Ch 2

• CSR pyramid


  Four-part framework or definition of CSR presented by Archie Carroll in 1979: economic, legal, ethical, and discretionary (philanthropic) expectations that society has of organisations
• Responsibilities in Carroll's CSR pyramid

  • Economic
  • Legal
  • Ethical
  • Discretionary (philanthropic)
• Carroll's CSR pyramid creates a foundation that helps to characterize the nature of business' responsibilities to the society of which it is part
• Alternative pyramid of business responsibilities according to business students

  • Ethical
  • Legal
  • Economic
  • Social
  • Environmental
  • Philanthropic
• Defensive stage of CSR


  When a company is accused of behaving unethically, when consumers and/or employees are unhappy with the corporate conduct or after some actions had been taken, such as consumers and other stakeholders boycotting the company.
• Compliance stage of CSR


  Managers and leaders understand that denial will not result in rebuilding trust and fixing the reputational damage. The company then agrees to comply with laws, regulations and policies (be it external or internal).
• Managerial stage of CSR


  Companies embed societal issues in their core management processes, develop CSR departments, give large amount of money to philanthropy and communicate their efforts in corporate citizenship to their stakeholders.
• Strategic stage of CSR


  Companies integrate the societal issue into their core business strategies. They align their responsibility, sustainability and philanthropy with what they do and what their mission is.
• CSR identity


  The company's strategy, culture and values that are aligned with responsibility and sustainability.
• CSR behavior


  The ways in which a company actually behaves towards its various stakeholders, both external and internal.
• CSR engagement matrix

  • Low social responsibility
  • Identity-based social responsibility
  • Behavior-based social responsibility
  • Entwined social responsibility
• Creating shared value (CSV)


  A shift away from CSR that is focused on philanthropy and is a sideshow. It creates financial and social value at the same time by making a positive change in society through creating innovative products and new markets.
• Three key ways for creating shared value

  • Redefining productivity in the value chain
  • Reconceiving products and markets
  • Enabling local cluster development
• Strategic CSR


  The incorporation of a holistic CSR perspective within a firm's strategic planning and core operations so that the firm is managed in the interest of a broad set of stakeholders to achieve maximum economic and social value over the medium to long term.
• Six components of strategic CSR


  • Holistic perspective
  • Strategic planning
  • Core operations
  • Broad set of stakeholders
  • Maximum economic and social value
  • Medium to long term
• Criticisms of the CSR Pyramid

  1. Hierarchy
  2. Philanthropy not sustainability
  3. Overlap
  4. Tensions
  5. Culture and ethical relativism
• Simon Zadek, 2004

  Offered a different CSR Pyramid with 5 stages: Defensive, Compliance, Managerial, Strategic and Civil.
• Defensive stage

  When a company is accused of behaving unethically.
• Compliance stage

  Managers and Leaders understand that denial will not result in revuilding trust and fixing the reputational damage.
• Managerial stage

  embedded societal issues in their core management process.
• Civil

  Inspire others to be more responsible and pave the way in becoming CSR icons.
• CSR behavior

  In which a company actually behaves toward its various stakeholders, refers to the company's strategy, culture and values that are aligned with responsibility and sustainability.
• Creating shared value

  It is not about making money and then giving money to charity, but rather about making a positive change in society through creating innovative products and new markets.
• Porter and Kramer suggested 3 ways for creating shared value.
• Redifining productivity in the value chain.

  • Improve resource efficiency in the supply chain and reduce operation cost and negative imlact.
• Reconceiving product and market

  • Increase revenue with improved products.
• Enabling local cluster development.

  • Activate supply chain to enable growth and productivity, work with various stakeholder to create an impact.