Corporate social responsibility (csr) consists of which four kinds of responsibilities:

The idea of Corporate Social Responsibility (CSR) has been a topic of discussion since the 1950s. However, it wasn’t until much later that people started understanding its meaning, significance and impact. CSR, in the form that we see today, became popular after it was defined by Archie Carroll’s “Pyramid of Corporate Social Responsibility” in 1991. 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.Carroll’s pyramid suggests that corporate has to fulfil responsibility at four levels – Economic, Legal, Ethical and Philanthropic.

Economic Responsibility

The lowest level of the pyramid represents a business’s first responsibility, which is to be profitable. Without profit, the company would not be able to pay their workers, employees will lose their jobs even before the company starts CSR activities. Being profitable is the only way for a company to be able to survive long term, and benefit society. Additionally, this also means that it is a company’s duty to produce goods and services that are needed/wanted by the customers, at a reasonable price.

Legal Responsibility

The second level of the pyramid is the business’s legal obligation to obey the law. This is the most important responsibility out of the four levels as this will show how companies conduct their business in the marketplace. Employment laws, competition with other companies, tax regulations and health and safety of employees are some examples of the legal responsibilities a company should adhere to. Failing to be legally responsible can be very bad for businesses.

Ethical Responsibility

The ethical layer of the pyramid is described as doing the right thing, being fair in all situations and also avoiding harm. A company should not only be obeying the law, but it should also do their business ethically. Unlike the first two levels, this is something that a company is not obligated to do. However, it is best for a company to be ethical as this not only shows their stakeholders that they are moral and just, but people will feel more comfortable purchasing goods/services from the company as well. Being environmentally friendly, treating suppliers/employees properly are a few examples of being ethically responsible.

Philanthropic Responsibility

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. Even though this is the highest level of CSR, it should not be taken lightly as many people would want to do business with companies that are giving back to society. Philanthropic Responsibility is more than just doing what is right, but it is something that holds true to the company’s values, to give back to society.According to Carroll’s pyramid, responsible business is one which qualifies all the levels of responsibilities before taking up philanthropy. Without fulfilling the other responsibilities, a business cannot sustain.

A measure of success in today’s world includes corporate social responsibility. As a leader, you weave corporate social responsibility (CSR) in your company plans. You are thinking about your brand image with respect to CSR. You are thinking about your employees and your company mission. All of these include CSR.

However, you may not be familiar with all the aspects. For that reason, it’s helpful to know the 4 types of CSR.  You may know the overall theme or idea, yet may not know Carroll’s Four Part Model. Therefore, we will be taking a look at Carroll’s pyramid, and what is included in the four types of Corporate Social Responsibility.

What is Carroll’s Four Part Model of Corporate Social Responsibility?

First, Carroll’s pyramid is a framework that helps businesses understand the responsibilities they have to society. The model includes 4 responsibilities: economic, legal, ethical, and finally philanthropic. Understanding this model, and incorporating these responsibilities in your business can make a big difference.

1. Economic Responsibility

First up, economic responsibility. The foundation of the social responsibility pyramid rests on a business’s ability to be profitable. Yes, that’s right! CSR includes the need to be profitable. The economic responsibility creates a balance between the next 3: ethical, legal, and philanthropic responsibilities. A company needs to survive in order to support the community. Economic responsibility is overall a positive. We see the negative side to this layer when a company maximizes profits above all other responsibilities.  

2. Legal Responsibility

The next level of the pyramid is legal responsibility. This defines a company’s responsibility to follow all the laws and regulations that apply to the business operations. We can think about the tax regulations in certain states, countries, or regions as one example. Further, one can think about the health and safety of employees. Many regions mandate certain rules or laws to follow when employing others. A further example would be meeting regulations set by the FDA. These laws are in place to protect consumers from becoming ill. Naturally, failing to be legally responsible has many negative consequences.

3. Ethical Responsibility

Following legal responsibility on the pyramid is ethical responsibility. Many times, we think about ethical as doing the right thing. Doing the right thing, even though it may not be a law. Generally, ethics go beyond a certain region’s laws and follow the social or cultural norms of that area. Therefore, a company should not be just obeying the law, but also be willing to do business ethically. Although this is not an obligation for your company, it is in the best interests. Customers and employees will be more likely to support your team when making ethical decisions.

An example could be fair working conditions, working wage, working hours, or age of employed worker. Depending on the country or state, laws differ and your team will have to decide how your business is operated and who your business works with. It is up to management to make moral decisions that will ultimately impact consumers, employees, the environment, and this business itself. 

4. Philanthropic Responsibility

The final piece on the pyramid is philanthropic responsibility. Businesses are expected to give back to their communities. Similar to ethical responsibility, this is not an obligation or law for most countries. However, incorporating philanthropic responsibility has many benefits. Businesses being philanthropic improves brand image. Further, consumer engagement increases & employees are more likely to apply for a job. The nature of this responsibility is completely voluntary and is guided by your company’s desire to take part in social activities.

Naturally a company can donate part of the profits from the first section of the pyramid — economic. However, philanthropic does not always have to be money that is donated. Teams can donate time or products. With that, leaders can create a volunteer program to allow for volunteer days or volunteer time off. For that, you may want to include a volunteer policy which will help to manage and coordinate your team. The social responsibility of a business is to make sure that they can affect social, economic, public health, and environmental changes in a positive way.

Conclusion

As a review, the four types of social responsibility include: economic, legal, ethical, and philanthropic. These responsibilities are all complementary to each other and are great to incorporate to your corporate plans. You can review our commitment to these goals through our B Corp Certification. 

Finally, we at Selflessly are always happy to help with your philanthropic goals. Please feel free to reach out anytime with questions about Corporate Giving or Volunteering Programs. [email protected]

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