Final answer:
The statement suggests that a firm's primary responsibility is to its shareholders or investors. This reflects the shareholder primacy concept, differing from stakeholder theory, which advocates for balancing all stakeholder interests, including community responsibilities.
Step-by-step explanation:
When evaluating the statement "before you can do good, you must do well," it reflects the idea that a firm's primary responsibility is to investors or shareholders before other stakeholder interests can be adequately considered or addressed. This aligns with the notion of shareholder primacy, which is a concept within business ethics that prioritizes the interests of shareholders over other stakeholders. Shareholders own a share of the corporation and invest capital with the expectation of a return, which means the company needs to be profitable to satisfy these interests.
However, it is important to note the difference between shareholders and stakeholders. Stakeholders include a broader range of individuals or groups affected by the business's operations, such as employees, customers, and the community. The stakeholder theory suggests that a company should balance the interests of all stakeholders, not just those of shareholders.
Social responsibility in business includes community responsibilities, which entail a duty to the community that goes beyond mere legal obligations and covers aspects such as respect, cooperation, and participation in civic activities.