Last Updated 27 Jan 2021

Carroll’s CRS Pyramid

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1. Discuss what is meant by Corporate Social Responsibility according to Carroll’s Model of CSR (Carroll’s Pyramid). Include some examples in your discussion.

Carroll’s view is that profit is significant, but business has a deeper purpose on social accountability and responsibility. He developed the Corporate social responsibility model which means when a company responsibly runs its business operations and ensures that it has a positive impact on society ethically, legally and economically.

Carroll’s CSR pyramid has four types of responsibilities, and it shows how the organization should meet their social responsibilities.

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Economic is the first responsibility: it is the business responsibility for producing goods and services needed by the community and selling them to make a profit. Companies have shareholders who invest to get something in return, they have workers who want safe and fairly paid salaries, and they have customers who demand good quality products at a decent price. A business exists to earn a profit for shareholders. If it fails, it expected won’t be able to pay its workers, taxes and other responsibilities. The first responsibility of the business is the base and the root of the pyramid. It is important for the business to be as profitable as possible because they will help them to have a strong competitive position and a high level of operational effectiveness.

Legal is the second responsibility: it is the business responsibility to make sure that they are complying the laws and policies. The community is expecting the businesses to follow all regulation and laws, honor its contracts, warranties, and guarantees. It includes environmental laws, consumers laws, laws protecting employees and labor laws, meeting all contractual commitments and honoring warranties and guarantees. Legal responsibility is important because it tells that the business is performing in a way to meet with the expectations of government and the law, it shows that the business is complying with many laws and regulations, and it shows that provide goods and services that least meet the minimal legal requirements.

Ethical is the third responsibility: it consists of what is generally expected by the community which is above economic and legal expectations. Ethical responsibilities are not necessarily should be imposed by law, but they are expected from ethical businesses by the public and governments. It is one of the businesses responsibilities to do what is right, just, and fair and to avoid or to have minimum harm to stakeholders, workers, consumers, environment, and others, and also by avoiding questionable practices. So, it’s things the community says its wrong and right that the company should follow if they want to be ethical. It is a benefit to the company to perform in a manner that is consistent with the expectations of the society norms and to recognize and consider new or evolving ethical norms adopted by the community. It is important that good business should be defined as doing what is expected morally or ethically.
Philanthropic is the fourth responsibility: businesses are expected to be a good corporate citizen—to meet its philanthropic responsibility to share financial and human resources to the society and to increase the quality of life. It includes giving back to the community by donation and ongoing support in charities and other social welfare programs. It concentrates on developing the quality of life of workers, local societies and community. Some examples, employees are going on projects for society, having or participate in programs that support society—education, wellness, and human services, culture, and creativity. Managers and workers can be part of charitable and voluntary activities within the local societies, providing support to public and private educational systems and helping voluntarily those projects that improve a society’s ‘quality of life.


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