英语论文网

ptual foundation remained unaltered. This theory has two major limitations; the first one is the separation between businesses and society. Business is related to economy whereas, social responsibility is considered a constrain. The second limitation of this theory is that the CSP model is not ethical instead, it has more social expectation.

Fiduciary Capitalism Theory
This theory leads to the shareholder's value oriented management theory. This theory explains that the sole motto of business is to earn profit for their shareholders and to increase the company's economic value. The organisation should take up only those social goals that will result in the maximisation of the shareholders' wealth. This theory is based on the traditional neoclassical economic theory that regarded maximisation of shareholders wealth as the primary concern. Milton Friedman was the representative of this model. He said that the only responsibility of any business is to maximize shareholders' profit. He claimed that social responsibility is purely a socialism concept. This theory represented that managers are just a representative of the shareholders whose only obligation is to maximise the shareholders' capital (Friedman, M, 1970, p. 32-33, 122, 126).

'Shareholder value-oriented' concept was popular in many business schools during the last decades. As per this concept, the owner was considered as the principal and the managers were considered agents. The managers perform their duty towards the principal and in response to that they receive massive incentives (Jensen & Meckling, 1976, p. 305-360).

In the present scenario it has been accepted that shareholders are often benefited when companies perform their responsibility towards the society through CSR. Jensen (2000) gave 'enlightened value maximisation' which specified the long term value maximisation of the firm. This allowed a trade-off between social responsibility and profit maximisation of shareholders (Jensen, 2000, P. 235-256).

Burke and Logsdon (1996), suggested 'Strategic Corporate Social Responsibility' (SCSR) that proposed those policies and programs that resulted into sustainable business and supported core business activities and completion of its business mission. Later on an ideal level of CSR was derived utilizing cost-benefit analysis and other factors those are vital for both the firm and the society (McWilliams& Siegel, 200, p. 117-127).

It has been found that the fiduciary capitalism theory has its roots in the seventh century. John Locke, a British philosopher had written a lot on this matter and introduced three main rights, which are:

The right to live

The right to private property

The right to freedom

This theory considers a corporation as an artificial person who has been created through law, so this person has certain duties and right. In the neoclassical literature, a firm was considered 'a nexus of contracts' (Melé, 2006, p. 6). The contact indicates relation between principal and agent (Jensen & Meckling, 1976, p. 305-360).

It can be concluded that this theory is a reflector of the society and presents the contracts between buyers and sellers. This made it clear that business is a private activity that is bounded by government's regulations. It has solely one responsibility and that is earning profit for its sta