MODELS AND FRAMEWORK

OF SOCIAL RESPONSIBILITY
for Business Ethics and Social
Responsibility Senior High School (ABM)
Quarter 2 / Week 4

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 FOREWORD

This Self-Learning Kit for Business Ethics and Social

Responsibility is an innovative tool designed specifically
for ABM students in the Senior High School for them to
have a better understanding about the framework of
social responsibility that reflects the practice of sound
business.
It is aligned with the BEC of the Department of
Education following the prescribed MELCs (Most
Essential Learning Competencies.

This Self-Learning Kit is divided into three parts.

What happened?
This section contains pre-activities that serve as the
beginning point and a pretest to determine if students are
sufficiently prepared to begin a new course of study.
What You Need to Know? (Discussion)
This section contains contents on the framework of social
responsibility that reflects the practice of sound business. The
topic intends to make the students appreciate the importance
of staffing in the business organization.
What Have I Learned? (Evaluation/Post Test)
A summary of key concepts and exercises that measures
student’s understanding on the framework of social
responsibility that reflects the practice of sound business.
Students are expected to develop their skills and apply what
they have learned, as these will influence the kind of leader
they will become in the future.

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 OBJECTIVES:
K. Identify the models and framework of social
responsibility;
S. Discuss the framework of social responsibility; and
A. Formulate a framework of social responsibility that
reflects the practice of sound business.

I. WHAT HAPPENED

PRE- ACTIVITY

Directions: Read and analyze the quotes on social responsibility by

famous personalities and write your comments after every quote.

1. “We have a social responsibility, a constitutional opportunity and a moral obligation to help othe
Janie Lewis

Comment: _
_
_
_
_

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 2. “Corporate social responsibility is measured in terms of businesses improving conditions for t
Klaus Schwab

Comment:

3. “Together with the social responsibility of business, there is also the social responsibility of cons
Pope Francis

Comment: _

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PRE-TEST:
Direction: Read the selection below. Answer what is ask and write your
answer on your notebook.

Social Responsibility amidst COVID-19

A virus called COVID-19 started out in China which spread all over the
world causing the lives of people and became the concern of the world
today. No vaccine has been developed yet to protect people. The
economy of each country has been affected. Businesses have shut down
and jobs have been lost. This is a crisis that needs the response of both
the government and the corporations.

Guide questions:
1. How do large corporations can help during health crisis?
2. Suppose you are an entrepreneur. How will you redesign your social
responsibility while the country is experiencing a health crisis?

II. WHAT YOU NEED TO KNOW

Business ethics is sometimes confused with corporate social responsibility or CSR. Alth

DISCUSSION
Social responsibility is an ethical framework and suggests that an
individual has an obligation to work and cooperate with other individuals
and organizations for the benefit of society at large. Social responsibility
is a duty every individual has to perform so as to maintain a balance
between the economy and the ecosystems.
https://en.wikipedia.org/wiki/Social_responsibility#:~:text=Social%20responsibi
lity%20is%20an%20ethical,benefit%20of%20society%20at%20large.
Social responsibility is a means of achieving sustainability. Adopting
key social responsibility principles, such as accountability and
transparency, can help ensure the long-term viability and success of any
organization or system. https://asq.org/quality-resources/social-responsibility

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 The phrase corporate social responsibility refers to a corporation’s
responsibilities or obligations towards society. CSR, as defined by the
World Business Council for Sustainable Development (WBCD), is a
continuing commitment by business to behave ethically and contribute to
economic development while improving the quality of life of the workforce
and their families, the local community, and society at large.” (Racelis,
2017)

According to Friedman’s shareholder view of corporate social

responsibility, a manager has no right to give company money to social
causes when doing so will reduce shareholder’s profits because that
money does not belong to the manager but to the shareholders. (Racelis,
2017)

What is Carroll’s Pyramid of Corporate Social Responsibility?

Pyramid of Corporate Social Responsibility is a simple framework

that argues on the aspect that why organizations should meet their
corporate social responsibilities. The pyramid was developed by Archie
Carroll and highlights on the four main responsibilities of the organization,
namely, Economic, Legal, Ethical, and Discretionary or Philanthropic.

4 Components of Carroll’s Pyramid of Corporate Social Responsibility:

 Economic – For the business to survive on a long-term basis and
benefit the society, the first responsibility of the company is to gain
profits.
 Legal – It is imperative for the company to obey and adhere to the
laws and regulations related to the nature of its business,
competition, employment, and health and safety among others.
 Ethical – It is important for the company to act on the grounds of
ethics and morals in society and should also go beyond the narrow
requirements of the law and order.
 Philanthropic – It is the responsibility of the company to give back to
society. This facet of responsibility holds an important place even
though it is discretionary in nature. (https://www.marketing91.com/what-is-
carrolls-pyramid-of-corporate-social-responsibility/ )

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Understanding the Four Levels of CSR

Understanding CSR through Carroll's Pyramid

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 fulfill

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.

