sustain the environment for future generations;

to be a caring neighbour in their communities.

Gray et al. (1996) describe society as

``a series of social contracts between members of society and society itself''.

(Moir L., 2001) In the context of CSR, an alternative possibility is not that business might act in a responsible manner because it is in its commercial interest, but because it is part of how society implicitly expects business to operate.

Donaldson and Dunfee (1999) develop integrated social contracts theory as a way for managers to take

decisions in an ethical context. They differentiate between macrosocial contracts and microsocial contracts. Thus a macrosocial contract in the context of communities, for example, would be an expectation that business provide some support to its local community and the specific form of involvement would be the microsocial contract.

Legitimacy theory Suchman (1995) defines legitimacy as

``a generalized perception or assumption that the actions of an entity are desirable, proper, or appropriate within some socially constructed system of norms, values, beliefs and definitions''.

Bringing together prior literature on legitimacy management ± including the strategic tradition of resource

dependence theory (Pfeffer and Salancik, 1978) and the institutional traditions (DiMaggio and Powell, 1983) ± he identifies three types of organisational legitimacy:

(1) pragmatic;

(2) moral;

(3) cognitive.

He also identifies three key challenges of legitimacy management:

(1) gaining;

(2) maintaining; and

(3) repairing legitimacy.

Suchman points out that

``legitimacy management rests heavily on communication''

± therefore in any attempt to involve legitimacy theory, there is a need to examine some forms of corporate communications.

Lindblom (1994, cited in Gray et al., 1996) notes that legitimacy is not necessarily a benign process for

organisations to obtain legitimacy from society. She argues that an organisation may employ four broad

legitimation strategies when faced with different legitimation threats:

(1) seek to educate its stakeholders about the organisation's intentions to improve that performance;

(2) seek to change the organisation's perceptions of the event (but without changing the organisation's

actual performance;

(3) distract (i.e. manipulate) attention away from the issue of concern;

(4) seek to change external expectations about its performance.

Thus there is a need to examine any particular corporate behaviour within its context and in particular to look for alternative motivations.

Thus legitimacy might be seen as a key reason for undertaking corporate social behaviour and also then

using that activity as a form of publicity or influence (Lindblom cited in Gray et al., 1996 and in Clarke, 1998). A converse view to this, i.e. not that business uses its power to legitimate its activity but, rather

that society grants power to business which it expects it to use responsibly, is set out by Davis, nd cited in Wood, 1991):

``Society grants legitimacy and power to business. In the long run, those who do not use power in a manner which society considers responsible will tend to lose it.'' In effect, this is a re-statement of the

concept of a social contract between the firm and society.