Carroll's Corporate Social Responsibility (CSR) Pyramid | A-Level & IB Business

Summary

This video explores Archie Carroll's CSR Pyramid, which outlines a framework for understanding Corporate Social Responsibility (CSR). Carroll's model emphasizes that businesses must first focus on economic responsibilities—making a profit—before considering legal, ethical, and philanthropic duties. The four layers of CSR, in order, are economic, legal, ethical, and philanthropic. Carroll argues that a business's primary purpose is to generate profit, but it must also consider its wider responsibilities to society. This pyramid offers a clear structure for businesses to balance profitability with broader societal obligations.

Takeaways

• 😀 CSR (Corporate Social Responsibility) is about a business looking beyond its shareholders to consider its responsibilities to a wider group of stakeholders like society, customers, and suppliers.
• 😀 The traditional view of CSR, according to Milton Friedman, focuses solely on profit-making, with no other societal responsibilities.
• 😀 Archie Carroll's CSR Pyramid provides a framework for businesses to think about their responsibilities to society.
• 😀 The CSR Pyramid consists of four layers: economic, legal, ethical, and philanthropic responsibilities.
• 😀 The foundational layer of CSR is economic: businesses must first be profitable and able to sustain themselves to be useful to society.
• 😀 After ensuring economic viability, the next layer is legal responsibility: businesses must comply with laws and regulations.
• 😀 The third layer of CSR is ethical responsibility: businesses should act morally and ethically, going beyond the law, especially in employee treatment and working conditions.
• 😀 The final layer of CSR is philanthropic responsibility: businesses should give back to society through charitable activities and community support.
• 😀 Carroll emphasizes that businesses must first focus on making a profit before they can engage in philanthropic or ethical activities.
• 😀 Carroll's CSR Pyramid is a useful model to help understand the multi-faceted nature of CSR but is not necessarily a decision-making tool.
• 😀 The key takeaway is that CSR is a gradual process starting with profitability and moving toward legal, ethical, and philanthropic responsibilities, each layer building upon the last.

Q & A

What is the core focus of Corporate Social Responsibility (CSR)?

CSR focuses on a business's responsibility to look beyond its shareholders and consider its impact on a wider range of stakeholders, such as society, customers, and suppliers.

How does Milton Friedman's view on CSR differ from Archie Carroll's?

Milton Friedman believed that a business's only responsibility was to make a profit, while Archie Carroll advocated for a broader view, suggesting that businesses must also consider their responsibilities to society, not just profits.

What is the significance of Archie Carroll's CSR Pyramid?

Carroll's CSR Pyramid is a framework that helps businesses understand their responsibilities in a structured way, emphasizing that businesses must start by ensuring profitability before moving on to legal, ethical, and philanthropic duties.

What is the foundation of CSR in Carroll's pyramid?

The foundation of CSR in Carroll's pyramid is economic responsibility, which means that businesses must first be profitable to be useful to society.

What comes after economic responsibility in Carroll's CSR Pyramid?

After economic responsibility, the next layer is legal responsibility, where businesses must comply with laws and regulations in the jurisdictions where they operate.

What does ethical responsibility entail in Carroll's CSR Pyramid?

Ethical responsibility involves businesses acting morally and ethically beyond what is required by law, such as treating employees fairly and ensuring good working conditions.

How does Carroll define philanthropic responsibility?

Philanthropic responsibility refers to a business going beyond its legal, ethical, and economic duties by actively contributing to societal welfare, such as sponsoring charitable activities or community projects.

What is the key takeaway from Carroll's CSR Pyramid?

The key takeaway is that businesses must first ensure their economic success to support the other aspects of CSR. Only after ensuring profitability can businesses engage in legal, ethical, and philanthropic activities.

How does Carroll's CSR Pyramid relate to decision-making in businesses?

The CSR Pyramid is a framework for thinking about CSR decisions but is not necessarily a decision-making tool. It provides a structure for understanding the different levels of business responsibility.

Why is it important for businesses to focus on profitability first in the CSR Pyramid?

Profitability is essential because a business can only be useful to society and able to fulfill its legal, ethical, and philanthropic responsibilities if it remains financially viable and sustainable.