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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.
https://thecsrjournal.in/understanding-the-four-levels-of-csr/

Three Models of Corporate Social Responsibility

Three Basic Models of CSR: Relationships between Domains of Responsibility.

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 As Bacharach pointed out, “A theory is a statement of relations
among concepts within a set of boundary assumptions and constraints.” A
comparative analysis of the three conceptual models will show that the
same terminology represents different meanings and different approaches
to CSR. More specifically, the comparative analysis will demonstrate that
the nature of CSR, its underlying boundary assumptions, the
methodological tools, and the performance assessments are both the
cause and the consequence of how the relationship between its elements
is understood. Analysis of the differences in the conceptual structure
across the three models (see Table 1) may assist in clarifying ambiguity in
CSR theory and research through explicating the implicit assumptions by
which each is bounded, unraveling inconsistent findings on the social
impacts of corporate behavior, and removing impurities in managerial
decision making.

Table 1. Comparison of Three CSR Models

CSR Pyramid Intersecting Circles Concentric
Circles
General Hierarchy of Nonhierarchical set of Integration of
Description separate intersecting responsibilities;
responsibilities responsibilities all sharing a
central core
Theoretical Assumptions
Nature of CSR Normative restraints Classification framework; Incurred
of responsiveness no normative guidance obligation to
work for social
betterment
Scope of Narrow split Wide
Responsibilities
Total CSR Conjunction Disjunction Integration

Order of Hierarchy; No prima facie order Inclusion

importance Economic system;
responsibility first economic
circle at the
core
Role of “Icing on the cake” Subsumed under Integral part
Philanthropy economic/ethical of CSR
responsibilities

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THE PYRAMID OF CSR

General Description
A leading model of CSR is Carroll's four‐part pyramid. The CSR
pyramid was framed to embrace the entire spectrum of society's
expectations of business responsibilities and define them in terms of
categories. According to the model, four kinds of social responsibilities
constitute total CSR: economic (“make profit”), legal (“obey the law”),
ethical (“be ethical”), and philanthropic (“be a good corporate citizen”).

Theoretical Assumptions

Nature of CSR Taking a managerial approach, the four‐part pyramid

defines CSR in terms of social expectations that responsible corporations
should strive to meet. Prevailing social norms and expectations provide
external criteria against which corporate performance can be measured;
thus, the notion of responsibility in the pyramid model is reduced to
normative restraints of responsiveness. In other words, CSR in the
pyramid formulation is basically accommodative. Suggesting that
businesses should treat CSR not as a goal to be maximized but as a
constraint, the pyramid does in effect promote satisfying behavior rather
than striving for excellence.

Scope of responsibilities Understanding CSR as an array of separate

domains naturally leads to narrow definitions of the different
responsibilities. The ethical domain is further separated from the legal
domain using a negative definition: ethical responsibility relates to those
social expectations and norms not yet codified into law. In the same vein,
philanthropic responsibility designates those areas of voluntary social
involvement not specifically prohibited or demanded of companies
because of their economic, legal, and ethical responsibilities.

Total CSR The pyramid is a conjunction of separate domains of

responsibility. In contrast to the ordinary view, the so‐called separation
thesis, that businesses can focus either on profits or social concerns but
not on both, the CSR pyramid “sought to argue that businesses can not
only be profitable and ethical, but they should fulfill these obligations
simultaneously.”

Order of importance If the four responsibilities taken together

constitute a whole, what is the meaning of the decreasing order of
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importance? A number of explanations have been offered to answer this
question: (1) the

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pyramid suggests a ranking of CSR priorities based on the level of
essentiality—the most fundamental is economic responsibility, of smallest
importance is the philanthropic category, which is a sort of “icing on the
cake”; (2) the pyramid characterizes the social pressures imposed on the
business sector in decreasing order of their strength—whereas economic
and legal responsibilities are required of business and ethical practices are
expected, philanthropic contributions, albeit desired, are voluntary; (3)
the hierarchy of importance “simply suggest[s] the relative magnitude of
each responsibility”; and lastly, (4) the four categories “are ordered in the
figure only to suggest what might be termed their fundamental role in the
evolution of importance.

The role of philanthropy The role of philanthropy has been discussed

in the context of the CSR pyramid from two perspectives: inwards—as
compared to other components of CSR, and outwards—as compared to
other notions of CSR. Inwards, the question arises whether the
philanthropic category can be correctly considered a responsibility in
itself. Looking outwards, philanthropy is often regarded as the defining
component of CSR. Milton Friedman's statement that management is to
make as much money as possible within the limits of the law and ethical
custom embraces three components of the CSR pyramid—economic,
legal, and ethical.

