Why should entrepreneurs be concerned with ethics or social responsibility (how an organization responds to the needs of its stakeholders)?

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pohnpei397 eNotes educator| Certified Educator

There are at least two main ways in which to answer this question.

First, we can say that entrepreneurs need to be concerned with things like corporate social responsibility because they are part of society just like everyone else.  It is not as if businesses can exist outside of a society.  Each entrepreneur who is a member of our society has a responsibility like everyone else to try to improve, or at least to maintain, our society.  Therefore, no entrepreneur ought to pursue a business that involves doing something that is harmful to society, no matter how lucrative that business might be.

Second, we can say that entrepreneurs should be concerned with corporate social responsibility for more pragmatic reasons.  Corporations need, of course, to sell the goods and services that they produce.  In order to sell, they need to be able to attract customers.  There are many customers who will prefer to buy form companies that practice corporate social responsibility.  They do not want to feel as if their money is going to fund a company that acts in ways that are detrimental to society.  Thus, engaging in ethical and socially responsible ways can help an entrepreneur economically.

This means that entrepreneurs should be ethical and responsible both for their own economic good and for the good of the society of which they are a part.