The idea of corporate social responsibility (CSR) began to be discussed with the 1953 publication of Howard R. Bowen's book, "Social Responsibilities of the Businessman." It became more talked about during the social upheaval of the 1960s, including civil rights and environmental responsibility, with some authors writing about 30 or more points of CSR. Then, in 1991, Archie B. Carroll simplified CSR into a four-part pyramid. Its simplicity, yet ability to describe the idea of CSR with four areas, has made the pyramid one of the most accepted corporate theories of CSR since.
Tip
The four levels of social responsibility are economic, legal, ethical and philanthropic responsibilities,
The lowest level of the pyramid represents a business's first responsibility, which is to be profitable. That's the reason it was created to begin with; not out of greed, although some businesses have been accused of having greed at their core. But businesses are created to be the livelihood of their owners. It's how the owners pay their own bills. That goes for its investors, too. Although the business may not be the sole livelihood of the investors, they invested with the hope of making money. After all, their funds are tied up in this business, so getting earnings from it is the reward for investing.
Businesses also need to be profitable to be able to pay their employees, vendors and contractors. If it isn't profitable, all of these people will be affected, vendors won't sell to them, employees will quit and the business will fail.
Example:
Two friends who love to bake use their savings and a loan from a relative to open a bakery. They hire two part-time employees to work mornings, waiting on customers and restocking pastries while the owners bake. At first, the bakery only makes enough money to pay the part-time helpers minimum wage and pay for rent, supplies, utilities and other bills. As the bakery becomes a bit more profitable, the owners advertise to attract more customers. With more customers, they need to give their part-timers more hours and buy more supplies to bake more pastries for the extra customers. As the business grows, they'll use some of the profits to pay back the loan. Eventually, the owners want to take a salary and give their employees raises as a reward for their hard work and an incentive to stay. None of this would be possible without profits.
The second level of the pyramid is the business's legal obligation to obey the law. Not just some of the laws, but all the laws, all the time. It means not looking the other way while gray areas of the law are ignored, because doing so jeopardizes the business.
Example:
Fines can be steep for disobeying business laws. Skirting food safety laws can get the business shut down quickly. If someone gets sick, there could be an expensive lawsuit with legal fees and even higher fines to pay, which could put the company out of business. This would put the employees out of work and cause financial setbacks for suppliers.
The ethical layer of the pyramid is described as doing the right thing, being fair in all situations and also avoiding harm. At first, this sounds simple enough. But when coupled with the first level, to be profitable, conflicts can occur. Can a business always be fair and turn a profit? And, these ethics apply to all stakeholders, including investors and employees, as well as to customers. What about to competitors? Well, always means in all cases at all times, so yes, these ethics would apply to dealings with competitors.
Example:
Advertising is an area where firms are known to stretch the truth, making statements that aren't necessarily false, but aren't necessarily true in all cases either. Advertisers must meet the guidelines set by the Federal Trade Commission and they are sometimes told to stop making certain health or other claims that aren't proven. But what about statements like, "best pies east of the Mississippi." To be true, the owners would have had to personally try the pies of every bakery east of the river. And, when it comes to food, "the best" is quite subjective. One person might describe a crust as "buttery, light and flaky," while another person would deem it "tastes like cardboard."
At the top of the pyramid, occupying the smallest space is philanthropy. Businesses have long been criticized for their carbon footprint, their part in pollution, using natural resources and more. To counterbalance these negatives, they should "give back" to the community they take from.
Example:
They could do this directly, with a monetary donation to plant more trees in the park. This helps to offset the bags and boxes they put their pastries in. Or, they could get the company's employees involved by having a tree-planting day at the park. The company will pay for the seedlings, and they will make time for the volunteer work, which costs the company money in the time the employees are being paid, but aren't producing any work for the company. Additionally, the bakery could donate leftover bread, donuts, cookies and other pastries to a local homeless shelter at the end of the day instead of selling day-old items at a discount in the bakery.
Aupperle, K. E. (1984). An Empirical Measure of Corporate Social Orientation. Research in Corporate Social Policy and Performance. Greenwich: JAI Press.
Google Scholar
Aupperle, K. E., Carroll, A. B., & Hatfield, J. D. (1985). An empirical examination of the relationships between corporate social responsibility and profitability. Academy of Management Journal, 28(2), 446–63.
Article Google Scholar
Bowen, H. (1953). Social responsibilities of the businessman. New York: Harper & Row.
Google Scholar
Burton, B. K., & Hegarty, W. H. (1999). Some determinants of student corporate social responsibility orientation. Business and Society, 38(2), 188–2005.
Article Google Scholar
Carroll, A. B. (1979). A three-dimensional conceptual model of corporate social performance. Academy of Management Review, 4, 497–505.
Google Scholar
Carroll, A. B. (1991). The pyramid of corporate social responsibility: toward the moral management of organizational stakeholders. Business Horizons, 34(4), 39–48.
Article Google Scholar
Carroll, A. B. (1999). Corporate social responsibility: evolution of a definitional construct. Business and Society, 38, 268–95.
Article Google Scholar
Carroll, A. B. (2015a). Corporate social responsibility: The centerpiece of competing and complimentary frameworks. Organizational Dynamics, 44, 87–96.
Article Google Scholar
Carroll, A. B. (2015b). The State of CSR in 2015 and Beyond. Global Compact International Yearbook. (pp. 10–13). Macondo Publishers, Global Logistics Partner, Deutsche Post DHL Group.
