9The pyramid of corporate social responsibility

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9The pyramid of corporate social responsibility

  1. 1. Carroll’s Pyramid of Social Responsibility Lesson 09
  2. 2. The Pyramid of Corporate Social Responsibility The Pyramid of Corporate Social Responsibility is a graphic depicting the four-part definition of CSR that envisions a pyramid composed of four layers.
  3. 3. Economic Responsibilities This is the responsibility to provide investors with adequate and attractive returns on their investments. Be profitable. Maximize sales, minimize costs. Make sound strategic decisions. Be attentive to dividend policy.
  4. 4. Legal Responsibilities Here, the responsibility is to obey all laws, adhere to all regulations. This included environmental and consumer laws, laws protecting employees, fulfilling all contractual obligations and honoring warranties and guarantees.
  5. 5. Ethical Responsibilities This is the obligation to do what is right, just, and fair and to avoid or minimize harm to stakeholders (employees, consumers, the environment, and others). Avoid questionable practices. Respond to spirit as well as letter of law. Assume law is a floor on behavior, operate above minimum required. Do what is right, fair, and just. Assert ethical leadership.
  6. 6. Philanthropic Responsibilities Business is expected to be a good corporate citizen—to fulfill its philanthropic responsibility to contribute financial and human resources to the community and to improve the quality of life. Provide programs supporting community—education, health/human services, culture and arts, civic. Promote and engage in volunteerism.
  7. 7. The Pyramid of Social Responsibility PHILANTHROPIC Responsibilities Be a good Corporate Citizen. Contribute resources to the community; improve quality of life. ETHICAL Responsibilities Be ethical. Obligation to do what is right, just and fair; Avoid harm. LEGAL Responsibilities Obey the Law Law is society’s codification of right and wrong; Play by the rules ECONOMIC Responsibilities Be Profitable The foundation upon which all others rest Source: Carroll (1991)
  8. 8. Level 1 ECONOMIC Responsibilities Be profitable The foundation upon which all other levels rest
  9. 9. Economic Components It is important to perform in a manner consistent with maximising earnings per share It is important to be committed to being as profitable as possible It is important to maintain a strong competitive position It is important to maintain a high level of operational efficiency It is important that a successful firm be defined as one that is consistently profitable.
  10. 10. Level 2 LEGAL Responsibilities Obey the Law Law is society’s codification of right and wrong; Play by the rules
  11. 11. Legal Components It is important to perform in a manner consistent with expectations of government and the law. It is important to comply with various national and supra-national laws and regulations. It is important to be a law-abiding corporate citizen. It is important that a successful firm be defines as one that fulfils its legal obligations. It is important to provide goods and services that at least meet the minimal legal requirements.
  12. 12. Level 3 ETHICAL Responsibilities Be Ethical Obligation to do what is right, just and fair; Avoid harm.
  13. 13. Ethical Components It is important to perform in a manner that is consistent with the expectations of societal mores and ethical norms. It is important to recognise and respect new or evolving ethical/moral norms adopted by society. It is important to prevent ethical norms from being compromised in order to achieve corporate goals. It is important that good corporate citizenship be defined as doing what is expected morally or ethically. It is important to recognise that corporate integrity and ethical behaviour go beyond mere compliance with laws and regulations.
  14. 14. Level 4 PHILANTHROPIC Responsibilities Be a Good Corporate Citizen Contribute resources to the community; improve quality of life
  15. 15. Philanthropic Components It is important to perform in a manner consistent with the philanthropic and charitable expectations of society. It is important to assist the fine and performing arts. It is important that managers and employees participate in voluntary and charitable activities within their local communities. It is important to provide assistance to public and private educational institutions. It is important to assist voluntarily those projects that enhance a community’s ‘quality of life’.
  16. 16. Different types or kinds of obligations in the pyramid are in constant and dynamic tension with one another. The most critical tensions are those involving the relationship of economics: between economic and legal, economic and ethical, and economic and philanthropic. The pyramid should not merely be seen sequentially or in its component parts, but holistically to aid the company in is decisions, actions and policies.
  17. 17. Thank You….!

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