CSR PyramidBackground The CSR pyramid, also known as Carroll's CSR pyramid, is a model developed by American professor Archie B. Carroll. The CSR Pyramid was published in the article titled The Pyramid of Corporate Social Responsibility: Toward the Moral Management of Organizational Stakeholders in the journal Business Horizons, in July-August 1991. Before the article was published, there had been a long debate about the responsibility of a company. Many believed that a company's only responsibility was towards its owners, and that it was all about making money for them. About the model The CSR pyramid is a widely used framework to explain the different layers of corporate social responsibility – also called Corporate Social Responsibility (CSR). The CSR pyramid shows that companies' responsibilities can be divided into four layers, which are fulfilled in a specific order – from the most basic at the bottom to the most idealistic at the top.
The four layers of the CSR pyramid consist of:
Economic responsibility is the first layer This is the foundation of the pyramid A business must make money. It must be profitable. Profit must be created. These are the most basic responsibilities that management must fulfill. They must be able to pay employees, comply with payments to suppliers, etc. Without financial sustainability, the company cannot fulfill the three layers above.
Legal responsibility is the second layer “Comply with the law.” Companies must follow applicable laws and regulations in the country in which they operate. Examples: Tax laws, occupational health and safety, product standards, etc. It is a requirement from the environment – that is, from society – that the company adheres to the rules.
Ethical responsibility is the third layer of the pyramid “Do the right thing – even if it’s not a legal requirement.” That is, act morally and responsibly Companies should act morally and ethically, for example, avoiding exploiting labor, polluting or misleading consumers. Even if it’s not illegal – it’s bad style.
Philanthropic responsibility is the fourth and final layer Be a good corporate citizen and “give back to society” This refers to voluntary initiatives such as charity, sponsorships, support for education and local communities. The environment has an expectation that the company engages in giving back – but it is not a requirement. The environment does not consider the company unethical if it does not. Therefore, philanthropy is more discretionary or voluntary on the part of the company, although there is always a societal expectation that the company pays back. Criticism of model A criticism of the CSR pyramid (Carroll’s CSR pyramid) is typically directed at its simplification of corporate social responsibility and its emphasis on financial profit over other considerations. The criticism is that the model places financial responsibility at the bottom as the most fundamental, and philanthropic responsibility at the top as the least important. This suggests that companies should only take on ethical or philanthropic responsibility after the financial goals have been met. These risks trivializing social and ethical considerations. The model reflects a Western understanding of the role and responsibility of a company in a capitalist context. It does not consider cultural differences in how CSR is perceived and practiced – for example in Asian or African contexts, where social responsibility may be more collectively oriented. The conclusion of the criticism is that the CSR pyramid is a useful historical tool for understanding corporate responsibility, but it is too simple and outdated in light of today's complex societal and environmental challenges. Many companies and theorists are now calling for more dynamic and context-based models of CSR. However, its simple structure makes it a good place to start when your company needs to have an overview of the initiatives that are being taken in relation to CSR. You can always expand with other alternatives from there.
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