Corporations Have Social Obligations Beyond "Playing by the Rules" of the Market and Serving Stockholder's Interests

The main issue behind corporations being reluctant to involve themselves in anything beyond the immediate scope of their operational responsibilities is, of course, money. Spending on projects and activities not immediately within the corporation's scope of operations lowers the profit margins, thus reducing the corporation's value with its stockholders. This goes against the first definition of Friedman's stockholder theory, which states that the foremost social responsibility of the corporation is to increase its profits. The same theory, however, emphasizes the importance of approaching the achievement of high profit margins from the long-term rather than short-term position, which brings in Freeman's stakeholder theory and shows that, to be successful, corporation must have certain responsibilities to the environment - both social and physical - within which it operates.