Two opposing theories of corporate social responsibility (CSR), shareholder value theory and stakeholder theory, offer several methods for how companies should address their social and ethical obligations.

The theory of shareholder value (SVT)

According to the shareholder value theory, commonly referred to as the shareholder primacy model, a corporation's top priority should be to maximize shareholder wealth. According to this perspective, a company's main goal is to make money so that its owners, or shareholders, can buy more stock. SVT's salient attributes include:

• Profit maximization: The main goal is to increase profits and provide shareholders with the best possible returns.
• Legal and Ethical Boundaries: According to SVT, a firm has fulfilled its social obligation if it acts within the confines of the law and upholds fundamental ethical standards.
• Limited CSR Engagement: CSR initiatives are frequently viewed under SVT as a way to improve the company's reputation and, in turn, its financial performance. The focus is on initiatives that primarily serve shareholders.

Theory of Stakeholders:

According to the stakeholder theory, a firm is responsible for more than simply its shareholders. It asserts that a company should take into account the needs and interests of all of its stakeholders, including shareholders as well as employees, clients, suppliers, communities, and the environment. Stakeholder Theory's salient characteristics include:

• Multiple Stakeholders: Recognizes that a variety of stakeholders have an impact on and are impacted by businesses, and that it is crucial to balance their interests.
• Long -term Perspective : Stakeholder Theory frequently emphasizes a company's long-term viability, contending that looking after all stakeholders helps the business succeed as a whole.
• Ethics: This perspective is based on ethical ideas and values, and CSR efforts may go beyond what is required by law.
• Social and environmental responsibility: Businesses that adhere to the stakeholder theory frequently take part in CSR activities that address, among other things, community development, employee well-being, and environmental sustainability.

In conclusion, the Shareholder Value Theory prioritizes maximizing shareholder wealth, and CSR initiatives are frequently seen as a way to indirectly increase shareholder value. Stakeholder Theory contends, in contrast, that companies should take into account and balance the interests of all stakeholders, not just shareholders, and participate in CSR initiatives that advance the welfare of a wider range of constituents. Based on a company's ideals, leadership's vision, and understanding of the wider societal impact of its operations, one of these two viewpoints should be chosen. Today, many companies strive to achieve long-term sustainability and profitability while upholding their social and ethical obligations. To do this, they must create a balance between these two ideologies.