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CORPORATE SOCIAL RESPONSIBILITY: A THREE-DOMAIN APPROACH
Mark Schwartz ArchieB. Carroll S. and
A6stract:Extrapolating fromCarroll's domainsof corporatesocial four
responsibility (1979)and Pyramidof CSR(1991),an alternativeapS proach to conceptualizingcorporate social responsibility (CSR)is proposed. A threeSdomain approachis presented in whichthe three core domainsof economic,legal, and ethical responsibilities are deH picted in a Vennmodel framework. Vennframework The yields seven CSR categories resultingfromthe overlapof the three core domains. Corporateexamples are suggested and classified accordingto the new model, followed by a discussion of limitationsand teachingand researchimplications. Eor the past several decades, the debate over the properrelationshipbetween business and society has focused on the topic of corporatesocial responsibility (CSR) (Klonoski 1991). In the modernera, the stage was set for this debate by Keith Davis, who posed two intriguingquestions in the 1960s: "Whatdoes the businessperson owe society?" (Davis 1967) and "Can business afford to ignore its social responsibilities?"(Davis 1960). Althoughmanyhave attempted to define CSR over the years, the concept has remainedvague and ambiguousto some (Makower 1994: 12). Definitions of CSR fall into two general schools of thought, those that argue that business is obligated only to maximize profits withinthe boundaries the law andminimalethicalconstraints of (Friedman1970; Levitt 1958), and those that have suggested a broaderrange of obligations towardsociety (Andrews 1973; Carroll1979; Davis andBlomstrom1975; Epstein 1987; McGuire 1963). An importantattemptto bridge the gap between economics and otherexpectations was offered by Archie Carroll (1979). His efforts culminated in the following proposed definition of corporatesocial responsibility: The social responsibilityof businessencompassesthe economic, legal,ethical, and discretionary expectations that society has of organizationsat a
given point in time. (1979: 500, emphasis added)
As a helpful way of graphicallydepictingthe componentsof his CSR definition andexpoundinguponthem,he laterincorporated four-part his categorization into a "Pyramidof CorporateSocial Responsibility" (1991; 1993). Carroll's Pyramidof CSR is presentedin Figure 1.
C)2003. Business Ethics Quarterly,Volume 13, Issue 4. ISSN 1052-1SOX. pp. 503-530
BUSINESS ETHICS QUARTERLY Figure 1 Carroll's (1991) Pyramid of Corporate Social Responsibility
Be a good corporate citizen Be ethical
Desired thropic Ethical \ \
Obey the law
Source: A. B. Carroll, "The Pyramid of Corporate Social Responsibility: Toward the Moral Management of Organizational Stakeholders," Business Horizons (July-August 1991): 39-48.
Carroll'sfour categoriesor domainsof CSR have been utilized by numerous theorists (Wartickand Cochran 1985; Wood 1991; Swanson 1995, 1999) and empiricalresearchers (Aupperle1984;Aupperle,Carroll,andHatfield1985;Burton and Hegarty1999; Clarkson1995; IbrahimandAngelidis 1993, 1994, 1995; Mallott 1993; O'Neill, Saunders,andMcCarthy1989;PinkstonandCarroll1996; Smith,Wokutch,Harrington, Dennis 2001; Spencerand Butler 1987; Strong and and Meyer 1992). Several business and society and business ethics texts have incorporated Carroll's CSRdomains(Boatright 1993;Buchholz1995;Weiss 1994) or have depictedthe CSR Pyramid(Carrolland Buchholtz2000, 2003; Jackson, Miller, and Miller 1997; Sexty 1995; Trevino and Nelson 1995). According to WoodandJones (1996: 45), Carroll'sfour domainshave "enjoyedwide popularity among SIM (Social Issues in Management) scholars."Such use suggests that Carroll'sCSR domains and pyramidframeworkremain a leading paradigmof CSR in the social issues in management field. Due to the acceptanceand impact of Carroll'sCSR contributions, may be appropriate re-examinehis model to it to determinewhetherit can be modifiedor improvedor if thereis a possible alternative approach conceptualizingcorporatesocial responsibility. to In a quest to propose an alternativeapproachto CSR that strives to augment and amendthe Carrollmodel, the following paperwill consist of four parts:(1) a brief discussion of some issues or limitationsof Carroll'smodel; (2) a presentation of the new alternativemodel, the "Three-Domain Model of CSR";(3) a discussion of the limitations of the new model; and (4) future teaching and research implications of the new model.
SOCIALRESPONSIBILITY CORPORATE Issues with Carroll's Model
Threeissues with respectto the Carrollmodel are identified and discussed as they are items upon which the proposedthree-domainmodel proposes changes. The three issues include: (1) the use of a pyramidto depict the relationships as amongthe four componentsof the model; (2) the role of philanthropy a separate componentin the model; and (3) the incompletetheoreticaldevelopmentof the economic, legal, and ethical domains. Use of a Pyramid Framework Although there is considerablevalue in Carroll'sfour-partmodel, his use of a pyramidframeworkto depict his CSR domainsmay be confusing or inappropriate for some applications.First, to some, the pyramidframeworksuggests a hierarchyof CSR domains. One may be led to conclude that the domain at the or responsibilities,is the most important highly top of the pyramid,philanthropic valued domain, that should be strived for by all corporations,while the economic domain at the base of the pyramidis the least valued CSR domain. For example, Reidenbachand Robin (1991: 274) use a pyramidto depict their conceptual model of corporatemoral development,and suggest that the top of the pyramidrepresentsthe highest or most advanced stage of moral development (i.e., the "ethical"corporation),while the base of the pyramidportraysthe lowest or least advancedstage (i.e., the "amoral"corporation).This is clearly not the perspectiveof the pyramid'srankingsof CSR prioritiesthatCarrollintended, since he stipulatesthat the economic and legal domainsare the most fundamental while philanthropicresponsibilities are considered less importantthan the other three domains (1991: 42). However, the pyramidframeworkcould lead the one to misunderstand prioritiesof the four CSR domains. Second, a pyramidframeworkcannotfully capturethe overlappingnatureof the CSR domains, a disadvantagerecognizedby Carroll(1993: 34). Such mutuality is an integral characteristicof CSR (Clarkson 1991: 349) and of such fundamentalimportancethat it must be included and clearly depicted in any proposedCSR model. Carroll'suse of dotted lines separatingthe domainsdoes not fully capturethe non-mutuallyexclusive natureof the domains, nor does it denotetwo of the criticaltensionpointsamongthem,the tensionbetweenthe ecodomains(Carroll1993: 34). nomic andethicalandthe economicandphilanthropic Use of a Separate Philanthropic Category inherentin using a pyramid, In addition to the possible misunderstandings category can be confusing and Carroll'suse of a "philanthropic/discretionary" may be seen as unnecessaryto some. Carrollacknowledges that it may in fact (1993: 33) to call such activities (1979: 500) or a "misnomer" be "inaccurate" "responsibilities"due to their voluntary or discretionarynature. Others agree that philanthropycannotbe considereda responsibilityin itself (L'Etang1994; Stone 1975). In this respect, philanthropyis not considered a duty or social
