The Pyramid of Corporate Social Responsibility

There are four kinds of social responsibility; economic, legal, ethical and philanthropic
that can be depicted in a pyramid. Carroll contends that all o these
responsibilities have always existed to some degree, but ethical and
philanthropic responsibilities have only become significant in recent years.
Although the components are not mutually exclusive, it “helps the manager to
see that different types of obligations are in a constant tension with one
another.” Economic responsibilities relate to business’s provision of goods and
services in society. Profits result from the activity and are necessary for any
other responsibilities to be carried out. It is assumed that corporations will
be as profitable as possible, maintain a strong competitive position and
maintain a high level of operating efficiency.

Society expects business to laws and regulations, formulated by governments
that act as the ground rules under which business must operate. Corporations
are expected to pursue profits within the frame work of the law, which
establishes what are considered fair operations. Society expects that all goods
and services ad relationships with stakeholders will meet at least minimal
legal requirements. Ethical responsibilities include those activities that are
not expected or prohibited by society as economic or legal responsibilities.
Standards, norms, or expectations that reflect concern for select stakeholder
input is fair, just, or in keeping with their moral rights. Ethics or values
may be reflected in laws or regulations, but ethical responsibilities are seen
as embracing the emerging values and norms that society expects of business
even if not required by law presently. Philanthropic responsibilities involve
being a good corporate citizen and include active participation in acts or
programs to promote human welfare or goodwill. Examples are contributions to
the arts, charities and education.