Lesson 7
Corporate Social Responsibility
In recent years, various movements were organized to encourage
companies to prioritize corporate social responsibility. Corporate social
responsibility (CSR) is defined as a concerted initiative to contribute to
sustainable development through efforts that are economically, socially, and
environmentally beneficial to stakeholders. Corporate social responsibility is
also related to sustainable development. This term is defined as an effort to
strike a balance between maintaining the needs of the present and the ability
of future generations to meet their needs through the preservation of the
environment.
Unilever presents a classic example of a comprehensive CSR strategy
that has been considered as remarkable in terms of CSR initiatives and
performance by the Dow Jones Sustainability index (DJSI). As a globally
recognized benchmark, DJSC evaluates companies in terms of sustainable best
practices that guide investors in long – term investment decisions.
In 2016, Unilever’s manufacturing operations are expected to reduce
carbon dioxide emissions by 3%, global energy use by 2%, and water use by
3%. In January 2017, Unilever announced a commitment that all its plastic
packaging are reusable by 2025.
Aspects of Corporate Social Responsibility
Corporate social responsibility is embodied in four aspects or obligations.
They are economic, legal, ethical and philanthropic.
Economic Obligation. It is primary responsibility of a company to help
develop the economy and achieve a status of development on a par with other
countries; generates employment; and distribute goods and services for public
use and consumption. Needless to say, a company should earn a profit.
Otherwise, it will close down. Nonprofit organizations, however, like the
Philippine Red Cross, are established not for profit but some specific purpose.
As such, nonprofit organization rely heavily on donation and grants.
Legal Obligation. Company operations should be within the bounds of
law. The company should follow rules and restrictions dictated by law comply
with legal requirements. It also has the obligation to pay taxes and get the
necessary permits in the operation of the business. It has the duty to pay its
employees promptly, in accordance with the law.
Ethical Obligations. Companies are expected to be ethical in their
dealings with stakeholders, especially the general public. They should avoid
emitting toxic wastes or causing pollution in the course of their operations.
They also have an ethical responsibility to their employees. Protective gears
should be used when workers are handling harmful chemicals. A company
operates ethically when it does not cause harm or threaten the life of anyone in
the course of its operations.
Philanthropic Obligations. It is an obligation of a company to help the
community in worthwhile projects which are beneficial to the people in the
community. This is the way of giving back to the community where the
company operates. Philanthropy is voluntary in the nature.
Models of Corporate Social Responsibility
There are three models of CSR which depict the different aspects of CSR
and their relationships. They are the pyramid model, the intersecting circles
model, and the concentric circles models.
The Pyramid Model. This model emphasizes the level of expectations of
the people comprising the four social responsibilities starting from the
economic to the philanthropic. The hierarchy of social responsibility shows the
order of decreasing importance starting from the baseline which is economic
responsibility. The next layer is legal responsibility while the third is ethical
responsibility. The last is the philanthropic responsibility.
The Intersecting Circles Model. In this model, the four aspects of social
responsibility, i.e., economic, legal, ethical, ethical, and philanthropic, overlap
with each other, showing their interrelationships. The interrelationships allow
for flexibility because managers are free to use the company’s resources not
solely on one aspect but undertake endeavors that address several aspects.
The Concentric Model. This model is similar to the Pyramid model
where the economic social responsibility is the core aspect. It is also similar to
the Intersecting Circles model in terms of the interrelationships of the four
aspects. Although, economic social responsibility is more pronounced and
emphasized. This means that the company should be profitable for the good of
the general public. The concentric circles of legal, ethical, and philanthropic
social responsibilities embrace economic social responsibility. This means that
all economic responsibilities should have legal, ethical, and philanthropic
aspects. For example, in achieving profitability, the company should act
morally in all its dealings (ethical). While complying with legal requirements, it
should cooperate with the government in fighting inflation and adopting
measures to prevent pollution (legal). Lastly, in reaping profits the company
should have programs that will improve the social environment (philanthropic).
Overall, the four aspects of corporate social responsibility are interpreted
in the three models based on the weight they put on each aspect. But just the
same, all three models highlight the importance of CSR in fulfilling the
company’s goal of being a good corporate citizen.
QUESTIONS:
1. Is defined as a concerted initiative to contribute to sustainable
development through efforts that are economically, socially, and
environmentally beneficial to stakeholders.
a. Corporate social responsibility
b. Environmental strategies
c. Philanthropic aspects
d. Social corporate
2. It is the primary responsibility of a company to help develop the economy
and achieve a status of development on a par with the other countries;
generate employment; and distribute goods and services for public use
and consumption.
a. Social corporate
b. Economic obligation
c. Environmental ethics
d. Philanthropic strategies
3. Company operations should be the bounds of law.
a. Social aspects
b. Economic status
c. Legal obligation
d. Ethical business
4. Companies are expected to be ethical in their dealings with stakeholders,
especially the general public.
a. Legal position
b. Ethical issues
c. Economic bounds
d. Ethical obligations
5. It is an obligation of a company to help the community in worthwhile
projects which are beneficial to the people in the community.
a. Philanthropic obligations
b. Social bounds
c. Ethical position
d. Legal position
6. This model emphasizes the level of expectations of the people comprising
he four social responsibilities starting from the economic to the
philanthropic.
a. Stream model
b. The pyramid model
c. Human model
d. Philanthropic model
7. In this model, the four aspects of social responsibility showing their
interrelationships.
a. The pyramid model
b. Ethical model
c. The intersecting circles model
d. Economic model
8. This model is similar to the pyramid model where the economic social
responsibility is the core aspect.
a. The intersecting circles model
b. The pyramid model
c. Economic model
d. The concentric circles model
9. They are the pyramid, the intersecting circles model, and the concentric
circles model.
a. Models of corporate social responsibility
b. Models of ethical aspects corporation
c. Models of Pythagorean pyramid
d. Models of economic aspects
10. Is embodied in four aspects or obligation. They are economic, legal,
ethical and philanthropic.
a. ethical social responsibility
b. corporate social responsibility
c. economic social responsibility
d. philanthropic social responsibility
ANSWER KEY:
1. A
2. B
3. C
4. D
5. A
6. B
7. C
8. D
9. A
10. B