nTr A DTEDT v yUARlLALl
responsibility of business ti.e. an expected act based on what Kantiansmight refer to as a 4iperfect" duty) but something that is merely desirable or beyond what duty requires (e.g., a supererogatoryact based on what Kantiansmight refer to as an "imperfect" duty)* The new model proposes that such a categoryS it were believed to exist7 if would better be subsumedunder ethical and/oreconomic responsibilities.The centralreasons for this placementare that, first it is sometimes difficult to distinguish between "philanthropic'and "ethical activities on both a theoretical and practicallevel7 and second, philanthropicactivities might simply be based on economic interests. At the theoreticallevels the ethical principleof utilitarianism be used to can justify manyphilanthropic activities,includingall of the examplesCarroll(1993: 33) refersto (e.g. giving to charity,adoptinga school, providinga day-carecenter for working mothers,conductingin-house programsfor drug abusers).For example, Shaw and Post (1993: 746) arguethat rule utilitarianism supportscorporatephilanthropy a meansof complyingwith a 4;rule" as which maximizesthe public welfare. In this vein, it could be arguedthat philanthropic activities are simply an example of an ethically motivatedactivity. One formulationof Kant's categorical imperativeis thatone shouldtreatpeople as an end in themselvesandnot merely as a means to an end. If a companyprovidesa day-carecenterfor workingmothers or conductsin-houseprograms drugabusers,is it not possible thatthey are for treatingtheiremployees as ends in themselves and not merely as a means? When Carroll says that the essence of these philanthropicactivities is that they are "not generally expectedof business in an ethical sense' (1993: 33, emphasis added) this raises the question of exactly when an activity can be consideredethical as opposed to philanthropicaccordingto Carrolls treatment of these two domains. For example, is a corporation'scontributionto a charitableorganization ethical activity (i.e*,expectedby society) or a philanthropic an activity (i.e., merely desired by society)? Evidence currentlyindicates that the majorityof companies donate to charitableorganizations(Carroll 1993: 387), with a majority of the population expecting that companies make charitable donations (Sexty 1995: 274). Do these findings not suggest that society now expectscorporatephilanthropiccontributions?According to Carroll's definitions, the paramountexample of a philanthropicactivity, giving to charitable organizations,could arguablyfall underthe ethical domain,ratherthanneeding to be separatedinto a philanthropicdomain as currentlydefined. Even if one is able to make a theoreticaldistinctionbetween ethical and philanthropic activities,thereis still an issue as to whethersuch a distinctioncould be appliedby empiricalresearchers the field. Clarkson(1995: 95) for example, in raises concernsover the ability to define and measurediscretionary activities in the actualcorpoxate world.Aupperle,Carroll,and Hatfield(1985: 455) state that Carroll'sphilanthropic domainis '4difficult ascertainandevaluate."Strongand to Meyer conclude in their study that while there was strong supportfor the existence of the economic, legalS and ethical components of corporate social
RESPONSIBILITY SOCIAL CORPORATE
categoryto be removed for it responsibility, may be appropriate the philanthropic perceptionsof to when attempting measuremanagerial from Carroll'sframework responsi(philanthropic) They state:"Theresultsfor discretionary responsibility. perception the bility do not support survey'suse as a generalmeasureof managerial (1992: 92, emphasis of responsibilityof this componentof social responsibility" comfound supportfor a philanthropic have added).Althoughmanyresearchers suggest that its use as a distinct ponent,the concernsraisedby otherresearchers componentof CSR might be re-examined. In addition to ethical reasons, corporatephilanthropymight also be based primarilyon economic motives (Shaw and Post 1993: 748), often referredto as (Yankee 1996: 9-10). Whetherto "strategicgiving" or "strategicphilanthropy" increase sales, help improvepublic image or to improveemployee morale,corporate communityinvolvement or corporategiving to charitableorganizations can help sustain the bottom line for business in the long-term.When corporations engage in philanthropyfor these reasons, they are simply acting out of economic motives, based on their economic responsibility,as opposed to a distinct philanthropicobligation. Incomplete Development of Economic, Legal, and Ethical Domains Anotherissue with Carroll'smodel is the incomplete discussion and inclusion of criteriafor assessing corporateactivities or motives as falling into each of the domains, especially the legal and ethical domains. Carrollprovides little discussion of how corporationsmay engage in multiple domains other than by making safe toys would be complying sisuggesting that a toy manufacturer multaneouslywith its economic, legal, and ethical responsibilities(1979: 501). Such a cursorydiscussion limits the theoreticalfoundationthat is necessary to utilize the model for certainkinds of empiricalstudy and for teachingpurposes. The economic, legal, and ethical domains will now be expoundedupon. Economacdomain. Carrolldefines the economic domain of CSR as follows in (1991: 40A2): '4Perform a mannerconsistent with maximizing earningsper share,being as profitableas possible, maintaininga strongcompetitiveposition and high level of operating efficiency." It may be that this definition fails to capturecertain economic activities. The new model will clarify the economic domain below. Legal domain. Carroll'scategory of legal responsibility is defined as obeying or complying with the law (1979, 500; 1993: 33). The legal responsibilityis depicted as reflecting a view of "codifiedethics"in the sense thatlaw embodies basic notions of fairness as establishedby our lawmakers.It is stressedthatit is business's responsibility to comply with these laws. A broaderappreciationof the legal system and its influence on corporateactivities indicates a muchwider range of legally-based activities that ought to be discussed. For example, legality may be broken down into three general categories: (i) compliance; (ii) avoidance of civil litigation;and (iii) anticipationof the law. Each of these will be more fully discussed in the presentationof the new model.
