Carrol's CSR Pyramid

• What is Carroll's Pyramid of CSR?

  A model that shows the four levels of responsibility businesses should fulfill to be socially responsible
• What are the four layers of Carroll's Pyramid of CSR?

  1. Economic Responsibilties
  2. Legal Responsibilities
  3. Ethical Responsibilities
  4. Philanthropic Responsibilities
• What does it mean by economic responsibilities?

  Be profitable
• Why is economic responsibilities important to a business?

  Profit allows the business to pay wages, invest, and meet all other responsibilities
• Why is legal responsibilities important?

  Society expects businesses to operate within laws (e.g. employment laws, health and safety, consumer protection)
• What does legal responsibilities include?

  • Paying taxes
  • Complying with regulations (e.g. minimum wage)
• How does legal responsibilities affect HR?

  HR must comply with employment laws
• How does legal responsibilities affect marketing?

  Marketing must not mislead and be culturally appropriate
• How does legal responsibilities affect operations?

  Operations must meet health/safety standards
• What is included in ethical responsibilities?

  • Fair treatment of employees (e.g. equal pay)
  • Avoiding harmful ingredients even if legal
• How does being ethical have a strategic impact on a business?

  • Builds long-term reputation
  • Build customer loyalty
  • Improves employee motivation
• What is an example of a strategic decision that allows the business to meet its ethical responsibilities?

  Avoids suppliers with poor working conditions
• What is an example of a strategic decision that allows the business to meet its philanthropic responsibilities?

  Sponsor local charities or events
• What does it mean by philanthropic responsibilities?

  Charitable giving and community service
• Are ethical responsibilities required by law?

  No
• Are philanthropic responsibilities required by law?

  No
• What are examples of philanthropic responsibilities?

  • Charitable donations
  • Community projects
  • Sponsorships
• What are the strategic benefits of meeting the philanthropic responsibilities?

  • CSR marketing
  • Enhances brand image
  • Build consumer trust
• Big corporations (like Unilever, Tesco) often try to operate at all four levels, especially to gain consumer trust and investor appeal
• Smaller busineesses might only focus on economic and legal responsibilities until they grow
• Carroll's Pyramid supports the stakeholder view - doing more than just making profit
• What are the advantages of Carroll's Pyramid of CSR?

  • Useful to check how socially responsible a firm is
  • Enhances a business's reputation if the business follows it
• What are the disadvantages of Carroll's Pyramid of CSR?

  • Not all businesses follow the order - some start with philanthopy for image but ignore ethics or legal duties
  • Carroll assumes all businesses want to act responsibly - not always true