Corporate social responsibility (CSR) is often confounded with business ethics and though they are significantly related it is helpful to see how CSR is fortified with a strong emphasis on ethical thinking throughout. Over the decades, I have emphasized that CSR includes and embraces the economic, legal, ethical, and philanthropic (or discretionary) expectations society has of businesses at a given point in time. Though I have identified the ethical category as a distinct but related element in CSR, it is important to understand how ethical responsibility pervades all the categories and thus is indelibly infused into the four-part CSR construct which forms the basis for my Pyramid of CSR, with the economic responsibility serving as the foundation for the others.
Though often contrasted with ethics, the economic responsibility of business is saturated with ethical thinking. In most developed countries, free enterprise capitalism has been chosen to be the economic system by which the countries function as a methodology for providing goods, services, and jobs for their population. The type of economic system chosen by a country reflects what the citizenry believes to be the best, and most ethical, method of operating. Many developing countries are striving to attract investment capital, and they do this by emulating capitalistic economic systems, believing this is best for their citizenry.
The legal responsibility of business is built upon ethical thinking because most laws and regulations commenced as ethical issues only later to be codified into law. In other words, law and regulations reflect codified ethics. Examples abound. Societal concerns for workers, consumers and the environment were advocated as the “right thing to do,” before eventually being codified into law. Thus, the legal responsibility of business began as an ethical responsibility.
The ethical responsibility of business is built upon the legal responsibility and often is intended to reflect what businesses are expected to do above and beyond what is required by law. Legal standards are often regarded as minimal levels of responsibility or floors upon which desired behavior and actions are built. Ethical responsibility echoes what is right, just and fair.
Philanthropic responsibilities are predictably based upon beliefs that good corporate citizenship is giving back or doing something for society that reflects what ought to be done by the common citizenry as well as by business entities. Many companies engage in strategic philanthropy striving to wed their giving in ways that will be profitable for the company. However, many other companies give back because they see it as the fair thing to do, that is, as an ethically driven activity.
Hence, one can see how the ethical dimension cuts through each of the four categories of CSR even though there is a stand-alone expectation of ethical responsibility that typically contends that companies are expected to go above and beyond what is required of them. Therefore, the socially responsible, sustainable, business is expected by society to make a profit, conform to the law, engage in ethical behavior and be a good corporate citizen by giving back.
References
- Carroll, Archie B. 2015. “Corporate social responsibility: The centerpiece of competing and complimentary frameworks,” Organizational Dynamics 44: 87-96.
- Carroll, Archie B. 2016. “Carroll’s pyramid of CSR: Taking another look.” International Journal of Corporate Social Responsibility 1:3.
- Carroll, Archie B. 2004. “Managing ethically with global stakeholders: A present and future challenge. Academy of Management Executive 18:2, 114-120.
Professor emeritus, Terry College of Business, University of Georgia, USA. Dr. Carroll received his three academic degrees in management (1965; 1966; 1972) from the College of Business, The Florida State University (Tallahassee, Florida USA). He is founding author and now co-author of BUSINESS & SOCIETY: ETHICS, SUSTAINABILITY & STAKEHOLDER MANAGEMENT (2023), 11th edition, with Jill A Brown; Co-author of CORPORATE RESPONSIBILITY: THE AMERICAN EXPERIENCE which won the 2014 BEST BOOK AWARD at the Academy of Management--Social Issues in Management Meeting; and Author of BUSINESS ETHICS: BRIEF READINGS ON VITAL TOPICS. Carroll won the first Lifetime Achievement Award in Corporate Social Responsibility (CSR) from the Institute of Management, Humboldt University, Berlin, Germany. He is a Fellow of the Academy of Management, International Association for Business & Society, and the Southern Management Association. He has published over 100 articles, and his citations exceed 100,000 according to Google Scholar Citations.