ETHICS QUARTERLY BUSINESS
are or principles. on based their adherenceto a set of ethical or moral standards not broadly developed (1991: 41). definition of the ethical domain is Carroll's practices that are defines the ethical domain of CSR as any activities or He into law. They or expected prohibitedby society membersalthoughnot codified expectationsthat responsibilitieswhich "embodythose standards,normsor are and the coma reflect concern for what consumers, employees, shareholders, protection of regard as fair, just, or in keeping with the respect or munity are the moral rights."Superimposedon such ethical expectations stakeholders' by consideration"of the great levels of ethical performancesuggested implied (1991: 4042). Though principlesof . . . justice, rights,andutilitarianism" ethical discussed.In names the variousethical postures,they are not completely Carroll identifies the legal and ethical categoriesof though Carrollappropriately short, as they need to be he CSR, does not flesh them out as broadlyor as completely articulated. that The Ethicaldomain. ethical domainof CSR includes those activities
Model of CSR The Three-Domain
responsibilityarThe three-domainmodel of CSR is composed of the three categoriesaredefined eas:economic, legal, andethical. In general,these domain the exception that in a mannerconsistent with Carroll'sfour-partmodel, with and/oreconomic dothephilanthropiccategory is subsumedunder the ethical activities. mains,reflecting the possible differing motivationsfor philanthropic both in more completely in Further, our discussion, the domains are developed overlappingcategories termsof what each means or implies and in terms of the a Venn diagramforthatare identified when the three domains are depicted in that none of the mat. By using a Venn diagram,the model initially suggests facie more importhreeCSR domains(i.e., economic, legal, or ethical) is prima of the model's tant or significant relative to the others. Following a discussion will be presented.Figure 2 precomponents,a brief treatmentof its limitations sents the three-domainmodel of CSR.
model, the economic domain captures For the purposesof the three-domain indirectpositive ecothose activitieswhich areintendedto have eithera director it is similar to the nomic impact on the corporationin question. In this sense, is based on two disCarrollformulationof this component.The positive impact the maximizationof profitsand/or(ii) tinct but relatedcriteria(Poitras1994): (i) activities include the maximizationof sharevalue. Examplesof directeconomic Examplesof possible indiactions intendedto increase sales or avoid litigation. to improveemployee rect economic activitiesinclude activitiesthatare designed pursuedwith improvmoraleor the company'spublic image. Any activitythatis motivated. ing profits and/orsharevalue in mind is deemedto be economically
CORPORATE SOCIAL RESPONSIBILITY
Figure 2: The Three-Domain Model of Corporate Social Responsibility
/ ,4conomi \ Ethical/ \ \/
(vi) Le2\ \Ethical / /
/ (vii) Economic/\ Legal/Ethi:,</
(i) Purely \ (v)Economic/ / \ Economic \ Legal /
(ii) Purely / Legal /
It is to be expected that the vast majorityof corporateactivities will be economic in nature. However, there may be some activities that would not be included.A corporation'sactions would fall outside of the economic domainif (i) they are not intended to maximize profit (or minimize loss) when a more profitablealternativeexists, or (ii) they are engaged in without any real consideration of the possible economic consequences to the firm. In terms of the outcome or results, if the activity produces a decline in profits or share value, this may be an indicationof a non-economicmotive, but may also merely represent a flawed business decision (and the action would still be consideredto fall within the economic domain).
The legal category of CSR pertainsto the business firm's responsiveness to legal expectations mandatedand expected by society in the form of federal, state, and local jurisdictions, or throughlegal principles as developed in case law. In this context, legality may be viewed in termsof three generalcategories: (1) compliance, (2) avoidanceof civil litigation, and (3) anticipationof the law. The first legal category,compliance,can be furthersub-dividedinto threetypes: passive,restrictive, opportunistic. first type of complianceis of a pasand The sive or accidentalnature the companyis doing what it wants andjust happens to be complying with the law. For example, if the speed limit is fifty-five miles per hour and one drives at or below fifty-five miles per hour because one believes it is safer to do so and not because of the speed limit, one is passively
complying with the law. If there is a safety standard a certainproductthat a for companywould have adheredto even if the legal requirement not exist, the did companyis in a passive compliance mode. If the motivations of the corporation are being analyzed by the newly proposed model, passive compliance by the corporation,due to its unintentionalnature,would place it outside of the legal domain.This would be the case despite such motives being potentially labeled as legal underCarroll'sPyramidModel. If outcomes were being analyzed, the corporationwould fall within the legal domain even if it passively or accidentally complied with the law. The second type of compliance, referredto as restrictive compliance,occurs when a corporation legally compelled to do somethingthatit would not otheris wise want to do. If one is in a hurryand would like to drive sixty-five miles per hourbut one does not do so because of the fifty-five miles per hour speed limit, one is restrictavely or intentionally complying with the law. The payment of taxes, tariffs or duties is often done reluctantly and, therefore, restrictively. Although a company may want to pollute at higher levels or sell goods with fewer safety warnings,the law may prohibitit from doing so, leading to restrictive compliance. The adjective restrictive is used to reflect the idea that the legal system is limiting, constraining,or modifying otherwise intendedbehavior in a restrictivefashion. The third tyE>e compliance is that of opportunistic compliance. There are of two general modes of opportunisticcompliance. First, a corporationmay actively seek out and take advantageof loopholes in the legislation to be able to engage in certain activities. In such cases one typically finds that the corporation is abiding by the letter of the law but not the spirit of the law. Second, a corporationmay choose to operate in a particularjurisdiction because of its weakerlegal standards.In such a case, the corporationhas based its decision on Table 1: Examples of Legal Motives and Possible Responses
Type of Legal Motive Passive Compliance (Outside Legal Domain) Restrictive Compliance Typical Corporate/Managerial Response "Well, looking back on it, we did happen to comply with the law." "We wanted to do something else but the law prevented us." "We did it in order to comply with the law." "Well the law allows us to do it." 4'Weoperate in that jurisdiction because of the less stringent legal standards." "We did it because we might get sued otherwise." "Lawsuits will be dropped." "The law is going to be changed soon.' "We wanted to pre-empt the need for legislation."
Avoidance of Civil Litigation Anticipation of the Law
the legal system, and is still technically complying with the law. Corporations which decide to operate in developing nations because of less stringent environmental, employee-welfare, or consumer-protection legislation are opportunisticallycomplying with the law. The decision to test drive one's new sports car on a highway because of its higher speed limit entails opportunistically complying with the law. The decision has been based in this case on a considerationof the legal system. Carroll's treatmentof the legal domain appearsto embrace these types of legal motives althoughhe does not distinguishbetween or elaborateupon them. There are, however, other legal dimensions as well. The second general legal category, avoidance,relates to corporate activities that are motivated by the desire to avoid possible currentor future civil litigation for negligent conduct. In responseto such fears, corporations may,for example,disengagein the manufacture of dangerous products, voluntarily recall products, or cease non-environmentally friendlyactivities.Companiesthatact in ways despitebeing aware that they will most likely be sued as a result (e.g., for negligent activity) would fall outside of the legal domain, despite being in compliance with laws and regulations. Often these companies engage in a legal defensive strategy whereby they attemptto settle all lawsuits. The third legal category consists of the anticipation changes to legislaof tion. The legal process is often slow in nature, and corporationsmay wish to engagein activitiesthatwill resultin immediatecomplianceuponthe legislation's eventual enactment.Changes to legislation in otherjurisdictionsoften serve as an indication of forthcoming similar legislation in one's own jurisdiction. If laws are anticipated,companiesmay engage in voluntaryactivities to help prevent, modify, or slow down the pace of new legislation being enacted, and are thus acting based on a considerationof the legal system. Activities would fall outside of the legal domain when they take place despite (i) an awarenessof non-compliancewith the law, (ii) an awarenessof actual or potential civil negligence, or (iii) merely passive compliance with the law. Table 1 indicates examples of the varioustypes of legal motives and the typical responses one might hear from a corporation.
