The social responsibility of companies and economic organizations according to the

classical concept is very limited. Enterprises and economic organizations should only
focus on realizing official economic goals; Other obligations should be left to specialized
organizations and functions. Advocates of this view argue that the government should
assume responsibility for social obligations for the following reasons:

+ Calculate the purpose. Established organizations have certain functions and tasks to
fulfill certain purposes, which are officially recognized by society. The main purposes of
economic organizations that are officially recognized by society and the legal system are
economic purposes. Not only that, the supervision and management of economic
organizations by society and legal authorities also force them to realize these goals.
Economic organizations are obligated and permitted to gather, exploit and use social
resources solely for the realization of these official purposes. Activities outside the
official scope of mission and purpose are not permitted or encouraged.

+ Scope of influence. In general, social issues often cover a wide range of subjects, fields
and regions. An economic organization does not have the power and capacity to deal with
these problems effectively and effectively on a large scale. They can and should only try
to fulfill their social obligations in relation to those within the organization and perform
well their economic obligations to society (tax obligations) to create a source of income
for them. specialized social organizations and other functional agencies to perform social
obligations.

Therefore, requiring businesses and economic organizations to fulfill other social

obligations only leads to overlapping, confusion and inefficiencies.

It should be noted that classicalists oppose corporate irresponsible attitudes towards

social issues; however, they do not support businesses directly involved in solving these
issues. They place their faith in the social division and specialization of the free market
mechanism, with limited government intervention, as the best way to achieve social
efficiency.

The classical view has several important limitations. Those who believe in
decentralization argue that, if businesses only focus on realizing economic goals, the
goals of profit, revenue and cost will be the main ones. At that time, businesses may find
ways to achieve these targets without caring whether the methods are honest or socially
desirable. On the other hand, it is much more costly to regulate by government to deal
with the social consequences of business than to prevent them from occurring. Putting a
business outside of its social responsibility can have adverse economic and social
consequences for society, especially when enterprises are large-scale or in positions of
great power and influence over the economy and society.

ii) “Tax” perspective

The tax perspective holds that businesses not only have economic obligations that are
most important, but also have to fulfill obligations towards the owners of assets. Since
businesses have to use social resources for economic activities, they are only considered
right when they use them for jobs and purposes approved by their trustees (shareholders).
Managers are considered to be performing the same obligations as an elected public
servant” towards their "electors - shareholders". business, financial development targets
to decide to contribute capital to the enterprise The use of resources by managers for
purposes that are inconsistent with the official purposes, functions and duties without
consent of the trustee will be considered synonymous with the "manager - elected
representative who is "hiring" his own "electors - promoters".

The tax point of view is similar to the classical view in the recognition that corporate
social responsibility is limited. However, the approach comes from a legal perspective.

The limitations of this view manifest in several points. Regarding the purpose, when
deciding to invest, shareholders are not only interested in financial parameters, but they
are also interested in the image, value, and reputation of the company. Stakeholders not
only invest their wealth and energy in the business, but also their beliefs and ambitions.
Therefore, in modern management, the overall goal (mission statement) of the company
is increasingly concerned and valued by managers and shareholders. As to how, similar
to the classical view, not only the interests of shareholders must be ensured, but also the
way in which businesses fulfill their obligations to their shareholders is also important.
Property owners aren't necessarily thrilled to see their wealth grow while others suffer
damage, pain, or then pay a higher price for their future lives. In terms of benefits,
benefits can be obtained both in the short term and in the long term. Caring for immediate
benefits is often seen as short-sighted; concerned with the long term can be considered
strategic. After all, when businesses fulfill their social obligations to earn respect and
reputation from society, they may be acting on behalf of shareholders to “invest in the
future.” Regarding the rights of owners. There is a view that assets do not belong to
anyone forever, they are accumulated gradually in the past, transferred temporarily, and
added and accumulated to pass on to others or the next generation. Like managers,
shareholders are only temporary owners and “trustees to manage and use” society's
assets. They are also responsible for adding value and social wealth, not for their "selfish"
interests.
iii) “Management” perspective

The management view holds that property ownership is relative and that it is, in essence,
only a temporary use of the property. Property is often expressed in terms of value, but
that is only a temporary reflection of material wealth that was natural at a time in a
society. Material possessions are not created by humans, they are transformed into the
form of existence, accumulated in nature and society. Enterprises are only temporary
users; their responsibility is to preserve and contribute to the development of society's
wealth. They are entrusted with the power to “manage” social assets. Thus, ownership of
shareholders is only a formality, they are also temporary trustees of the right to control
and use a part of social assets. Due to limited decision-making and action capacity, they
have to perform or delegate their “management” obligations to the business. Real
property belongs to society as a whole.

