Corporate Social Responsibility Overview

Corporate Social Responsibility (CSR) Frameworks

• Economic Responsibility: Focuses on achieving profitability while considering the broader impact on society.

• Legal Responsibility: Obligation of companies to comply with laws and regulations, which can be categorized into passive, restrictive, and opportunistic compliance.

• Ethical Responsibility: Involves acting according to moral principles and societal expectations, beyond legal compliance.

• Philanthropic Responsibility: Refers to voluntary actions taken by companies to improve the well-being of society, often through charitable donations and community engagement.

Two-Dimensional Model of Quazi and O'Brien

• Classic View: Emphasizes short-term economic benefits of CSR and often results in defensive strategies focused on cost minimization.

• Socio-Economic View: Balances understanding of CSR with potential benefits, leading to a strategy where CSR investments provide more tangible benefits than costs, e.g., energy conservation and employee training.

• Modern View: Sees CSR activities as value-creating opportunities for both society and the company, focusing on long-term financial performance and sustainability investments.

• Philanthropic View: Emphasizes voluntary financial contributions to societal well-being as a form of corporate responsibility.

Three-Domain Model by Carroll and Schwartz

• Economic Domain: Consideration of the financial performance of the company within its CSR strategy.

• Legal Domain:

  • Compliance Types:
    • Unintentional Compliance: Following laws without conscious effort.
    • Intentional Compliance: Actively adhering to regulations such as emissions control.
    • Opportunistic Compliance: Seeking profits by choosing weaker regulatory environments.

• Ethical Domain: Navigating laws with integrity, such as voluntary product recalls due to quality defects, anticipating future legislation, and adhering to emerging social expectations.

Concept of Sustainability: The Three-Pillar Model

• Environmental Pillar: Focuses on resource preservation, pollution reduction, and promotion of renewable energy and biodiversity.

• Social Pillar: Advocates for social equity, justice, and improved employee conditions, including healthcare and education.

• Economic Pillar: Ensures financial stability and growth, contributing positively to the company's financial position.

Carroll's CSR Pyramid

• Corporate Social Responsibility (CSR): A framework outlining the obligation of businesses to contribute to sustainable societal development.

• Environmental, Social, and Governance (ESG): Metrics used to evaluate company performance in sustainability and ethical impact.

• Stakeholder Engagement: Acknowledges the importance of various stakeholders, including consumers, employees, investors, and rating agencies in assessing CSR effectiveness.

• Subjective vs. Objective Standards: CSR may be based on internal standards (subjective) or assessed against external ESG criteria (objective), with qualitative and quantitative measurements used.