The ethical domainof the three-domainmodel refers to the ethical responsibilities of business as expected by the general population and relevant stakeholders.This domainincludes responsivenessto both domestic and global ethical imperatives. Based on this general definition, the three-domainmodel both broadensand refines Carroll'sconcept of the ethical domainby including only three general ethical standards: conventional;(b) consequentialist;and (a) (c) deontological. (a) Conventional standard: standardof conventions can be explainedby The the moralphilosophy known as ethical relativism (Pojman 1995: 31). The manner by which Carrolldefines the standard conventionsas noted above appears of
BUSINESS ETHICS QUARTERLY
to limit it to a concern for justice or moral rights. For the purposes of the new model, the standardof conventions will be defined as those standardsor norms which have been accepted by the organization,the industry,the profession, or society as necessary for the properfunctioning of business. Society is defined as embodying the corporation'sstakeholders,including shareholders,employees, consumers,competitors,suppliers,and the local community,in additionto general citizens. Societal norms can vary depending on one's reference point (i.e., different stakeholdergroups).To minimize this limitation, and to enhance the standard'spractical application,reference should be made to formal codes of conduct or ethics (e.g., organizational,industrial,professional, or international) to establish whether a company is acting ethically according to the conventional standard. Many objections and concernshave been raisedby philosophersto the use of relativism in providing a moral justification to the actions of an individual or organization.As a result, the conventionalstandardis relevantfor the purposes of the ethical domain with respect to only those formal codes of conduct or ethics thatremaingroundedin (or at least do not directlyconflict with) either or both of the ethical standards discussed below (i.e., consequentialist or deontological).This approach similarto those who suggest thatalthough"conis text matterswhen deciding what is right and what is wrong,"actions must still comply with a set of "minimumethical standards" (Donaldson 1996: 6-7). Personal standards are rejected as representing an ethical principle that is too relativistic and arbitrary stand as an ethical standard(De George 1986; Freeto man and Gilbert 1988; Pojman 1995). (b) Consequentialist standard: consequentialiststandard(sometimesreThe ferredto as "teleological")focuses on ends or consequences.Althoughthere are several types of consequentialism,the form that is relevant for the purposesof the ethical domainsuggests that "themorally right thing to do is to promotethe good of persons"(Hoffman,Frederick,and Schwartz2001: 26). In this respect, consequentialismincludes both egoism (promotingthe good of an individual) andutilitarianism(promotingthe good of society). Althoughegoism can be used as a moraljustification for the economic domain, only utilitarianismis considered relevant for the purposesof the ethical domainunderthe consequentialist standard. a result, an action is consideredethical accordingto consequentialAs ism when it promotesthe good of society, or more specifically, when the action is intended to produce the greatest net benefit (or lowest net cost) to society when comparedto all of the other alternatives(Velasquez2002: 75). (c) Deontological standard: deontological standard,as opposed to foThe cusing on consequences, is defined as embodyingthose activities which reflect a considerationof one's duty or obligation (De George 1999: 80). This category wouldembracetwo of Carroll'sethicalprinciples,moralrightsandjustice. Rights are defined as an individual's "entitlementto something"(De George 1986: 79) and can be of a positive or negative nature(Feinberg 1973: 59-61). Justice can be of several different types, distributive(whether benefits and burdenshave
been distributedequitably), compensatory,or retributive(Velasquez 1992: 90). Instead of only relying on the principles of moral rights andjustice, the threedomain model utilizes the category of deontological principles because it has the potential to more specifically capture a broaderrange of potential ethical justifications that have been suggested in the literatureas duty-basedin nature. Examples include: religious doctrine(see Herman1997; De George 1999: 80); Kant'scategoricalimperative(Kant 1988); Ross's primafacie obligations (Ross (i.e., honesty,integ1930); or more specific core values such as trustworthiness rity, reliability, loyalty); responsibility (i.e., accountability);caring (i.e., avoid unnecessaryharm);and citizenship (i.e., assist the community,protectthe environment)(Josephson 1997). Activities would fall outside of the ethical domain when they (i) are amoral in nature (i.e., with an unawarenessor indifference to the morality of the action), (ii) take place despite an awarenessthat the action conflicts with certain moral principles (i.e., are unethical), or (iii) are only intendedto producea net benefit for the corporationand not for the affected stakeholders(i.e., are only supportedby egoism) (De George 1986: 45; Freemanand Gilbert 1988: 72). Overlapping Domains model is the depictionof economic,legal, A majorfeatureof the three-domain whichhighlightsthe overin andethicaldomainsof responsibility a Venndiagram lapping natureof the domains and the resultantcreationof seven categories in which CSR may be conceptualized,analyzed, and illustrated.The ideal overlap resides at the centerof the model whereeconomic, legal, andethicalresponsibilities are simultaneouslyfulfilled, but otherpure and overlappingsegmentsof the model createsituationswhich also mustbe exploredand illustratedbecausethey representsituationsdecision makersmay face in the business world. the For purposes of better understanding model and for illustration,several examples entailing business ethics will be describedand categorized corporate as best falling within each of these seven CSR categories. The three-domain model is especially useful for analyses that focus on the forces that come into play in ethical decision makingas opposed to more generaldiscussions of CSR, where philanthropymight assume a more prominentrole. Each of the seven segments will be described and illustrated.It should be kept in mind that it is extremely difficult to identify examples that ideally and perfectly illustrateeach theoretical segment of the model. In spite of this, it is helpful to suggest examples that may very well fit and illustrate the tensions inherentin the various model segments. i) Purely Economic Activities which are purelyeconomic in naturemust have a director indirect economic benefit, be illegal (criminallyor civilly) or passively comply with the law, and be consideredamoralor unethical(otherthanbased on egoism, i.e., the activities Manyof the mosthighlycriticizedcorporate best corporation's interests).
