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Law and Economics Analysis of Corporate Social Responsibility

Author: GongJie From: www.yourpaper.net Posted: 2009-06-21 02:44:58 Read:
Abstract: system since its inception, has been booming. However, the tradition of the Companies Act to pursue the interests of shareholders supremacy and the principle of profit maximization, which makes the company the simple pursuit of the accumulation of wealth, society brought about a series of questions. Thus, the theory of corporate social responsibility to take into account the interests of the shareholders to maximize the interests of non-shareholder stakeholders interests known, has been raised widespread concern. The necessity of the existence of the law and economics to analyze corporate social responsibility system, trying to be useful to the practitioner of corporate social responsibility.
Keywords: corporate social responsibility; law and economics analysis; system build

A corporate social responsibility theory outlined

1.1 Corporate Social Responsibility concept proposed
(1) the point of view of foreign scholars.
The term "corporate social responsibility" originated in the United States. As early as 1924, the American scholar Sheldon in his book "The Philosophy of Management" put forward the concept of "corporate social responsibility", he was responsible for linking corporate social responsibility and corporate operators meet the needs of industry inside and outside the various human that corporate social responsibility and moral factors into account. But for the specific definition of the concept of corporate social responsibility, the scholars have not yet reached a consensus. The Wickham Nepal: Corporate social responsibility is the kind of company has exceeded its owners or shareholders beyond the narrow notion of responsibility, on behalf of the whole community should bear the responsibility. The Qiong Sifu Mark Kyu That: Corporate social responsibility is the company not only bear the economic and legal obligations, but also bear the other responsibilities that go beyond these obligations.
(2) domestic scholars view.
Five new "Company Law" stipulates: companies engaged in business activities, must comply with the laws and administrative regulations, observe social ethics, business ethics, honesty and trustworthiness, accept the supervision of the government and the public commitment to social responsibility. At this point, the system of corporate social responsibility has been established in our country. But now, the legal theory defined on the concept of corporate social responsibility is inconclusive.
Mr. Liu Junhai pointed out: "The so-called corporate social responsibility is not just to maximize shareholders for-profit or money as their sole raison d'etre, but should maximize promote the interests of shareholders other than the interests of all social." Taiwan scholars Len Yu think: "Corporate social responsibility is refers to the social majority of people the hope of the company operating the particular matter, to meet the expectations and give up the business of the matter of the profit-seeking of intent." Mr. Lu Daifu think: "the company's social responsibility refers to the obligations owed to the maintenance and promotion of the interests of the community to seek to maximize profits for shareholders. "

1.2 Corporate Social Responsibility basic
(1) The ideological basis.
The end of the 19th century, the rise of social standard thinking. The legal design correction of the past too much emphasis on the personal interests while ignoring the interests of society biased Pound Garling scholars put forward any legal claims should exist for the interests of the community. In this environment, corporate social responsibility theory put forward, it is traditional Company Law shareholders profit maximization principle amended and supplemented. It will be the shareholders' interests and the interests of the community and try, emphasis on coordination between the interests of the various stakeholders in the company internal as well as between the company and the community, the pursuit of the supremacy of the interests of society as a whole. It can be said that the social standard thinking laid the social and ideological basis for the theory of corporate social responsibility.
(2) the nature of the process requirements.
From simple collaborative process arising from the company, with the capitalist mode of production to the factory handicraft, and then changes in the large-scale machine industry, the organizational form of the enterprise accordingly also experienced the enterprises owned enterprises to partner, to the evolution of the company . In the course of this development, the emergence the Statute of companies specializing in maritime trade. The historic mission of this company exists is for the government of mercantilism, thus facilitating its own nationals engaged in overseas trade activities. Shows that the company since the beginning of the formation is to serve the national primitive accumulation of capital, the company naturally bears the important task of service of the state and society.
(3) The social basis.
Under the conditions of market economy, the strength of the company is the rapid expansion has created enormous wealth and achieve penetration and expansion of various fields, but also produced a series of social problems in this process. For example: in order to chase profits while ignoring environmental pollution; provide substandard products and services, violations of consumers' rights and interests; evade taxation; exclusion of fair competition; malicious breach of contract, and a general lack of good faith. The company can not turn a blind eye to these social problems can not be profit-making as its only goal. As a social fiction, the company should take into account the interests of other social groups, bear certain social responsibilities, in order to eventually achieve the requirements of justice.

Two pairs of corporate social responsibility, there is the need for law and economics analysis

2.1 Transaction Cost Analysis
The new institutional economics, market transaction costs to the running costs of the market mechanism, that both parties through market transactions, to collect information about the negotiations, to enter into contracts and check, the cost of supervision and contract implementation. According to Coase's theory of transaction costs, the transaction costs to complete the same transaction when the transaction costs of the company's more than the other competitors, the transaction will turn done by other organizations, rational reality of economic man always by "voting with their feet "do not respect the laws of the market be eliminated. It is due to the presence of transaction costs, for its rapid development and interests, will have to consider the interests of other stakeholders, so the emphasis on the social responsibility of the company is necessary.

Game 2.2 institutional arrangements of cost-benefit analysis
The companies are willing to assume and perform relevant social responsibility, based on cost-benefit considerations weigh in the existing institutional framework of rational choice. Corporate social responsibility and not simply taken for moral or voluntary altruistic behavior, but conducting the cost - benefit analysis to make self-serving behavior. While some companies boast about its "social responsibility", but in reality is in order to get more benefits from the survival and development of the company's own point of view, it does not have power selflessly simply assume the so-called social responsibility. 2.3 Lee
assume social responsibility
(1) is conducive to the democratization of the company.
A large part of the social responsibility of the company is to emphasize the participation of trade unions and other interested parties on the decision-making and management of the company. If the system design, the role orientation, operational management fully reflects the interests and will of the company stakeholders, then the company realized that corporate democracy. Some of the world's more developed companies, such as General Motors, Haier, it attaches great importance to the establishment of good relations between the company and the employees, consumers, providing excellent service, so that more stakeholders to participate in the management of the company in the past, in order to support and optimize its own operating environment.
(2) is conducive to enhancing the company's image.
Participation in community welfare activities, which is equivalent to an invisible advertising actively solve social problems, and establish a good image in people's minds, has won the recognition of consumers and investors. This will expand the market share of the company's products, thereby enhancing their competitiveness in the market, and is conducive to the long-term profitability of the enterprise.
(3) in favor of government support.
Corporate social responsibility, a very important aspect is that in exchange for the Government's strong support. The company's social participation will help the government bail out to alleviate the pressure on the government from the public, such as reducing unemployment, easing inflationary pressures, pollution treatment. The company took on the part of the social responsibility of implementation of macroeconomic policies favorable to the government, will get the government policy tilt to support their development.

3 to strengthen the system of corporate social responsibility to build

3.1 Legal encourage policy guidance simultaneously
"Enterprise Income Tax Law Article 9 provides that an enterprise's charitable donation, less than 12 per cent of the total annual profits of the parts are allowed to be deducted in the calculation of taxable income. Deduction of three percent compared to the "Provisional Regulations on Enterprise Income Tax has been repealed, discount amount is greatly improved. However, the practice may appear to take this tax avoidance, nominally donation and not actually donate. So there is a need to strengthen its specific implementation, supervision, registration, and interested parties to accept the question.
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