L13 - CSR Pyramid

What are the four layers of the CSR Pyramid?

Economic Responsibilities: Be profitable.

Legal Responsibilities: Obey the law.

Ethical Responsibilities: Do what is right, just, and fair.

Philanthropic Responsibilities: Be a good corporate citizen.
Example: A company donating to local charities after meeting its financial goals.

Why is the CSR Pyramid structured hierarchically?

It reflects the priority businesses often place on profitability first, followed by legal, ethical, and finally philanthropic concerns.
Example: A corporation ensuring financial stability before engaging in charitable activities.

What is Reputation Management in CSR?

Efforts to enhance a corporation’s image and good name through public relations, crisis management, and media engagement.
Example: A company responding to a PR crisis with transparency to maintain trust.

Why is reputation management important for businesses?

It improves financial performance, competitive positioning, and public approval.
Example: An airline addressing a passenger issue promptly to prevent negative media coverage.

What is Social Impact Management?

Managing the intersection between business needs and societal concerns, recognizing the interdependency between financial success and social responsibility.
Example: A tech company ensuring data privacy to maintain customer trust.

How is Social Impact Management bi-directional?

It addresses both how business operations impact society and how societal concerns affect business practices.
Example: A retail brand considering both customer demands for sustainable fashion and the environmental impact of its supply chain.

What does it mean for a company to practice Corporate Citizenship?

Actively participating in social and community efforts, demonstrating responsibility beyond profit generation.
Example: A corporation funding educational programs in the communities where it operates

How can Corporate Citizenship benefit a business?

Builds brand loyalty, improves public perception, and fosters stronger community relationships.
Example: Sponsoring local events to enhance brand visibility.

What are the typical attitudes businesses may have towards CSR?

Neglect: Ignoring CSR entirely.

Lip-Service: Minimal efforts to appear responsible.

Compliance: Meeting basic legal requirements.

Proactive Engagement: Actively advocating for social responsibility.
Example: A company publishing a sustainability report as a genuine commitment versus just for marketing.

Why might some businesses adopt a minimal or passive approach to CSR?

Perceived high costs, lack of immediate financial return, or belief that CSR is not their responsibility.
Example: A manufacturing company choosing not to invest in cleaner technology due to high initial costs.

How can adopting a strong CSR strategy benefit a company?

Enhances reputation, builds consumer trust, attracts talent, and may improve long-term profitability.
Example: A cosmetics brand using cruelty-free ingredients to appeal to ethical consumers.

What challenges might a company face when implementing CSR?

Balancing profit with ethical practices, measuring social impact, and avoiding accusations of "greenwashing."
Example: A fast-fashion brand promoting sustainability while still using exploitative labor practices.

How might a business face a conflict between profitability and CSR?

Profit-driven decisions might contradict ethical responsibilities, such as cutting costs by using non-recyclable materials.
Example: A restaurant choosing between affordable packaging and eco-friendly alternatives.

What strategies can businesses use to integrate CSR without sacrificing profitability?

Implementing cost-saving sustainable practices.

Building CSR into brand identity to attract conscious consumers.

Example: An energy company investing in solar technology to reduce long-term operating costs.