BUSINESS ETHICS QUARTERLY
fall into this category. For example, Film Recovery Systems, a company involved in the extraction of silver from old x-ray film, failed to take legally required steps which would have prevented the death of an employee in the early 1980s. The employee died of cyanide toxicity despite the companyhaving been previously warned of its gross violations of worker safety standards (Reidenbachand Robin 1991: 276). Othercompaniesfalling within this domain by intentionally breakingthe law include General Electric, which engaged in illegal price fixing duringthe 1950s (Velasquez 1992: 199-206), and Lockheed Aircraft, which made secret payments to Japanese governmentofficials from 1972-1975 in order to obtain business (Velasquez 1992: 207-209). One could well argue that the recently revealed actions and decisions of Enron such as deceiving its stakeholdersby shifting debt from its balance sheet- -and Arthur Andersen orderingthe shreddingof documents- illustrate business decision making which took only the economic domain of responsibility into consideration (FinancialTimes 2002). Othercorporationsfalling within this category are passively complying with the law, but are acting unethically for economic motives. For example, Nestle continued selling infant formulain the third world, despite knowledge that the use of the productwas increasing infant mortality.Nestle was passively complying with the law and appearedto act based purely on economic motives (Velasquez 1992: 304). The Johns Manville Corporation appearedto be operating in this category when it "legally" allowed employees to continue working despite the company'sknowledge of the health hazardsof asbestos (Silverstein 1987). Chisso, a Japanese industrialcorporation,dischargedmercuryinto the ocean during the 1970s knowing it posed a danger to local residents, but remainingsecurein the knowledgethatits emission levels compliedwith Japanese governmentguidelines (Donaldson 1982: 1-2). The FordMotor Companycontinued to manufactureits Pinto model car duringthe 1970s despite knowledge of its dangerousdefect andknowing thatit would be sued as a result (Velasquez 1992: 110-114). More recently, Firestone, as well as Ford, appearsto fall within the purely economic domainbased on tire blowouts androllovers involving Firestonetires placed on Ford Explorers(Naughtonand Hosenball 2000). Tobacco companies may have fallen within this domain for decades, in knowingly producing and marketinga dangerousand addictive productwithout providingfull disclosure to smokers.Anothercorporateexample might include Dow Corning,which allegedly for economic gain "failed to fully apprisewomen of the known risks of breast implants,"irrespective of the obligations stipulated in its own code of ethics (Byrne 1996: 10). This category could relate to what Reidenbach and Robin (1991: 275) call the "amoral" corporation,meaninga corporation unconcerned about the law or ethics, or what Carroll terms "amoralmanagement" (Carroll 1987: 9).
ii) Purely Legal Corporateactions that are not consideredethical and have no direct or indirect economic benefit fall into this category.The activity musttakeplace because of the legal system and not in spite of it. A response that one of the reasons for the act was "becauseit's the law" might be enough to supporta degree of consideration for the legal system. Very few activities can be considered purely legal as most activities that are consideredlegal are also consideredethical. In addition, most activities which are legally requiredalso possess an economic incentive (Posner1986). Companiesthathesitantlyplace warningson theirproducts (e.g., tobacco manufacturers),or abide by holiday shopping legislation despite financial loss, could conceivably fall into this category. The activities of Napster, at least in its early stages, may fall within this domain, in that its actions were legal, yet not intendedto producerevenue and undertakendespite the ethical concerns raised. The founder, Shawn Fanning, establisheda website allowing users to sharemusic files. The programwas given away for free and users were not chargedanything,and thus the initial actions of Napster fall outside of the economic domain. Fanning argued that Napster "was not doing anythingillegal," andin this respecthe appearsto have opportunistically taken advantageof the law (althoughthe service was later declaredto be legally problematic).Fanningappearedto be acting despite an awarenessof the ethical concerns, in that the service was providingits users with the opportunity to infringe copyright(a violation of moral rights) held by musicians and music companies (Velasquez2002: 61-63). iii) Purely Ethical Any purely ethical activity that has no direct or indirect economic or legal implications would fall into this theoretical category. Such activities are performedbecause they are consideredethical based on at least one moralprinciple (e.g., conventions, deontological, consequential)despite their lack of positive activities thatarenot based philanthropic economic impact.Otherthancorporate on economic interests, few corporateactivities currentlyfall into this category. The primaryreasonis thatmany activities that are consideredethical can somehow be linked to long term, indirect economic benefits. A number of corporateexamples falling within the purely ethical domain may be suggested, however. For example, 3M's decision to retire its pollution creditsdespiteeconomic loss mightbe viewed as a purelyethical activity(Carroll 1993: 343). When Sir Cadburydecided to honour a contractto supply English soldiers in the Boer Warwith chocolates at cost (indicatinga passive or neutral economic motive), despite his personalopposition to the war, he was making a purely ethical decision (Cadbury1987; Reidenbachand Robin 1991). Restaurant chain Chick-fil-A, which does not operate on Sundays, is abiding by a religious deontological principlewhile forgoing additionalrevenue, and can be considered purely ethical (Zigarelli, 2000). Although debatable,the act of immediatelyrecalling millions of bottles of Tylenol in 1982 by Johnson& Johnson
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uponbeing informedof several deaths,despite facing significanteconomic loss, appearsto have been based on ethical motives alone due to its corporatecredo that placed the safety of the users of its productsbefore stockholderinterests (Davis and Frederick 1984:549-560; Reidenbach and Robin 1991: 280). The decision by Levi StraussandTimberland 1993 to in pull out of Chinain protest of human rights abuses, despite the loss of potential profits, appearsto place these companies within this category (Kaltenheuser1995: 21). Merck and Co. engaged in an ethical act during the 1980s by developing and distributingfor free a pill curing millions of people living in developing nations of river blindness, despite an awareness that no sales revenue would be generated (Bollier andWeiss 1991). In the final analysis, it is difficult to find and defend corporate practicesor decisions that illustratepurely ethical motives because it is impossible to fully know all the motives that went into a decision and the resulting consequences. iv) Economic/Ethical In this category the corporateactivity is not based on legal considerations, but ethical and economic simultaneously. is This category would include many corporate activities motivatedby the often repeatedmaxim, "goodethics is good business." be consideredethical, the activity must To go beyond rationalegoisticconcerns and be based on conventionalist, consequentialist,or principles. Virtuallyall activities in this category will involve deontological passive compliancewith the law because almost all illegal activities would be considered unethical. Corporationswhich give to charity for both economic and ethical reasons (Carroll1993: 382) would fall within this category. Corporations the in environmental sector (Smith 1990), the "social"or "environmental" mutualfund industry (Ellmen 1996; Lowry 1991), or involved in the sale of "green"products, as The Body Shop (Shearer1990), can such be considereddirectlyeconomic while simultaneouslyethical. The decision by StarKist,a unit of H. J. Heinz, to use dolphin-safe nets (Rice 1990), or 3M's introductionof a waste-reduction program (Carroll1993: 356), could be consideredethical while providingindirect economic benefits. Following a severe fire destroying several of its factory buildings, textile manufacturer Malden Mills remained in Massachusettsand continued paying its employees their wages and health benefits until the factories were rebuilt, despite legal obligation to do so. The CEO of no Malden Mills appearedto be acting the basis of both ethical (i.e., on deontological) and indirect economic reasons retainingquality employees, (e.g., improvingmorale and productivity, etc.) (Teal 1996). Many "social marketing"activities fall within this domain. For example, in describing & Jerry'spolicy of giving away free Ben ice cream,the formerCEO describes simultaneousethical and economic the motivations:"Themotivation for giving back had always been genuine.At the same time, it was provingto be an effective marketingstrategy.There was no doubt that our customers were
