Private Management and Public Policy

by James Post, Lee Preston



The contention that the responsibility of the corporation for social concerns arises from its own operations (primary) and their necessary consequences and impacts (secondary) in the larger society has been widely accepted and not seriously challenged. The corporate social agenda, although large and complicated, includes far fewer items and issues than the political agenda of society at large. Contemporary public policy provides the basic framework and considerable specific guidance for corporate behavior with respect to matters of social concern, but careful analysis and regular monitoring of public policy developments is required to extract the relevant insights. With respect to areas in which specific public policy is not yet clearly established or is in transition, it is legitimate and may be essential that affected firms participate openly in the policy formation. If there is in fact a contemporary crisis concerning the status of the corporation, it involves both specific business behavior in a host of situations and the basic legitimacy of the corporation as a form of social organization. The two are closely linked, and the social legitimacy of the enterprise depends now, it has in the past, on its ability to meet the performance expectations of its stakeholders.

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