Final answer:
Shareholders are people who own shares of a company and focus on profit maximization. Stakeholders include a broader group affected by the company's operations. The debate on social responsibility encompasses both shareholders' financial interests and stakeholders' broader societal interests.
Step-by-step explanation:
Within the profit realm of social responsibility, people often refer to shareholders and stakeholders. Shareholders are individuals or entities that own shares of a corporation and have invested capital in the company. They are mainly concerned with receiving a positive return on their investment and expect the company to prioritize making profits. Milton Friedman was a proponent of this approach, arguing that the social responsibility of a business is to increase its profits and thus benefit the shareholders. On the other side, stakeholders refer to a broader group which includes not only shareholders but also employees, customers, communities, and others affected by the business's operations. Stakeholder theory contends that corporations should balance the interests of all stakeholders rather than focusing solely on profit maximization for shareholders.
It is argued that corporations, while pursuing their primary goal of ensuring company health and profits, have a fiduciary obligation to maximize profit for their shareholders. This legal duty is taken very seriously, with any failure potentially resulting in legal action. Yet, with the rise of social responsibility, there is a growing debate on the extent to which companies also owe moral obligations to other stakeholders, which includes a wider societal scope beyond direct financial interests.