According to Drucker ten years earlier in 1974, it was necessary that companies should involve themselves in social activities and in community welfare. He pointed out that corporates earned profits from their community and were implicated in the depletion of natural resources, so he reasoned that they also should contribute to environmental sustainability and responsible utilization of natural resources. In 1970, Freeman opposed that concept and opined that corporations were not intended for social action, arguing instead that they were legal entities responsible in the first instance for producing quality products for consumers, on the basis of legal rules and regulations for contributing to a nation’s economic development.
Employees involved themselves in the activities of their own interest and every one of them gave equal contribution. Shared and participatory management should be regarded as an essential commitment of a company to minimize or eliminate harmful influences and maximize long-term beneficial impacts on society.
< Back to 5.4
Impact on client Next to 5.6 >