CORPORATE RESPONSIBILITY & INCLUSION Patsy Doerr Global Head, Corporate Responsibility & Inclusion.
The pyramid of corporate social responsibility
18
Carroll’s Pyramid of Carroll’s Pyramid of Social Responsibility Social Responsibility Lesson 09
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Transcript of The pyramid of corporate social responsibility
Carroll’s Pyramid of Social Carroll’s Pyramid of Social ResponsibilityResponsibility
Lesson 09
The Pyramid of Corporate The Pyramid of Corporate Social ResponsibilitySocial ResponsibilityThe Pyramid of Corporate Social
Responsibility is a graphic depicting the four-part definition of CSR that envisions a pyramid composed of four layers.
Economic Economic ResponsibilitiesResponsibilities 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.
Legal Legal ResponsibilitiesResponsibilities 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.
Ethical Ethical ResponsibilitiesResponsibilitiesThis 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.
Philanthropic Philanthropic ResponsibilitiesResponsibilitiesBusiness 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.
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)
The Pyramid of Social Responsibility
Level 1 Level 1 ECONOMICECONOMIC
ResponsibilitiesBe profitableThe foundation upon which all other levels rest
Economic ComponentsEconomic 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.
Level 2 LEGAL
ResponsibilitiesObey the Law
Law is society’s codification of right and wrong; Play by the rules
Legal ComponentsLegal 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.
Level 3 ETHICAL
ResponsibilitiesBe Ethical
Obligation to do what is right, just and fair; Avoid harm.
Ethical ComponentsEthical 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.
Level 4 PHILANTHROPIC
ResponsibilitiesBe a Good Corporate Citizen
Contribute resources to the community; improve quality of life
Philanthropic Philanthropic ComponentsComponents 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’.
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.
Thank You….!
