The pyramid of corporate social responsibility: toward the moral management of organizational stakeholders

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Author: Archie B. Carroll
Date: July-August 1991
From: Business Horizons(Vol. 34, Issue 4)
Publisher: Elsevier Advanced Technology Publications
Document Type: Article
Length: 5,245 words

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For the better part of 30 years now, corporate executives have struggled with the issue of the firm's responsibility to its society. Early on it was argued by some that the corporation's sole responsibility was to provide a maximum financial return to shareholders. It became quickly apparent to everyone, however, that this pursuit of financial gain had to take place within the laws of the land. Though social activist groups and others throughout the 1960s advocated a broader notion of corporate responsibility, it was not until the significant social legislation of the early 1970s that this message became indelibly clear as a result of the creation of the Environmental Protection Agency (EPA), the Equal Employment Opportunity Commission (EEOC), the Occupational Safety and Health Administration (OSHA), and the Consumer Product Safety Commission (CPSC).

These new governmental bodies established that national public policy now officially recognized the environment, employees, and consumers to be significant and legitimate stakeholders of business. From that time on, corporate executives have had to wrestle with how they balance their commitments to the corporation's owners with their obligations to an ever-broadening group of stakeholders who claim both legal and ethical rights.

This article will explore the nature of corporate social responsibility (CSR) with an eye toward understanding its component parts. The intention will be to characterize the firm's CSR in ways that might be useful to executives who wish to reconcile their obligations to their shareholders with those to other competing groups claiming legitimacy. This discussion will be framed by a pyramid of corporate social responsibility. Next, we plan to relate this concept to the idea of stakeholders. Finally, our goal will be to isolate the ethical or moral component of CSR and relate it to perspectives that reflect three major ethical approaches to management-immoral, amoral, and moral. The principal goal in this final section will be to flesh out what it means to manage stakeholders in an ethical or moral fashion.

EVOLUTION OF CORPORATE

SOCIAL RESPONSIBILITY

What does it mean for a corporation to be socially responsible? Academics and practitioners have been striving to establish an agreed-upon definition of this concept for 30 years. In 1960, Keith Davis suggested that social responsibility refers to businesses' "decisions and actions taken for reasons at least partially beyond the firm's direct economic or technical interest." At about the same time, Eells and Walton (1961) argued that CSR refers to the "problems that arise when corporate enterprise casts its shadow on the social scene, and the ethical principles that ought to govern the relationship between the corporation and society."

In 1971 the Committee for Economic Development used a "three concentric circles" approach to depicting CSR. The inner circle included basic economic functions - growth, products, jobs. The intermediate circle suggested that the economic functions must be exercised with a sensitive awareness of changing social values an priorities. The outer circle outlined newly emerging and still amorphous responsibilities that business should assume to become more actively involved in improving the social environment....

Source Citation

Source Citation
Carroll, Archie B. "The pyramid of corporate social responsibility: toward the moral management of organizational stakeholders." Business Horizons, vol. 34, no. 4, July-Aug. 1991, p. 39+. Accessed 24 Oct. 2020.
  

Gale Document Number: GALE|A11000639