more inclined to buy our ice cream and supportour business because of how we, in turn, supportedthe community"(Lager 1994: 126). This domain would probablycontain a high level of corporateactivity and might be equated with Reidenbachand Robin's (1991) "emergentethical"corporation,which they describe as a corporationin which management"actively seeks a greaterbalance between profits and ethics" (1991: 279). v) Economic/Legal Very few activities which corporationsengage in are both economic and legal, while also consideredunethical.The reasonis thatactivities which arebased on a concern for the legal system (i.e., restrictive compliance, avoidance of civil litigation, or anticipationof the law) would most likely be consideredethical as well. The exception might be those companies that opportunistically loopcomply with the law, searchingfor andusing legislative andadministrative for economic gain. Such opportunistic activities are often considered holes unethical. For example, althoughthe use of bankruptcylaws is not inherently unethical, and can sometimes lead to the saving of jobs, some companiesmight try to use such laws in an opportunisticmannerthat can be consideredethically Dow Corninghas been criticized for using protectivebankruptcy inappropriate. laws to avoid massive litigation due to its breast implants (Reisch 1994). The protection Canadianretailing giant Eaton's was criticized for using bankruptcy in a mannerwhich was not ethical (Brooks 1997: 1). Othercompanies operatein thirdworld countriesbecause of lower environworkersafety (i.e., "social dumping"),or product mental (i.e., "eco-dumping"), safety standards(Brooke 1995: B8; Nicholson 1997: 292). By doing so these takingadvantageof the law. Forexample,Union companiesareopportunistically by Carbideacted opportunistically operatinga pesticide plant in Bhopal, India, accordingto India's relatively weak legal safety standards,despite operatinga similar plant in the U.S. accordingto much more stringentstandards.As a result, a poisonous leak in 1984 led to the deaths of over 2,500 people and the injuries of 300,000 others (Trevino and Nelson 1995:188). An example of restrictivelegal compliance would be a company abidingby a country'sboycott for economic gain such as Pepsi's refusal to sell its product to Israel in orderto maintainits sales in Arab countries(Reingold and Lansing 1994). Companies operatingin China such as ChryslerCorporationare being askedto obey laws thatoften deny basic freedomsto Chinese citizens. Although such companies may prefer not to obey such laws, they do so because of their desire to continuedoing business in the country(Freemanand Gilbert 1988: 37; Kaltenheuser1995: 20-23). All of the above activities might be consideredunethical, economic, and legal in the opportunisticor restrictivecompliance sense. This categoryis similar to Sethi's (1979: 65) "social obligation"corporation,inwhichcorporatebehavReidenbachandRobin's ior is "inresponseto marketforces or legal constraints," (1991: 276) "legalistic"corporation,in which managementis preoccupiedwith
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compliancewith the letter of the law, or with Carroll'sconcept of "amoralmanagement"(1987: 11). Unlike Reidenbach and Robin's approachhowever, the three-domainmodel would not consider a corporationwhich merely passively complied with the law to be a legalistic corporation. vi) Legal/Ethical Certaincorporateactivities occur not because of any economic benefit, but because they are both legally required and ethical. Activities that are both ethical and legal often provide indirect economic benefits meaning that few corporate activities will fall into this category. The activity of installing an anti-pollution device because it is legally required (i.e., restrictive compliance) and considered ethical even if there is no long term economic benefit would fall within this category. The decision by GeneralElectric to finally supportthe cost of dredgingthe Hudson River of PCBs that were released by the company decades ago (at a time when it was legal to do so) might indicate a shift from the purelyeconomic domainto the legal/ethical domain.The companyappearsto be respondingdue to legal pressures,from both the U.S. governmentas well as civil lawsuits. The decision may also reflect a recognition by the company that the action is morally requiredbased on a past injustice, regardlessof the additionalcost that is required(Hudsonvoice 2002). The pharmaceuticalcompanies that are providing HIV/AIDS drugs at below cost (i.e., non-economic) to African countries might also be considered to be acting ethically (CNN 2000). At the same time their actions also appearto fall within the legal domainin that these companies are tryingto avoid patentinfringementlegislation being enactedthatwould permit generic manufacturers make the same drugs (DeYoung 2001: A13). The to example of Smith & Wesson adding safety features to its handgunsappearsto have been based on ethical motives (i.e., the CEO arguedthat the decision was "the right thing to do") and legal motives (i.e., avoidance of governmentlawsuits). The decision was taken despite harshcriticism from the gun industryas well as consumers,placing it within the legal/ethical domain (Paulson, 2000). vii) Economic/Legal/Ethical An activity which is motivatedsimultaneouslyby the bottom line, the legal system, and ethical principles would fall into this category. The decision by Procter& Gambleto pull its Rely tamponsfrom the shelves due to the potential link with toxic shock syndromemay have been motivatedby all three CSR domains (Reidenbach and Robin 1991: 278-279). Wal-Mart'sdecision to stop selling cigarettesin its Canadianstores appearsto have been motivatedby economic concerns (e.g., public relations), anticipationof changes to legislation, and ethical concerns (Heinzl 1994). This category conformsto Carroll's"moral management,"accordingto which managementdesires "profitability, only but within the confines of obeying the law and being sensitive to ethical standards" (1987: 10). It also conforms to Lynn SharpPaine's "integritystrategy"(Paine
1994). Paine's integrity strategyenvisions ethics as the driving force in the organization althoughprofits and legal obedience are obviously relevant factors. Carrolland Buchholtz arguethat caution is needed in many of the overlapping segments of economics, law, and ethics, but in this centralsegment the management recommendation is to "go for it," because all three categories of responsibility are met (Carroll and Buchholtz 2003: 175). From a normative is point of view, this centralsegment(economic/legal/ethical) wherefirmsshould seek to operatewheneverpossible, or in the economic/ethicalsegment (as long as the companyis passively complying with the law). Figure 3 provides a summaryof a numberof corporateexamples discussed above andwhere they would be situatedwithin the three-domainmodel.