THE INTERSECTING CIRCLES MODEL OF CSR

General Description
A pyramid framework cannot fully capture the interpenetrating
nature of the CSR domains, nor does it denote all possible tension points
among them. Such mutuality has been recognized as an integral
characteristic of CSR and of such fundamental importance that Schwartz
and Carroll saw it necessary to propose an alternative approach to CSR,
one that includes the major domains of responsibility and clearly depicts
their interrelationships. The IC model refutes the notion that CSR is nothing
but a collection of contingent, externally related topics; it holds rather
that the different responsibilities are in dynamic interplay with each other,
and it is the overall corporate responsibility to advance harmony and
resolve conflicts between them.

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Theoretical Assumptions

Nature of CSR The IC model seems to be primarily intended as

a descriptive model of CSR, not a normative model. A major feature of
Schwartz and Carroll's version of the model is the depiction of the main
domains of responsibility in a Venn diagram, which highlights the
overlapping nature of the domains and the resultant creation of a set of
CSR categories in which corporations and their activities may be
described, classified, and analyzed. As a descriptive model, it permits CSR
to be seen not as something that is implicitly good in itself, but as a
construct that must be used in conjunction with explicit values about
appropriate business–society relationship. Put differently, the categories
of CSR should not be thought of as normative standards, but as analytical
forms to be filled with the content of explicit values preferences that exist
within a given cultural and organizational context.

Scope of responsibilities The depiction of a three‐domain CSR in a

Venn diagram creates eight sections: seven inner and one outer. Let us
label the three different responsibilities, economic, legal, and ethical
(moral), “E,”“L,” and “M,” respectively.

The creation of pure and mixed classes of responsibilities in the

framework of the intersecting circles raises concerns about the definition
of the boundaries of CSR. CSR scholars gave different answers to this
question. According to Schwartz and Carroll, CSR is composed of all seven
inner sections, suggesting that each one of them represents instances of
CSR. However, considering that Venn diagrams chart a logical space of
mutually exclusive classes in a universe of all instances, it is difficult to
make much sense of what particulars would fall into each of these classes.

Total CSR If each of the seven categories is problematic as a class of

CSR, what can we say about the total CSR? In contrast to the pyramid
framework which depicts the total CSR as an "and" orientation, namely a
conjunction of the different responsibilities; the Venn model implies an
"or" orientation, which is a disjunction of the different categories.

Order of importance Being committed to multiple objectives at one

and the same time, how are the different corporate responsibilities to be
reconciled in cases of conflict? The CSR pyramid resolves this fundamental
difficulty by specifying the order of priority among the various
responsibilities;
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the concentric‐circle model offers a normative core of integration as
another solution. The IC model, in contrast, fails to provide any clear
normative guidance for managerial decision making. It leaves managers
faced with competing responsibilities with no way to make principled or
purposeful decisions.

The role of philanthropy In general, the domain categories in the

three‐ circle Venn diagram are defined in a manner consistent with
Carroll's four‐ part model, with one exception: the philanthropic
category is subsumed under the ethical and/or economic domains. Many
would argue that to subsume the philanthropic category under economic
responsibility is to convert what is seen as a virtue into self‐interest.
Eventually, however, the choice to consider the philanthropic category
separately or subsume it under other domains of responsibility largely
depends on the costs and benefits of the particular framework of the
problem at hand.

THE CONCENTRIC‐CIRCLE MODEL OF CSR

General Description
The CON model is adapted from a notable statement issued in 1971
by the Committee for Economic Development (CED), an American
association of influential business leaders. In this statement, CED
advocated the notion that social contracts for business firms are not only
feasible but morally necessary, and urged business to adopt a broader
and more humane view of its function in society. The original CED model
consists of three concentric circles. The inner circle represents the core
responsibility of business in terms of CSR. It includes the basic
responsibilities for the efficient execution of the economic function—
products, jobs, and economic growth. The intermediate circle, which can
be viewed as the ethical circle, encompasses responsibility to exercise the
economic function with a sensitive awareness of basic ethical norms as
well as changing social values and priorities. The outer circle, equivalent
to the philanthropic circle, outlines newly emerging and still amorphous
responsibilities that business should assume in order to become more
broadly involved in actively improving the social environment.

Theoretical Assumptions

Nature of CSR The CON model represents a normative approach to

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CSR. Compatible with recent developments in CSR thinking, the
fundamental

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idea embedded in the CON model is that business corporations have an
incurred obligation to work for social betterment, and this obligation acts
as a constant function throughout all phases—mainstream and peripheral
—of the company's operations.

