Carroll's CSR Pyramid

What is Corporate Social Responsibility (CSR)?

  • The extent to which a business addresses the concerns and obligations of its wider stakeholders

  • The actions a business takes over and above the minimum required by law in addressing societal needs and wants

The Traditional View- Friedman:

  • The social responsibility of businesses is to increase profit…

Archie Carroll’s View:

  • Profit is important, but businesses have a wider purpose and social responsibility

Carroll’s CSR Pyramid- The Four ‘Responsibilities’ of Businesses:

  1. Economic

  2. Legal

  3. Ethical

  4. Philanthropic

The 4 responsibilities in Carroll’s Pyramid:

  • Economic:

    • Responsibility of business to be profitable

    • The only way to survive and benefit society in long-term

  • Legal:

    • Responsibility to obey laws and other regulations

    • E.g. Employment, Competition, Health and Safety

  • Ethical:

    • Responsibility to act morally and ethically

    • Go beyond the narrow requirements of the law

    • E.g. Treatment of suppliers and employees

  • Philanthropic:

    • Responsibility to give back to society

    • Discretionary but still important

    • E.g. charitable donations, staff time on projects

Strength of CSR:

  • Easy to understand

  • Simply message- CSR has more than one element

  • Emphasises the importance of profit

Weaknesses of CSR:

  • Should ethics be at the top?

  • Businesses don’t always do what they claim when it comes to CSR