Carrol's Pyramid of Corporate Social Responsibility and Why CSR Matters
Carrol's Pyramid of CSR
Picture 2(Thacker, 2019)
Introduction
The concept of Corporate
Social Responsibility (CSR) has been a topic of debate since the 1950s.
However, it wasn’t until much later that people started understanding its
sense, importance and impact. Ease CSR, in the form that we see nowadays,
became famous after it was defined by Archie Carroll’s “Pyramid of Corporate
Social Responsibility” in 1991. Its easiness, yet ability to explain the idea
of CSR with four areas, has made the pyramid one of the most accepted corporate
concepts of CSR since. Carroll’s
the pyramid illustrates that
corporate has to fulfill responsibility at four degree – Economic, Legal,
Ethical, and Philanthropic.
Economic
Responsibility
The bottom level of the
pyramid represents a company's first responsibility, which is to be beneficial.
Without profit, the company would not be able to pay their employee, staff will
lose their jobs even before the company begins CSR activities. Being profitable
is the only way for a company to be able to remain long-term, and benefit
society. Moreover, this also means that it is a organization's duty to produce
goods and services that are wanted by the consumer, at an acceptable price.
Legal
Responsibility
The second level of the
pyramid is the company’s legal responsibility to follow the law. This is the
most important duty out of the four levels as this will show how companies
conduct their business in the marketplace. Employment laws, competition with
other companies, tax regulations, and the health and safety of staff are some
examples of the legal responsibilities an organization should stick to. Failure
to be legally responsible can be very bad for businesses.
Ethical
Responsibility
The third layer of the
pyramid is the ethical layer this is described as doing the right thing, being
fair in all positions, and also avoiding harm. An organization should not only
be following the law, but it must also do its business ethically. Unlike the
first two levels, this is something that the organization is not bound to do.
However, it is best for a company to be ethical as this not only shows to their
stakeholders that they are moral, but
people will also be comfortable purchasing goods or services from the
organization as well. Being treating dealers or employees properly,
environmentally friendly, are a few examples of being ethically responsible.
Philanthropic
Responsibility
At the top of the pyramid, hold the little space is philanthropy. The organization has long been criticized for their carbon footprint, their part in pollution, using natural resources, and ext. To counterbalance these negative, they should “give back” to the society they take from. Even though this is the higher level of CSR, it should not be taken lightly as many people would require to do business with companies that are giving back to society. Philanthropic Duty is more than just doing what is right, but it is somewhat that holds true to the organization's values, to give back to society.
Why CSR Matters
Reference
Babcock,
P. (2015). Accelerating HR’s Role in CSR and Sustainability. [online] SHRM.
Available at:
https://www.shrm.org/resourcesandtools/hr-topics/behavioral-competencies/ethical-practice/pages/hr-role-csr-sustainability.aspx
[Accessed 26 Dec. 2021].
Bank, R. (2017). Why
Corporate Social Responsibility Matters. YouTube.
Available at:
https://www.youtube.com/watch?v=p2iQ_h1mPaY&ab_channel=RegionsBank
[Accessed 26 Dec. 2021].
Business Insights - Blog. (2021). Types
of Corporate Social Responsibility to Be Aware Of. [online] Available at:
https://online.hbs.edu/blog/post/types-of-corporate-social-responsibility
[Accessed 26 Dec. 2021].
JASON
FERNANDO. (2021). Corporate Social Responsibility (CSR). [online] Available at:
https://www.investopedia.com/terms/c/corp-social-responsibility.asp [Accessed
26 Dec. 2021].
Thacker, H. (2019). Understanding the Four Levels of CSR - The CSR Journal. [online] The CSR Journal. Available at: https://thecsrjournal.in/understanding-the-four-levels-of-csr/ [Accessed 26 Dec. 2021].
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