This document discusses corporate social responsibility (CSR) and defines it as a business's commitment to operate in an economically, socially, and environmentally sustainable manner. It presents definitions of CSR from various organizations and scholars. It also outlines Carroll's pyramid of CSR, which categorizes a business's responsibilities as economic, legal, ethical, and discretionary/philanthropic. The document further discusses models of CSR and links it to corporate governance, stating that CSR refers to how companies manage their impacts on stakeholders beyond legal obligations.

1. CORPORATE SOCIAL
RESPONSIBILITY
DAC 204: PRINCIPLES OF INTERNAL CONTROLS
AND CORPORATE GOVERNANCE

2. Definitions
• World Business Council for Sustainable
Development (2016) define corporate social
Responsibility as the continuing commitment by
business to contribute to economic development
while improving the quality of life of the workforce
and their families as well as of the community and
society at large.
• Achieving commercial success in ways that honor
ethical values and respect people, communities,
and the natural environment. (White, 2006)

3. 3
Archie B. Carroll, 1979
“The social responsibility of business
encompasses the economic, legal, ethical,
and discretionary expectations that
society has of organizations at a given
point in time.”

4. • CSR is a process by which an organization
thinks about and evolves its relationships with
stakeholders for the common good and
demonstrates its commitment in this regard
by adoption of appropriate business processes
and strategies. Thus, CSR is no charity or mere
donations.

5. • CSR is a way of conducting business, by which
corporate entities visibly contribute to the
social good. Socially responsible companies
use CSR to integrate economic, environmental
and social objectives with the company’s
operations and growth.

6. • The continuing commitment by business to
behave ethically and contribute to sustainable
economic development while improving the
quality of life of the workforce and their
families as well as of the local community and
society (World Business Council for
Sustainable Development).

7. The Pyramid of CSR
Economic
Responsibilities
Legal
Responsibilities
Discretionary
Responsibilities
Ethical
Responsibilities
to produce acceptable
returns on investments
to act within legal
framework
to do no harm
to its
stakeholders/
environment
to benefit the firm & society
more proactive & strategic
Source: Archie B. Carroll, (1991) The Pyramid of Corporate Social Responsibility
Lesson One | Introduction

8. Corporate Governance and its link to CSR
• Corporate Social Responsibility refers to
organizations considering and managing their
impact on a variety of stakeholders.
• Organizations are not simply independent units
operating in isolation to make money for
shareholders and achieve their overall
objectives. Companies have other stakeholders
among them employees, suppliers, customers
and the local community.

9. CG and its link to CSR cont’d
• Corporate governance is all about how an
organization is governed in pursuit of its
objectives.
• Corporate social responsibility is all about how
a company will manage the impact of their
operations on the economy, society and the
environment over and above the
requirements imposed by regulation.

10. Models of Corporate Social
Responsibility
• Friedman Model
• Ackerman Model
• Carroll Model
• Environmental Integrity and Community
Model
• Corporate citizenship Model
• Stockholders and Stakeholders Model
• New Model of CSR

11. Friedman Model (1962-3)
• • A businessmen should perform his duty well,
he is performing a social as well as a moral
duty.
• • A businessmen has no other social
responsibility to perform except to serve his
shareholders & stockholders.

12. Ackerman Model (1976)
• The model has emphasized on the internal
policy goals & their relation to the CSR.
• Four stages involved in CSR.
– Managers of the company get to know the most common
social problem & then express a willingness to take a
particular project which will solve some social problems.
– Intensive study of the problem by hiring experts & getting
their suggestions to make it operational.
– Managers take up the project actively & work hard.
– Evaluating of the project by addressing the issues.

13. Carroll Model(1991)

14. Arguments Against Corporate Social Responsibility
• Classical Economics: The classical economic view
is that business’s only goal is the maximizing of
profits for owners.
• Business Not Equipped: Business is not equipped
to handle social activities.
• Dilutes Business Purpose: It dilutes the primary
purpose of business.
• Too Much Power Already: Businesses have too
much power already.
• Global Competitiveness: It limits the ability to
compete in a global marketplace.

15. Corporate Social Responsibility theories
• Stakeholder theory
• Legitimacy theory
• Political economy theory
• Business ethics theory

16. Exercise:
• Discuss arguments for and against CSR, state
which argument that you find most persuasive
and why.
• Discuss the any three theories of CSR in the
following format.
– Paragraph 1: Proponents of the theory and what
the theory states or its proposition.
– Paragraph 2: Arguments for and against the
theory

17. Thank You