Figure 3 The Three-Domain Model of Corporate Social Responsibility: Corporate Examples
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Limitations the Three-Domain of Model
Though the proposed model addresses some of the issues raised with the Carrollfour-part construct,therealso arelimitationswith the three-domain model that should be stated. The following reflects some of the importantconcerns. The new model is based on several majorassumptions.The model assumes that the three domains of CSR are somewhat distinct, and that they are all-encompassing.In termsof being somewhatdistinct, some might question whether any action can be identified as "purelyeconomic," "purelylegal," or "purely ethical."In other words, one might arguethat economic, legal, and ethical systems are all interwovenand inseparable.Although our model attemptsto create distinctionsthroughthe establishmentof the "pure" domains,it shouldbe noted that each of these three domains is only "pure"in certain respects. There will still be an overlap with the other domains at least to some extent. For example, a "purelyeconomic" action can still be in accordancewith the law (althoughnot intendedto) and could still be supportedby the ethical standardof egoism (i.e., in the best financialinterestsof the corporation). "purely A legal" action, even if restrictivein nature,would still involve economic consequences (such as a loss to the corporation)and would still be supportedby the ethical standard culturalrelativism.In fact, many arguethat"businesseshave of a moral obligation to respect legitimate law" (Orts and Strudler2002: 226). A "purelyethical"action will still have economic consequences (e.g., negative or break-even) and will still either be passively legal or illegal. As opposed to egoism or cultural relativism, however, the action will be supportedby other conventional, consequentialist,or deontological moral principles. In terms of the three-domainmodel being all encompassing, it is not clear whetherthere are corporateactivities which are engaged in withoutreferenceto at least their economic impact, the legal system, or ethical principles. If there are such activities, the model would have to be adjustedto account for them. It is our assumption, however, that the model embraces all relevant aspects of CSR. It is also assumed that philanthropicactivities, assumed to be a separate category in the Carrollmodel, would be seen as part of the ethical and/oreconomic categories in the three-domainmodel. The inherentlyconflicting natureof the various ethical principles could result in seriousdifficultiesin attempting classify motives or activitiesas ethical. to For example, activities such as affirmativeaction and insider tradinghave received significant debate as to their ethical nature. There may also be other ethical considerationswhich should be included in the ethical domain, such as moral character(Solomon 1992). These problems are continuously faced by business ethics academicswho continueto strugglewith methodsto resolve the often conflicting principles (Derry and Green 1989). The complications of internationalbusiness confound both the ethical and legal domains in terms of which ethical and legal standardsto apply. For example, if the motivations of a multinationalcorporationare being evaluated,
should the standardsof the home countrybe considered,or the host countryin which the corporationis operating?The use of the opportunisticlegal compliance category and the conventions ethical category address most of these concerns. In such instances, the company is often operating within the legal domain by opportunisticallycomplying with the law, and could be acting ethically basedon nationalconventions.Otherethicalprinciples,such as moralrights or utilitarianism,may be violated in such cases, however. The complexities of internationalbusiness ethics continue to be addressed by numerousbusiness ethicists (e.g., De George 1993; Donaldson 1989; DonaldsonandDunfee 1999). Finally, it is expected that certainCSR categories (e.g., purely legal, purely ethical, and economic/legal) will rarely apply, thus limiting the conceptual or practicalapplicationof some segments of the model. The majorreason for this is due to the presumablyhigh correlationbetween activities that are both economic and legal, and those that are both legal and ethical. The fact that some reasonableexamples can still be providedfor each of the seven CSR categories, however, suggests that all of the categories shouldbe includedin the conceptual framework,even though several of them will be less importantfrom a practical applicationpoint-of-view. Implications for Teaching and Research The three-domainmodel should be useful both for teaching and researchin fields. As a conceptualmodel, the businessethics andsocial issues in management its primaryusefulness will be in the realm of pedagogy helping othersto conceptualize the components of CSR and the nuances involved in their and understanding application.From a researchstandpoint,the model creates a definition and overlappingsegments that may be furtherexplored.Following is a brief discussion of each of these areas. Teaching Social Issues in Management and Business Ethics methods for teaching business There is an ongoing debate as to appropriate and and society, social issues in management, business ethics. It is proposedthat the model of CSR providesa scheme for conceptualizing major the three-domain issues in one or more of these literatures.Once the model is describedand discussed in some detail in a classroom setting, studentscan apply the model by can engaging in practicalexercises. Instructors provide or ask studentsto find in the generalor business media which discuss a certaincorporatedeciarticles sion or activity. The activity can then be classified by the studentor groups of students.This can lead to class discussions on whetherstudentsagree with the actingin its chosenmanner. classificationandthe implicationsfor the corporation The model helps to classify many of the majorcase studies which have been presented in business ethics literature, for example, the Ford Pinto, Johns Manville and asbestos, Johnson& Johnsonand Tylenol, Procter& Gambleand the Rely tampon,Union Carbideand Bhopal, and the activities of Ben & Jerry's
and The Body Shop. Studentscan debate, for example, whetherit is really the case thatJohnson& Johnsonshould fall within the purely ethical domain.Were there not economic or legal motives as well for their actions? Has Ford shifted out of the purely economic domain following its Pinto disaster with respect to its actions involving Firestone tires? What activities of Ben & Jerry's or The Body Shop might be considered purely ethical, if any? The model can also be used as a measureof testing students'understanding the different CSR doof mains by providingpast or currentexamples of corporateactivities and asking studentsto justify theirclassiElcations the exampleswithinthe CSR framework. of In a related vein, the model should be valuable in the process of analyzing case studies in a classroom setting. The three-domainmodel assists the student in identifying and analyzing the competing forces at work in a business decision and in assessing the relative mix of economic, legal, and ethical forces and motivationsthat are at work and ought to be at work. In this context, the model helps the studentto describe and understandwhat is going on and also from a normativeperspectiveto suggest what ought to be takingplace. Thus, the model has both diagnostic and normativeproperties. Although it is not being proposedthat the three-domainmodel provides definitive answers to the following questions, the model may provide a useful constructfor beginning to engage in many of the majordebates, such as: What is corporatesocial responsibility? Should it involve dimensions beyond economic, legal, and ethical responsibility? What is the relationship between economics, law, and ethics?Are they ever distinct?Why should corporations be socially responsible? How does one determine social responsibility? Should philanthropybe considered a distinct social obligation of business, or consideredto be subsumedunderethical and/oreconomicresponsibilities? Whatshould be included in the ethical domain?Should companies avoid actions when they know they will be subjectedto lawsuits as a result?Whatexamples demonstrate that good business ethics is good business? Are there examples of good business ethics being bad business? What is more important,the motivations of companies or the results of their activities and practices? The model might also be used to help analyze and discuss growing trendsin the business and society field including:business ethics, corporatecitizenship, social investment, social auditing, sustainability,triple bottom-line, social- or cause-relatedmarketing,strategic philanthropy,and stakeholdermanagement. Each of these concepts involves, to some extent, aspects of economics, law, and ethics (including societal impact), such that the three-domainmodel might provide an initial frameworkto betterunderstand these new developmentsandtheir relationshipto each other. Research Implications In additionto teachingapplicationsandimplications,the three-domain model could be used in a variety of ways with respect to empirical research. Three future research uses of the model include: (1) the development of a research
