Republic of the Philippines

Department of Education
REGION VII – CENTRAL VISAYAS
Schools Division of Cebu Province

MANGYAN NATIONAL HIGH SCHOOL

SELF LEARNING HOME TASK #: 4

Subject: BUSINESS ETHICS & SOCIAL RESPONSIBILITY Grade: 12 Quarter: 4 Week: 4

I. MELC: Formulate a framework of social responsibility that reflects the practice of sound business.
(ABM_ESR12-Ivi-1-3.5)

Name: ________________________________ Section: __________________ Date: ___________

II. Subject Matter: MODELS AND FRAMEWORKS OF SOCIAL RESPONSIBILITY

A. Readings/Discussions:

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
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/)
 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.
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

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 intersecting Integration of responsibilities; all

Description separate responsibilities sharing a
responsibilities central core
Theoretical Assumptions
Nature of CSR Normative restraints of Classification framework; no Incurred obligation to work for
responsiveness normative guidance social betterment

Scope of Narrow split Wide

Responsibilities
Total CSR Conjunction Disjunction Integration

Order of Hierarchy; Economic No prima facie order Inclusion system; economic circle
importance responsibility first at the core

Role of “Icing on the cake” Subsumed under Integral part of CSR

Philanthropy economic/ethical responsibilities

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
importance? A number of explanations have been offered to answer this question: (1) the 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.
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; 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 CSR. Compatible with recent developments in CSR
thinking, the fundamental 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 economic, legal, 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.
B. Exercises
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?

Name of Business:
Target Market:
Product or services to offer:
Purpose of the offerings:

Corporate Social Responsibility (CSR) model:

C. Assessment/Application/Outputs (Please refer to DepEd Order No. 31, s. 2020)
Directions: Write the letter of the correct answer beside the number.
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.

References:
Racelis, Aliza, Business Ethics and Social Responsibility (Sampaloc, Manila, Rex Book Store, Inc., 2017)

What is social responsibility? Retrieve from https://asq.org/quality-resources/social-responsibility

Social Responsibility, Retrieve from https://en.wikipedia.org/wiki/Social_responsibility#:~:text=So cial%20responsibility%20is%20an

%20ethical,benefit%20of%20s ociety%20at%20large.

Prepared by:

MELBEN T. RESURRECCION
Teacher II Checked/Inspected by:

GAUDENCIO R. BLANCO JR., EdD

School Head
Address: DepEd Cebu Province, IPHO Bldg,. Sudlon, Lahug, Cebu City
Telephone no.: 032-2556405
Email Address: cebu.province@deped.gov.ph