Carroll’s pyramid of CSR is a framework that explains how organisations can take social responsibility, it highlights the four important types of responsibility of organisations⁵. The pyramid is arranged in a hierarchical order, from the most basic and essential to the most discretionary and aspirational. Here is a detailed explanation of each level of the pyramid:
- Economic responsibility: This is the first and foremost responsibility of any organisation to be profitable and viable in the market. An organisation cannot survive or sustain its other obligations without this responsibility. Economic responsibility means providing rewards to the owners, paying employees fairly, selling products at a fair price to consumers, and creating value for the stakeholders.
- Legal responsibility: This is the second level of commitment, to comply with the laws and regulations that govern the organisation’s activities. Legal responsibility means that businesses should follow the law and not act illegally¹⁵. It also means respecting the rights of others, such as customers, employees, suppliers, competitors, and the society at large³.
- Ethical responsibility: This is the third level of responsibility, to go beyond the legal requirements and do what is right and fair. Ethical responsibility means that businesses should follow the moral principles and standards that guide their behaviour. It also means being honest, transparent, accountable, and respectful of the environment and human dignity³.
- Philanthropic responsibility: This is the fourth and highest level of commitment to voluntarily contribute to the social welfare and well-being of the community. Philanthropic responsibility means that businesses should actively try to help society, for example, by improving the quality of each employee’s working life, supporting charitable causes, donating to education and health care, or promoting cultural diversity. It also means being a good corporate citizen and showing care and compassion for others.
Carroll’s pyramid of CSR suggests that organisations should fulfil their responsibilities in a balanced and integrated way, without neglecting any level or prioritising one over another. The pyramid also implies that ethics permeates all levels of commitment and that there are tensions and tradeoffs inherent in fulfilling them. The pyramid is a helpful tool for understanding and evaluating the social performance of organisations in different contexts and cultures.
Source: Conversation with Bing, 11/10/2023
(1) Carroll’s CSR Pyramid: Understanding the Four Levels. https://www.batheories.com/csr-pyramid/.
(2) Teaching guide: Carroll’s corporate social responsibility pyramid. https://www.aqa.org.uk/resources/business/as-and-a-level/business-7131-7132/teach/teaching-guide-carrolls-corporate-social-responsibility-pyramid.
(3) CSR Pyramid | SpringerLink. https://link.springer.com/referenceworkentry/10.1007/978-3-030-02006-4_66-1.
(4) Carroll’s pyramid of CSR: taking another look – SpringerOpen. https://jcsr.springeropen.com/articles/10.1186/s40991-016-0004-6.
(5) What is the Pyramid of Corporate Social Responsibility?. https://theimpactinvestor.com/pyramid-of-corporate-social-responsibility/.