Carroll, A. B., & Buchholtz, A. K. (2015). Business and society: ethics, sustainability and stakeholder management (9th ed.). Stamford: Cengage Learning.
Google Scholar
Carroll, A. B., & Shabana, K. M. (2010). The business cases for corporate social responsibility: a review of concepts, research and practice. International Journal of Management Reviews, 12, 85–105.
Article Google Scholar
Carroll, A. B., Lipartito, K. J., Post, J. E., Werhane, P. H., & Goodpaster, K. E. (Eds.). (2012). Corporate responsibility: the American Experience. Cambridge: Cambridge University Press.
Google Scholar
Chrisman, J. J., Carroll, A. B. (1984). SMR forum: corporate responsibility—reconciling economic and social goals. Sloan Management Review. Winter. p. 59–65.
Clarkson, M. B. E. (1995). A stakeholder framework for analyzing and evaluating corporate social performance. Academy of Management Review, 20, 92–117.
Google Scholar
Crane A, Matten D. (2007). Business ethics: managing corporate citizenship and sustainability in the age of globalization. (2nd ed.). Oxford University Press.
Crane, A., Matten, D., & Spence, L. (2008). Corporate social responsibility: readings and cases in a global context (2nd ed., pp. 3–26). New York: Routledge.
Google Scholar
Dahlsrud, A. (2006). How corporate social responsibility is defined: an analysis of 37 definitions. Corporate Social Responsibility and Environmental Management, 15, 1–13.
Article Google Scholar
Davis, K. (1975). Blomstrom. Business and society: environment and responsibility (3rd ed.). New York: McGraw-Hill Book Company.
Google Scholar
Edmondson, V. C., & Carroll, A. B. (1999). Giving back: an examination of the philanthropic motivations, orientations and activities of large black-owned businesses. Journal of Business Ethics, 19, 171–9.
Article Google Scholar
Elsevier Journals. Most downloaded Business Horizons articles. //www.journals.elsevier.com/business-horizons/most-downloaded-articles/. Accessed 7 Jan 2016.
Friedman, M. (1962). Capitalism and freedom. Chicago: University of Chicago Press.
Google Scholar
Google Images. Pyramid of CSR. //www.google.com/search?site=&tbm=isch&source=hp&biw=1920&bih=955&q=Pyramid+of+CSR&oq=Pyramid+of+CSR&gs_l=img.12..0l2j0i24l4.13711.18241.0.23864.14.10.0.4.4.0.88.578.10.10.0....0…1ac.1.64.img..0.14.598.58IAXeqmf6Y. Accessed 4 Jan 2016.
Google Scholar. //scholar.google.com/scholar?cites=13669080523806449819&as_sdt=80005&sciodt=0,11&hl=en. Accessed 6 Jan 2016.
Kurucz, E., Colbert, B., & Wheeler, D. (2008). The business case for corporate social responsibility. In A. Crane, A. McWilliams, D. Matten, J. Moon, & D. Siegel (Eds.), The Oxford handbook of corporate social responsibility (pp. 83–112). Oxford: Oxford University Press.
Google Scholar
Lee, M.-D. P. (2008). A review of the theories of corporate social responsibility: its evolutionary path and the road ahead. International Journal of Management Reviews, 10(1), 53–73.
Article Google Scholar
Levitt, T. (1958). The dangers of social responsibility (pp. 41–50). Harvard business review.
Pinkston, T. S., & Carroll, A. B. (1996). A retrospective examination of CSR orientations: have they changed? Journal of Business Ethics, 15(2), 199–206.
Article Google Scholar
Schwartz, M., & Carroll, A. B. (2003). Corporate social responsibility: a three domain approach. Business Ethics Quarterly, 13(4), 503–30.
Article Google Scholar
Smith, W. J., Wokutch, R. E., Harrington, K. V., & Dennis, B. S. (2001). An examination of the influence of diversity and stakeholder role on corporate social orientation. Business and Society, 40(3), 266–94.
Article Google Scholar
Spence, L. (2016). Small business social responsibility: expanding core CSR theory. Business and Society, 55(1), 23–55.
Article Google Scholar
Swanson, D. L. (1995). Addressing a theoretical problem by reorienting the corporate social performance model. Academy of Management Review, 20, 43–64.
Google Scholar
Visser, W. (2006). Revisiting Carroll’s CSR pyramid: an African perspective. In M. Huniche & E. P. Rahbek (Eds.), Corporate citizenship in developing countries—new partnership perspectives (pp. 29–56). Copenhagen: Copenhagen Business School Press.
Google Scholar
Visser, W. (2011). The age of responsibility: CSR 2.0 and the new DNA of business. West Sussex: John Wiley & Sons.
Google Scholar
Wartick, S. L., & Cochran, P. L. (1985). The evolution of the corporate social performance model. Academy of Management Review, 10, 758–69.
Google Scholar
Wood, D. J. (1991). Corporate social responsibility revisited. Academy of Management Review, 16, 691–718.
Google Scholar
Wood, D., & Jones, R. (1996). Research in corporate social performance: what have we learned. In B. Dwight & Y. Dennis (Eds.), Corporate philanthropy at the crossroads. Bloomington: Indiana University Press.
Google Scholar
Page 2
Carroll’s pyramid of CSR