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BCarroll,
Archie B.

The Pyramid of Corporate Social Responsibility: Toward the Moral Management of Organizational Stakeholders,
Business Horizons, July-August 1991

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' sole responsibility was to provide a maximum financial return to s

shareholders. It became quickly apparent to everyone, however, that this pursuit of financial gain had to rake 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' owners with their s

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' CSR in ways that might be useful to executives who wish to reconcile their s

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 our 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.”

Figure 1
Economic and Legal Components of Corporate Social Responsibility Economic Components
(Responsibilities)
1. It is important to perform in a manner
consistent with maximizing earnings per
share

Legal Components
(Responsibilities)
1. It is important to perform in a manner
consistent with expectations of government
and law.

2. It is important to be committed to being 2. It is important to comply with various as profitable as possible.
federal, state, and local regulations.
3. It is important to maintain a strong
competitive position.

3. It is important to be a law-abiding
corporate citizen.

4. It is important that a successful firm be
4. It is important to maintain a high level of
defined as one that fulfills its legal
operating efficiency.
obligations.
5. It is important that a successful firm be 5. It is important to provide goods and defined as one that is consistently
services that at least meet minimal legal
profitable.
requirements.
In 1971 the...
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