Practice Quiz

Paralegal Exam Prep

Category - Legal Envrmt

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The stockholder theory of corporate social responsibility asserts that:
  1. A corporation’s duty is to make profits while avoiding harm to others.
  2. A corporation must act in the best interest of society.
  3. A corporation must place social responsibility above profit.
  4. A corporation must strive to both increase profit and be socially responsible.
  5. A corporation's only duty is to increase profits.
Explanation
Answer: E. The stockholder theory of corporate social responsibility asserts that a corporation's only duty is to increase profits. The doctrine maintains that a corporation should have no social responsibility. It is also known as the Friedman Doctrine after Milton Friedman.
Category: Legal Environment
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