From management point of view, corporate behavior is no longer constrained by direct

obligations to shareholders but to society more broadly. Their actions are not only
controlled by the wishes of shareholders, but more importantly by society's expectations.
Thus, in addition to satisfying direct obligations to shareholders, businesses also have the
responsibility to fulfill obligations to society. Because society has a very broad meaning,
it is difficult to concretize; The performance of the obligations of the enterprise must be
self-disciplined with a real sense of responsibility. According to this view, self-discipline
comes from "kindness" and responsibility comes from "a sense of entrusted duty".

The management perspective is more advanced than the classical view because it shows
that the obligations of enterprises and economic organizations are not limited to formal
and passive obligations, but more importantly, the consciousness towards them. with
social obligations, spontaneously. The basic limitation of this view is that self-discipline
and a sense of responsibility are not enough to help business managers make decisions
about social obligations to perform or when they have to contend with challenges. moral
contradictions. Therefore, this view has little practical value

iv) The “stakeholder” perspective

The view of stakeholders is that the activities of an economic organization or enterprise

are not only related to several direct objects such as shareholders, employees, managers,
but also many stakeholders. Different objects such as customers, partners, competitors,
associations, communities, governments... in society are interested in different reasons
and purposes. Instead of focusing only on serving the interests of a few direct
stakeholders, businesses need to care about satisfying the interests and purposes of all
stakeholders at the same time.

The view of stakeholders is that "society" is an abstract concept, not concrete. That
makes "social responsibility" also become vague, unrealistic.It is certain that no one can
satisfy all T objects in society; nor is it necessary to learn and satisfy satisfy the wishes of
all different social groups, including those who do not have any ties or feel tied to the
business's activities.Only "interested people" are those who have benefits are tied to the
business's activities and really care about protecting their interests, they represent the
whole society in the business's activities. materialized by specific people, this view is a
promising exit for the management perspective. It is very commonly used in modern
management philosophies.

The stakeholder perspective has some limitations. Most important is the difficulty in
balancing duty and purpose. There is a difference between "duty" and "purpose".
guarantee (obligation) The purpose is to be as satisfying as possible; the obligation needs
to be performed only to fulfill certain requirements. In practice, the performance of the
necessary obligations may interfere with the on the other hand, conflicts of interest can be
resolved by negotiation or conciliation, but different obligations towards different entities
cannot be easily reconciled or balanced.

b. Approaches

Most people recognize the above four groups of obligations and agree that businesses
must fulfill them. The difference in theoretical viewpoints presented in the above section
is shown specifically in the approaches to practice. There are three typical approaches: (i)
priority approach, (ii) importance approach, (iii) situational approach.

i) Priority approach

The precedence approach assumes that obligations are not the same and that they need to
be defined in a certain order in order to prioritize performance. Organizations have
certain functions and tasks, are well organized to perform them, always strive
(competitively) for the best resources, and also seek to specialize deeply in order to have
the ability to do so. the best force in completing official functions and duties. For
businesses and economic organizations, their main functions and tasks are to carry out
economic activities, use socio-economic resources and bring material and valuable
wealth (business and economic development). economic) and (spiritual) satisfaction for
society. Thus, the obligations in order of functions and tasks of the enterprise will be (1)
economic, (2) legal, (3) ethical and (4) humanitarian.
Once obligations cannot be performed simultaneously, those obligations which the
organization or company has functions and tasks to perform and is organized to have the
best performance capacity will be prioritized for implementation. In the above order, the
obligations to be fulfilled first would be economic and last would be humanitarian. For
example, businesses have a responsibility to produce as many goods and wealth as
possible for society; The treatment of environmental pollution caused by production
activities of enterprises is the responsibility of environmental management agencies of
government and non-governmental. The tax source contributed by companies as a result
of economic activities to help these organizations meet their obligations is an indirect
way of performing social obligations. Similarly, for non-economic organizations or
government agencies, the function of regulating social interests are obligations that need
to be prioritized, economic obligations are secondary.

ILLUSTRATION 2.17: COMPANY SOCIAL RESPONSIBILITIES: ACCESS IN

ORDER OF PRIORITY

This approach is typical of the classical view. Figure 2. 17 is a schematic overview of this
approach.

Although, much criticized in modern management, this approach still has some
contributions; As important as it is required to associate the assessment of an
organization, a behavior with its official function and mission, such as the image and
reputation of the Legal Family. The main limitation of these approaches is “when do
businesses or organizations feel/deem they have most fulfilled their obligations and start
performing further obligations?”