The document describes Carroll's Pyramid of Corporate Social Responsibility, which depicts CSR as having four levels or types of responsibilities: economic, legal, ethical, and philanthropic. The pyramid establishes that economic responsibilities form the base as they are fundamental to business survival. Legal responsibilities are second as businesses must obey all laws. Ethical responsibilities are third and require businesses to do what is right and avoid harm. Philanthropic responsibilities are at the top as businesses are expected to contribute resources to improve their communities. The pyramid is meant to help companies balance these tensions and meet their various responsibilities holistically in their decisions.

1. Carroll’s Pyramid of Social
Responsibility
Lesson 09

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.

4. 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.

5. 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.

6. 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.

7. 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.

8. 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)

9. Level 1
ECONOMIC
Responsibilities
Be profitable
The foundation upon which all other levels
rest

10. 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.

11. Level 2
LEGAL
Responsibilities
Obey the Law
Law is society’s codification of right
and wrong; Play by the rules

12. 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.

13. Level 3
ETHICAL
Responsibilities
Be Ethical
Obligation to do what is right, just
and fair; Avoid harm.

14. 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.

15. Level 4
PHILANTHROPIC
Responsibilities
Be a Good Corporate Citizen
Contribute resources to the
community; improve quality of life

16. 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’.

17. 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.

18. Thank You….!