Free IGNOU MCO-24 Solved Assignment 2023-24

3. a) Draw out a clear distinction between shareholder-centric CSR and stakeholder-centric CSR?

Shareholder-Centric CSR and Stakeholder-Centric CSR epitomize divergent paradigms in a company’s approach to its social and environmental obligations. Allow me to elucidate the conspicuous disparities between the two:

Focus and Primary Responsibility:

Shareholder-Centric CSR:

In the realm of Shareholder-Centric CSR, the paramount emphasis conspicuously gravitates toward the vested interests and fiscal returns of the company’s shareholders. The apotheosis here is the maximization of profits and the augmentation of shareholder value.

The sine qua non of this paradigm lies in generating profits that accrue to the shareholders. CSR endeavors, within this framework, are viewed as instruments either to augment the company’s long-term profitability or to adhere to statutory mandates.

Stakeholder-Centric CSR:

In stark juxtaposition, Stakeholder-Centric CSR espouses a more expansive compass, orienting itself towards satiating the exigencies and anticipations of all stakeholders engaged with the enterprise, encompassing shareholders, yet by no means circumscribed to them.

Under this aegis, the enterprise accords cognizance not solely to the shareholders but also to patrons, personnel, suppliers, communities, and the environment. Its endeavor is to equipoise the vested interests of all stakeholders within its crucible of decisional calculus.


Shareholder-Centric CSR:

Within the ambit of Shareholder-Centric CSR, the impetus to embark upon CSR initiatives is inextricably tethered to the avaricious pursuit of profit maximization and the embellishment of shareholder affluence. The corporate rationale hinges on demonstrating tangible pecuniary advantages to shareholders.

Stakeholder-Centric CSR:

Contrariwise, the raison d’être for Stakeholder-Centric CSR derives its vigor from a more expansive mantle of corporate citizenship and societal responsibility. Companies operating under this rubric acknowledge their symbiotic interdependence with a plenitude of stakeholders and aspire to make a constructive societal contribution.


Shareholder-Centric CSR:

In the realm of Shareholder-Centric CSR, determinations vis-à-vis CSR invariably pivot on their potential impact on shareholder value. Here, the allure of ephemeral financial gains often assumes preeminence.

Stakeholder-Centric CSR:

Conversely, within Stakeholder-Centric CSR, CSR judgments are predicated upon a holistic consideration of the predilections and apprehensions of all stakeholders. Here, the lodestar is the long-term sustainability of the enterprise and the augmentation of societal well-being, even if such a pursuit necessitates the sacrifice of near-term profits.

Measuring Success:

Shareholder-Centric CSR:

Success metrics in the realm of Shareholder-Centric CSR are inextricably enmeshed with financial performance, return on investment, and shareholder dividends. The yardsticks predominantly assume a financial tenor.

Stakeholder-Centric CSR:

In contrast, within the precincts of Stakeholder-Centric CSR, success is gauged through an amalgamation of financial benchmarks and non-financial gauges. These encompass the ecological imprint, the well-being of employees, the development of communities, and the contentment of customers.

Time Horizon:

Shareholder-Centric CSR:

Time horizon considerations within Shareholder-Centric CSR typically skew towards the short to medium term, with a discernible focus on immediate financial outcomes and returns to shareholders.

Stakeholder-Centric CSR:

In the sphere of Stakeholder-Centric CSR, the temporal purview extends to the protracted sustainability of the enterprise and its capacity to engender value for all stakeholders over an extended epoch.

To encapsulate, the cardinal demarcation between Shareholder-Centric CSR and Stakeholder-Centric CSR lies in their primary focal points, motivating impetuses, decisional criteria, and criteria for measuring triumph. Shareholder-Centric CSR accentuates shareholders and fiscal gains, while Stakeholder-Centric CSR embraces a more holistic approach, scrutinizing the interests of all stakeholders in the crucible of its commercial determinations.

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