TYPES OF CSR & THE PYRAMID OF CSR
SEEMA VETAL. M-8143
Corporate so!a" respo#s!$!"!t% Corporate social responsibility (CSR, also called corporate conscience, corporate citizenship or responsible business)[1] is a form of corporate self-regulation integrated into a business model CSR policy functions as a self-regulatory mechanism !hereby a business monitors and ensures its acti"e compliance !ith the spirit of the la!, ethical standards and national or international norms #ith some models, a $rm%s implementation of CSR goes beyond compliance and engages in &actions that appear to further some social good, beyond the interests of the $rm and that !hich is re'uired by la!&[][] CSR aims to embrace responsibility for corporate actions and to encourage a positi"e impact on the en"ironment and sta*eholders including consumers, employees, in"estors, communities, and others
T%pes o Corporate So!a" Respo#s!$!"!t% Aor'!#( to )eo*re% La#tos+ 3 ,a!# t%pes o CSR.
+thical CSR ltruistic CSR Strategic CSR
1 +thical CSR
.t/s about to a"oid responsibility to a"oid harms and social in0uries
ltruistic CSR
Contributing to the common good at the possible epenses of the business for altruistic, humanitarian or philanthropic causes
Strategic CSR
.t/s about $rm/s social !elfare responsibilities that bene$t both the corporations and sta*eholders
P%ra,!' O Corporate So!a" Respo#s!$!"!t%
2or CSR to be accepted by a conscientious business person, it should be framed in such a !ay that the entire range of business responsibilities are embraced .t is suggested here that four *inds of social responsibilities constitute total CSR economic, legal, ethical and philanthropic 2urthermore 3hese four categories or components of CSR might be depicted as a pyramid 3o be sure all of these *inds of responsibilities ha"e al!ays eisted to some etent but it has only been in recent years that ethical and philanthropic functions ha"e ta*en a signi$cant place +ach of these four categories deser"es closer consideration
Eo#o,! Respo#s!$!"!t!es 4istorically business organizations !ere created as economic entities designed to pro"ide goods and ser"ices to societal members 3he pro$t moti"e !as established as the primary
incenti"e for entrepreneurship 5efore it !as anything else, business organization !as the basic economic unit in our society s such, its principal role !as to produce goods and
ser"ices that consumers needed and !anted and to ma*e an acceptable pro$t in the process t some point the idea of the pro$t moti"e got transformed into a notion of maimum pro$ts, and this has been an enduring "alue e"er since ll other business responsibilities are predicated upon the economic responsibility of the $rm, because !ithout it the others become moot considerations 2igure 1 summarizes some important statements characterizing economic responsibilities
Le(a" respo#s!$!"!t!es 6egal Responsibilities Society has not only sanctioned business to operate according to the pro$t moti"e7 at the same time business is epected to comply !ith the la!s and regulations promulgated by federal, state, and local go"ernments as the ground rules under !hich business must operate s a partial ful$llment of the &social contract& bet!een business and society $rms are epected to pursue their economic missions !ithin the frame!or* of the la! 6egal responsibilities re8ect a "ie! of &codi$ed ethics& in the sense that they embody basic notions of fair operations as established by our la!ma*ers 3hey are depicted as the net layer on the pyramid to portray their historical de"elopment, but they are appropriately seen as coeisting !ith economic responsibilities as fundamental precepts of the free enterprise system
Et!a" Respo#s!$!"!t!es lthough economic and legal responsibilities embody ethical norms about fairness and 0ustice, ethical responsibilities
embrace those acti"ities and practices that are epected or prohibited by societal members e"en though they are not codi$ed into la! +thical responsibilities embody those standards, norms, or epectations that re8ect a concern for !hat consumers, employees, shareholders, and the community regard as fair, 0ust, or in *eeping !ith the respect or protection of sta*eholders%moral rights .n one sense, changing erl1ics or "alues pre- cede the establishment of la! because they become the dri"ing force behind the "ery creation of la!s or regulations 2or eample, the en"ironmental, ci"il rights, and consumer mo"ements re8ected basic alterations in societal "alues and thus may be seen as ethical bell!ethers foreshado!ing and resulting in the later legislation .n another sense, ethical responsibilities may be seen as embracing ne!ly emerging "alues and norms society epects business to meet, e"en though such "alues and norms may re8ect a higher standard of performance than that currently re'uired by la! +thical responsibilities in this sense are often ill-de$ned or continually under public debate as to their legitimacy, and thus are fre'uently di9cult for business to deal !ith Superimposed on these ethical epectations emanating from societal groups are the implied le"els of ethical performance suggested by a consideration of the great ethical principles of moral philosophy 3his !ould include such principles as 0ustice, rights, and utilitarianism 3he business ethics mo"ement of the past decade has $rmly established an ethical responsibility as a legitimate CSR component 3hough it is depicted as the net layer of the CSR pyramid, it must be constantly recognized that it is in dynamic interplay !ith the legal responsibility category 3hat is, it is constantly pushing the legal responsibility category to broaden or epand !hile at the same time placing e"er higher epectations on businesspersons to operate at le"els abo"e that re'uired by la! 2igure depicts statements that help characterize ethical responsibilities 3he $gure also summarizes philanthropic responsibilities, discussed net
P!"a#trop! Respo#s!$!"!t!es
:hilanthropy encompasses those corporate actions that are in response to society/s epectation that businesses be good corporate citizens 3his includes acti"ely engaging in acts or programs to promote human !elfare or good!ill +amples of philanthropy include business contributions to $nancial resources or eecuti"e time, such as contributions to the arts, education, or the community loaned-eecuti"e program that pro"ides leadership for a community/s ;nited #ay campaign is one illustration of philanthropy