Scope of responsibilities Understanding CSR as a framework of

integrated responsibilities with a common core requires that each of the
different responsibilities be defined in reference to this unifying meaning
or purpose. The narrow definitions that characterized the separation of
the CSR domains in the pyramid framework and in the seven‐category IC
model are replaced here with broad definitions that account for their
common essence.

Total CSR The CON model regards CSR as a global concept whose
parts are bound together by means of a shared intrinsic content, which
can be defined as a commitment to operate in a way that promotes the
good of society. One can argue that the notion of the “good of society” is
too abstract to serve as a benchmark for assessing CSR. However,
despite, and perhaps owing to, the many meanings of this notion, nearly
all today's large corporations have their mission codes stated in terms of
commitment to the good of society, and in most cases this general
commitment is further translated into a list of more practical goals.

Order of importance A basic feature of the concentric circles is the

existence of a common core. In terms of CSR this means that all different
corporate social responsibilities share a common essence. The CON model
recognizes that the vital function of business is economic; even so,
business decisions consist of continuous, interrelated economic and moral
components. Indeed, the inclusion structure of the responsibility circles might
blur the distinction between the different responsibilities. However, this
structure helps the manager to see that the different types of obligations
are in constant and dynamic interrelationships. At the same time, it does
not prevent the manager from considering each responsibility in itself in
the process of decision making.

Role of philanthropy Corporate philanthropy commonly refers to the

contributions of business firms to humanitarian and social causes, which
are usually considered outside the firms’ natural line of business. Indeed, as
we have seen, Carroll's pyramid treats philanthropic giving, or for that
matter, good corporate citizenship, as a discretionary responsibility,
separated from daily business operations and secondary to the more basic
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economic, legal,

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and ethical responsibilities; and the IC model treats corporate philanthropy
as either “strategic philanthropy,” subsumed under economic
responsibility, or “charity expected by society,” subsumed under ethical
responsibility. The CON model holds a broader view of corporate
philanthropy that draws on the general purpose of CSR, namely the
obligation of the corporation to help in achieving the good of the larger
society. In contrast to the pyramid, where the actions of a company in
society are divorced from its operating practices, the CON model presents
an all‐encompassing view that integrates citizenship both locally and
globally with day‐to‐day business functions.

Activity: Make my Own

Supposed you are going to open your own business, consider the
creation of your product and target audience, follow the guided questions
below for the creation to acknowledge your social responsibility.

1. What model of corporate social responsibility (CSR) you will adopt?

2. What are the CSR program(s) you plan to implement and will
be given much attention and focus?
3. What is your purpose of having such CSR program/ model?

Copy the given format in your activity notebook.

Name of Business:

Target Market:

Product or services to offer:

Purpose of the offerings:

Corporate Social
Responsibility (CSR) model:

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III. WHAT HAVE I LEARNED
POST TEST
Direction: Write the letter of the correct answer in your notebook.
A. Economic E. Pyramid
B. Legal F. Intersecting-Circle
C. Ethical G. Concentric-Circle
D. Philanthropic H. Social Responsibility
1. At the top of the pyramid, occupying the smallest space
is philanthropy.
2. Businesses have long been criticized for their carbon footprint, their
part in pollution, using natural resources and more.
3. For the business to survive on a long-term basis and benefit the
society, the first responsibility of the company is to gain profits.
4. It is the overall corporate responsibility to advance harmony and
resolve conflicts between them.
5. It is a means of achieving sustainability.
6. It is imperative for the company to obey and adhere to the laws and
regulations related to the nature of its business, competition,
employment, and health and safety among others.
7. It is important for the company to act on the grounds of ethics and
morals in society and should also go beyond the narrow
requirements of the law and order.
8. It is the responsibility of the company to give back to society. This
facet of responsibility holds an important place even though it is
discretionary in nature.
9. The CSR was framed to embrace the entire spectrum of society's
expectations of business responsibilities and define them in terms of
categories.
10. The lowest level of the pyramid represents a business’s first
responsibility, which is to be profitable.
11. The second level of the pyramid is the business’s legal obligation to
obey the law.
12. This represents a normative approach to CSR.
13. This adopts key social responsibility principles, such as
accountability and transparency, can help ensure the long-term
viability and success of any organization or system.
14. This is the most important responsibility out of the four levels
as this will show how companies conduct their business in the
marketplace.
15. This model refutes the notion that CSR is nothing but a collection of
contingent, externally related topics.
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PLEASE ANSWER THE FOLLOWING
PRE-ACTIVITY
MAKE MY OWN
POST TEST/ EVALUATION TEST

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