BUSINESS AND SOCIETY ETHICS
SUSTAINABILITY AND STAKEHOLDER
MANAGEMENT REVISION HANDBOOK 2026
SUSTAINABLE BUSINESS PRACTICES AND
GOVERNANCE
◉ Social Entrepreneurship.
Answer: When a person identifies a social need and uses
entrepreneurial skills to solve it — creating social value, not
economic value.
◉ Bottom of the Pyramid.
Answer: The ~4 billion people earning less than $2.50/day — an
underserved market AND a social responsibility opportunity.
◉ Microfinance.
Answer: Small loans to low-income people who can't access
traditional banks — enables entrepreneurship at the base of society.
◉ Corporate Social Responsibility (CSR).
Answer: Firms have obligations to society beyond owners and the
law — may require forgoing some profits for the greater good.
, ◉ Corporate Social Performance.
Answer: How much a firm actually responds to stakeholder
demands for responsible behavior — the action behind the CSR talk.
◉ Stockholder View.
Answer: Business is responsible ONLY to its owners — maximize
shareholder return, nothing else.
◉ Stakeholder View.
Answer: Business is responsible to ALL groups affected by its actions
— employees, community, environment, not just shareholders.
◉ Principal-Agent Problem.
Answer: Managers (agents) act in their own interest rather than
shareholders' (principals) interest — a key argument AGAINST CSR.
◉ B Corporation.
Answer: A "benefit corporation" that legally blends social objectives
with financial goals — certified by B Lab nonprofit.
◉ CSR Origins.
SUSTAINABILITY AND STAKEHOLDER
MANAGEMENT REVISION HANDBOOK 2026
SUSTAINABLE BUSINESS PRACTICES AND
GOVERNANCE
◉ Social Entrepreneurship.
Answer: When a person identifies a social need and uses
entrepreneurial skills to solve it — creating social value, not
economic value.
◉ Bottom of the Pyramid.
Answer: The ~4 billion people earning less than $2.50/day — an
underserved market AND a social responsibility opportunity.
◉ Microfinance.
Answer: Small loans to low-income people who can't access
traditional banks — enables entrepreneurship at the base of society.
◉ Corporate Social Responsibility (CSR).
Answer: Firms have obligations to society beyond owners and the
law — may require forgoing some profits for the greater good.
, ◉ Corporate Social Performance.
Answer: How much a firm actually responds to stakeholder
demands for responsible behavior — the action behind the CSR talk.
◉ Stockholder View.
Answer: Business is responsible ONLY to its owners — maximize
shareholder return, nothing else.
◉ Stakeholder View.
Answer: Business is responsible to ALL groups affected by its actions
— employees, community, environment, not just shareholders.
◉ Principal-Agent Problem.
Answer: Managers (agents) act in their own interest rather than
shareholders' (principals) interest — a key argument AGAINST CSR.
◉ B Corporation.
Answer: A "benefit corporation" that legally blends social objectives
with financial goals — certified by B Lab nonprofit.
◉ CSR Origins.
