BSB250 · Business Citizenship
The Social Purpose of Business & the UN SDGs
This chapter is the normative core of BSB250: what a business owes beyond making money. You learn to frame the shareholder-vs-stakeholder pendulum (Friedman vs Freeman), organise responsibility with Carroll's CSR pyramid, decide fair outcomes through distributive justice (Utilitarian, Rawls, Nozick), and critique the UN's 17 SDGs as a rights-based framework. In the open-book final it is exam-core short-response territory, where marks come from naming the position, naming the lens, and taking a defensible stand — not from cheerleading.
What this chapter covers
- 01Corporate social responsibility (CSR) and the shareholder-vs-stakeholder pendulum
- 02Carroll's CSR pyramid: economic / legal / ethical / philanthropic
- 03Stakeholder theory (Freeman) and the Mendelow power/interest grid
- 04Justice dimensions: procedural, corrective, distributive
- 05Four distributive concepts: fairness, equality, desert, fundamental rights
- 06Three justice traditions: Utilitarian, Rawls, Nozick
- 07The 17 UN SDGs as a rights-based / deontological framework
- 08Three SDG lenses (Friedman / Freeman / CSV) and the three exam critiques
WE-SP · Is an SDG claim genuine commitment or SDG-washing?
- +2Position the lenses: Friedman (shareholder) would back the SDG push only where it is profitable; Freeman (stakeholder) treats it as part of purpose because the firm already answers to workers and community; Porter & Kramer's Creating Shared Value (CSV) targets the overlap where business and social value converge.
- +2Run the three critiques of the SDG framework: (1) UN legitimacy — is the standard-setter accountable? (2) Conceptual vagueness — "decent work" is undefined, so the claim is hard to falsify, opening the door to SDG-washing; reporting frameworks (GRI, SASB, Science-Based Targets) partly close this gap. (3) Goal conflict — cheaper responsible sourcing may clash with growth or price.
- +1Note the decision-maker constraints: measurement and attribution (did the firm actually move the needle?), the verification problem, market and competitive pressure, fiduciary duty to shareholders, and long SDG time horizons.
- +1Take a defensible stand: the announcement is neither automatically genuine nor automatically washing — judge it by verifiable, framework-anchored evidence of change (e.g. audited GRI metrics), read through whichever lens the facts support.
Key terms
- Corporate social responsibility (CSR)
- The umbrella idea that a business is accountable not only to its owners but to the wider society it operates within, balancing profit against social and environmental obligations.
- Shareholder primacy (Friedman 1970)
- The view that the firm exists to maximise returns to its owners; managers are agents of shareholders and ‘the social responsibility of business is to increase its profits’ within the rules of the game.
- Stakeholder theory (Freeman)
- The view that a business has obligations to all who affect or are affected by it — employees, customers, suppliers, community and environment — not owners alone, because long-run value is created by serving this wider set.
- Distributive justice
- The primary justice focus in BSB250: a fair allocation of the benefits and burdens a business creates, assessed against fairness, equality, desert and fundamental rights.
- Rawls' difference principle
- Principles chosen behind a ‘veil of ignorance’; inequalities are just only if they benefit the least advantaged, alongside inviolable basic liberties for all.
- UN Sustainable Development Goals (SDGs)
- Seventeen goals (169 targets) adopted in 2015 with a 2030 target — a rights-based / deontological global-distributive-justice framework on three pillars (social, economic, environmental) under ‘leave no one behind’.
The Social Purpose of Business & the UN SDGs FAQ
What is the difference between shareholder and stakeholder views of business?
Shareholder primacy (Friedman) says the firm's only social responsibility is to lawfully maximise owner returns. Stakeholder theory (Freeman) says the firm owes obligations to everyone who affects or is affected by it — employees, customers, suppliers, community, environment — because serving them creates long-run value. BSB250 treats ‘business purpose’ as a contested pendulum that has swung back and forth since the 1970s.
How do I answer an SDG exam question in BSB250?
Use the decoder: (1) say what the SDGs are (rights-based / deontological, 17 goals, adopted 2015 with a 2030 target, three pillars); (2) place the firm on the pendulum via the three lenses — Friedman, Freeman, Porter & Kramer's CSV; (3) deploy the three critiques — UN legitimacy, conceptual vagueness (→ SDG-washing), goal conflict; (4) add decision-maker constraints; (5) take a defensible stand.
What are the three traditions of distributive justice and how do they differ?
Utilitarian justice asks whether total welfare is maximised. Rawls asks whether the outcome protects the least advantaged and basic liberties (the difference principle, chosen behind a veil of ignorance). Nozick's entitlement theory asks whether the holdings arose justly — just acquisition then voluntary transfer — regardless of the resulting pattern. The same facts can be just to one tradition and unjust to another.
What is SDG-washing?
SDG-washing is the SDG cousin of greenwashing: a firm claims alignment with the SDGs without real change. It is enabled by the conceptual vagueness of terms like ‘decent work’, which makes claims hard to verify. Standardised reporting frameworks — GRI, SASB, Science-Based Targets — exist to make such claims measurable and comparable.
Is Carroll's CSR pyramid the main model in BSB250?
No — Carroll's pyramid (economic, legal, ethical, philanthropic) is a useful supporting structure for organising tiers of responsibility, but the unit's primary frame is the shareholder-vs-stakeholder pendulum plus a justice analysis. Naming the pyramid alone is a thin answer; lead with the pendulum and justice, then optionally use Carroll to organise the tiers.
Exam move
Treat every social-purpose question as a five-step rail rather than an essay to improvise. First name the position on the pendulum (Friedman shareholder vs Freeman stakeholder) and, if asked who the firm answers to, draw a quick Mendelow grid. Then convert the distribution question into a justice analysis: lead with distributive justice, flag which of fairness / equality / desert / rights are in tension on the facts, and run the right tradition (Utilitarian, Rawls, Nozick) rather than collapsing them into ‘be fair’. For SDG prompts, memorise the decoder — what the SDGs are, the three lenses (incl. CSV), the three critiques (UN legitimacy, vagueness → SDG-washing, goal conflict), and the decision-maker constraints. Because the final is open-book, your edge is not recall but speed: keep a one-page map of the pendulum dates, the four distributive concepts, the three traditions' tests, and the SDG decoder, then always close by taking a defensible stand — the marks reward reasoned commitment, not neutrality.