instrumentfor measurementof CSR and its componentdomains, (2) use of the and model and instrumentto develop CSR "portraits," (3) use of the model and instrumentto investigate futureresearchquestions. Development of a Research Instrument.The three-domainCSR model, as presented,representsthe conceptualizationstage in the researchprocess. In this stage, the meaning of the concepts to be studied was described.Two additional of decisions needed in the researchprocess include operationalization the variables under considerationand choice of research method to be used (Babbie 1992: 104). The most logical next step in future researchwould be the operationalizationof the variablesandthe creationof a valid andreliabledatagathering instrumentby which data regardingthe model could be gathered.Then, this researchinstrumentcould be used primarilythroughsurvey research. It is beyond the scope of this paper to present a research instrumentthat model. This is a task of would enable the measurement CSR in the three-domain for futureresearch.In general terms, however, we can describethat it would be composed of several partswhich operationalizethe economic, legal, andethical domains. These could then be used individually to pursue research questions role in CSR, theirrelationshipswith othervariables, concerningtheir particular of or collectively as an overall measurement CSR. This procedurewould follow the patternestablishedby Aupperle(1984) in his researchinstrumentdesigned to collect data on Carroll'sfour categories of CSR. That instrumenthas been used in many empirical studies of CSR and it is anticipatedthat the research instrumentpatternedafter the three-domainmodel would likewise be useful in exploring a numberof interestingand importantresearchquestions. Development of Corporate Social Responsibility tCSR) "Portraits." Once the research instrumentis developed, one objective might be to establish the emphasis respondentsplace on each of the CSR domains (including overlapping domains). Once this takes place, "CSR Portraits" (i.e., graphical of representations one's CSR prioritizations)might be generatedfor whichever entity is being analyzed (e.g., individuals, stakeholders,corporations). Individualemployee CSR Portraitscould be aggregatedtogetherto generate a CSR Portraitfor a functional area or a company as a whole. CSR Portraits could also be established for stakeholder groups based on the domains they or CSRPortrait) would emphasizing("actual" is believe the corporation currently could Portraits CSR Portrait). to preferthe corporation operatewithin ("desired" also be created for the corporation'sBoard of Directors, subsidiary corporations, orjoint venturepartners.If CSR Portraitsare obtainedfrom several firms in a specific industry,it may be possible to constructan industryCSR Portrait by weighting each firm's portraitby its marketshareor otherfinancialmeasure, andthen aggregatingthem together.For instance, a CSR portraitfor the tobacco industrymight look very differentfrom a CSR portraitfor the toy industry.Figure 4 provides a possible way to depict CSR Portraitsof a hypothetical toy company. The greater the emphasis placed on a given domain, the larger the area which will be depicted in the CSR Portrait.
BUSINESSETHICS QUARTERLY Figure 4 Corporate Social Responsibility "Portraits"
Economic Orientation Orientation Ethical Legal OrientationBalanced Orientation (e.g., ofAcme Co.) (e.g., Dept.) CEO Toy Legal (e.g., Consumers' (e.g., Industy) Toy "Desired" Toy Co.)
Investigating FutureResearch Questions. three-domainmodel of CSR The might be used to furtheranswera numberof possible researchquestions. Some possible researchquestions include:
1. What aspects within each of the three domains are, or should be considered, more importantrelative to each other (e.g., profits vs. share value; legal compliance vs. avoid civil litigation vs. anticipate law; conventions vs. deontological vs. consequences). 2. To whatextent do corporateactivities fall withineach of the seven CSR categories? 3. Are corporate examplesused in teachingbusinessmoreprevalentwithin certaindomains? 4. Is there a difference between those corporateexamples used in business ethics courses as opposed to other business school courses with respect to the domains?If there is a difference, might this have an impact on students'perceptionsof the responsibilitiesof business? 5. Do corporationstend to shift from one domainto another(i.e., change their emphasis) following a significant corporatescandal? 6. Do studentstend to shift their preferencefrom one domain to another after taking a business ethics or social issues in managementcourse? 7. Do corporateemployees tend to shift theirpreferencefrom one domain to anotherfollowing legal compliance or ethics training? 8. Is CSR performance(i.e., acting within certain CSR domains such as the economic/legal/ethicalcategory)associatedwith firm financialperformance?Does it lead or lag financialperformance? (CSRperformance is also referredto as CSP corporatesocial performance).
Futureresearchcan be greatly facilitatedfollowing the three-domainmodel. One issue is the creation of an instrumentdesigned to measure CSR and its component domains. A second issue is the possible creation of CSR Portraits using data gatheredvia the researchinstrument. thirdissue is the exploration A of existing and future research questions. With the creation and testing of a researchinstrument,the researchprocess will be greatly advancedas a number of differentpopulationsand samples may be studied.
CORPORATE SOCIAL RESPONSIBILITY
The proposedmodel, the "Three-Domain Model of CSR,"extrapolatedfrom the foundationalwork of Carroll, is proposed as an alternativemeans of describing CSR activity and orientationswhich pervadethe business community. The proposed model eliminates the separate philanthropiccategory and subsumes it within the economic and/or ethical spheres. It is considered that this treatmentmore appropriatelydepicts the placement of philanthropy,particularly for business ethics applications.It is proposed that the new model more completely and accuratelyportraysthe relationshipsbetween the three central CSR domains:economic, legal, and ethical. The three-domain model also helps eliminate the inherentassumptionof a hierarchicalrelationshipamong the domains which some perceived in Carroll's pyramidal depiction of CSR. The broadeningof the domains' descriptionsprovides a more complete constructby which to better classify corporateactivities. One of the difficulties faced by researchersis the ability to properly classify corporationsand their activities within a CSR construct(Clarkson1995: 96). The new model is intendedto provide a more appropriate meansandtheoreticalframework which to categorize by CSR activities. It is anticipatedthat as corporatemanagers and business students reflect on corporateactions and wherethey shouldbe classified within the three-domainmodel, an improved understandingof the relationship between business and society and more specifically between economics, law, and ethics, might take place.
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