A question of central interest here is, how can corporations formulate socially responsible strategies? How can companies assure that corporate domain choice strategies and competitive strategies are responsive to social needs and do not harm the public interest? There are two basic approaches to dealing with these questions.
First is to evaluate the social merits of each corporate and business strategy selected based on financial, technological, and market criteria. For each strategy, one could ask these questions: What social good does the strategy contribute? Does the strategy create any public risks or harm? Does the strategy harm the interests of our stakeholders? How does the strategy affect public image and goodwill? Will the strategy lead us into social controversies? The answers to these questions can aid in modifying strategies to fit reasonable demands. The idea is not to abandon strategies that have even the slightest negative consequences, but to consider these consequences explicitly in an attempt to develop balanced strategies (McGuire, Lundgren, and Schneeweis, 1988).
A second approach to developing socially responsive strategies is adopting specific strategies toward all key stakeholders of the firm (Freeman, 1984). Such strategies pursue multiple stakeholder objectives rather than simple profitability objectives. They are sensitive and responsive to the demands of all constituencies that provide the organization with opportunities and resources for success. Conflicting demands of stakeholders are carefully balanced. While acknowledging that a primary responsibility of the company is to increase shareholder wealth, stakeholder strategies also must acknowledge responsibilities toward externalities – customers, suppliers, employees, business associates, communities, media, and government.
Specific stakeholder strategies and programs may be developed to meet stakeholder demands This requires listening to stakeholders, taking their needs into account, and letting their perspectives inform organizational decisions. It involves getting inputs from stakeholders, weighing them, and making decisions that are best for the whole business. It does not mean giving in to all stakeholder demands or reaching stakeholder consensus on all decisions. Stakeholder analysis begins with identification of who they are. It involves understanding their stakes in the organization, their sources of influence, and their size and power. The history of relations with stakeholders and specific organizational decisions in which the stakeholders have the greatest interest are also important considerations. Stakeholder needs and perspectives should be sought and incorporated into strategies.