• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

BA Theories (Business Administration & Management)

  • Strategy
  • Marketing
    • Global Marketing
  • International Trade
  • General Management
    • CSR, Ethics & Sustainability:
  • Useful Resources
    • Recommended Books
    • Industry & Market Research Databases
Home » Carroll’s CSR Pyramid: Understanding the Four Levels

Carroll’s CSR Pyramid: Understanding the Four Levels

February 26, 2022 by batheories Leave a Comment

Carroll CSR Pyramid
0
SHARES
ShareTweet

Carroll’s CSR pyramid is a framework that explains how organisations can take social responsibility, it highlights the four important types of responsibility of organisations.

This is one of the most well-used models used to describe and explain CSR (Carroll, 1991, in Tench and Yeomans, 2017, p.84).

According to Carroll, businesses have four levels of responsibility: economic, legal, ethical and philanthropic. Tench (2017) explains that the model can be used in conjunction with the stakeholder responsibility matrix to set out how organisations can meet their responsibilities.

The four levels of responsibilities are as follows:

  • Economic responsibility of being profitable. The company should produce good quality products and offer good services to clients. It should offer safe working environment and offer fair wages to employees. It should provide reasonable returns to investors.

    This is the only way to survive and benefit society in long-term. This forms the base of the pyramid upon which other responsibilities rest.

  • Legal responsibility of abiding by the laws set forth by society. E.g. Employment, Competition, Health & Safety

    Abide by government laws, abide by federal and state regulations. Provide goods and services that meet legal requirements.

  • Ethical responsibility of performing business operations which are morally correct. Businesses should go beyond narrow requirements of the law. E.g. Treatment of suppliers & employees.

    Conduct business ethically. Treat employees, suppliers, clients ethically. Recognize ethical/moral norms adopted by society.

  • Philanthropic or discretionary responsibility which is to contribute resources towards social, educational, recreational and/or cultural purposes. While discretionary, this responsibility is still important. E.g. charitable donations, staff time on projects.

    Engage in CSR activities (that are more aligned with business objectives). Encourage employees to volunteer for social cause. Engage in community development efforts.

There are several corporate leaders who feel that the model is too simplistic. However, the Carroll’s Pyramid is easy to use and understand. It conveys the message that CSR has more than one element to it, it lays its main emphasis on the aspect of profit generation.

Here’s an example matrix for a clothing manufacturer, using the customers as the chosen stakeholder group (Developed by Tench, 2017, p.85).

Economic: Financially well-managed company, Clear financial reporting.

Legal: Conform to consumer health and safety product guidelines (e.g. quality controls and standards for fire safety of garments, etc.) . Use Correct labelling. National and transnational product labelling eg European standards.

Ethical: Fairly priced products. Highest quality. Products are designed for and fit for purpose (eg workwear). Provide best products with the highest standards of care for employers and suppliers. Transparent sourcing of materials (no use of child labour or low-paid employees). Do not abuse suppliers or workers.

Philanthropic: Give waste products to needy organisations. Give unsold products to customers’ preferred charities or homeless groups. Support other employee or customer initiatives.

Carroll’s CSR pyramid suggests that firms should engage in practices and take responsibility at four levels – Economic, Legal, Ethical, and Philanthropic, if they really want to be seen as a responsible company. It means the company has to be economically profitable, it should adhere to all the laws of the land, it should do what is right where the law does not provide guidance, and it should engage in philanthropic work (Carroll, 2016).

A firm that shuns it philanthropic responsibilities is likely to be seen as an unethical company, and on the contrary, engaging in philanthropy will help improve the reputation of the firm.

To sum it up, Carroll’s CSR Pyramid outlines the different levels of CSR that companies can engage in. According to Carroll, firms must first fulfill their economic responsibilities before moving on to the other levels of responsibility. Businesses use this model to evaluate their CSR efforts, and to ensure that they are meeting their social obligations as corporate citizens.

References

Carroll, A.B., 2016. Carroll’s pyramid of CSR: taking another look. International journal of corporate social responsibility, 1(1), pp.1-8.

batheories
batheories

BATheories.com is managed by a group of educators from Mumbai. We also manage the website StudyMumbai.com. Our panel includes experienced professionals and lecturers with a background in management. BATheories is where we talk about the various business theories and models for BA (Business Administration) students.

Related Posts:

  • 3 Levels of Strategy
  • Economic Integration: Various Levels Explained
  • Bottom of the Pyramid (BOP) Markets
  • Bottom of Pyramid (BOP) Markets & doing Business in…
  • Corporate Social Responsibility (CSR)
  • Understanding Consumer Culture: Theory and Definition
0
SHARES
ShareTweet

Filed Under: CSR, Ethics & Sustainability:

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Primary Sidebar

Useful Read

  • Strategic Management
  • Marketing
  • Global Marketing
  • International Trade
  • CSR & Ethics

Tools & Models

  • SWOT Analysis
  • PEST Analysis
  • Porters Five forces framework
  • Value chain analysis
  • Porters Generic Strategies
  • Boston Consulting Group (BCG) Matrix
  • Bowman’s Strategic Clock
  • Market Segmentation

Recent Posts

  • Success Factors for Customer Relationship Management (CRM)
  • Top Market Research reports and databases for data
  • Supply Chain Management: Comprehensive Guide and Strategies
  • Internal and External Sources of Finance: Building Blocks of Business Financing
  • Capital Investment Appraisal Methods

Footer

Categories

  • Book Review
  • Case Studies
  • CSR, Ethics & Sustainability:
  • Entrepreneurship
  • Finance & Accounting
  • General Management
  • Global Marketing
  • HR Management
  • International Trade
  • Leadership
  • Marketing & Sales
  • Operations and Supply Chain
  • Resources
  • Strategic Management
  • Uncategorized

About Us

  • Contact
  • Privacy Policy

Copyright © 2023 · eleven40 Pro on Genesis Framework · WordPress · Log in

Go to mobile version