BUSINESS ETHICS AND SOCIAL RESPONSIBILITY

MODULE
Module No. 3: Week 3: Fourth Quarter
MORALLY DEFENSIBLE POSITION ON ETHICAL ISSUES IN BUSINESS

Learning Competencies
Describe the different models and frameworks of social responsibility.
Codes: ABM_ESR12-IVi-l-3.4

Objectives
After studying this module, you are expected to:
1. Describe the different models and frameworks of social responsibility.
2. Give some simple business illustrations of Corporate Social Responsibility (CSR).
3. Show the importance of models and frameworks of social responsibility in the practice of sound
business.

Let’s Recall
Task 1- Pyramid of Success!
The activity aims to give you a clear understanding the major focus of the model which is to
embrace the complete spectrum of expectations that society has form a business.
Analyze and choose a word inside the box that best describes the given statement beside each
part of the pyramid. Copy the pyramid in your notebook and write your answer inside each part of the
pyramid.

Economic Legal Ethical Philanthropic

G g Good corporate citizen

Do what is right. Avoid harm

Let’s Understand
Obey the law
DISCUSSION
Be profitable
Task 2- Answer me!
1. How did you find the activity?
2. Based on the words you have identified in each part of the pyramid, enumerate the four kinds
of social responsibility?
3. Why do you think it is presented in a pyramid style?
4. Let’s say you are an entrepreneur/business owner. Do you think those words written above are
important to consider for the success of your business? Why or why not?
5. Choose only one (1) word written inside the box you consider the most important expectation
that society has from a business? Why?

1
 Let’s Understand
DISCUSSION
Now, how are previous activities conducted related to our discussion? They are related
because we will be discussing the different corporate social responsibility (CSR) models and
frameworks and their advantages.
Corporate Social Responsibility (CSR) is a very broad concept that is understood and
implemented differently by each firm, the underlying idea of CSR is to operate in an economically,
socially, and environmentally sustainable manner.
Generally, corporate social responsibility initiatives are categorized as follows:
1. Economic Responsibility
Economic responsibility initiatives involve improving the firm’s business operation while
participating in sustainable practices – for example, using a new manufacturing process to minimize
wastage.
2.Legal Responsibility
As business is an entity itself, it must also follow laws and rules. Every business has a responsibility
to operate within the boundaries set by the various commissions and agencies at every level of the
government. These rules and regulations are set for maintaining balance and the greater good of the
society.
3.Ethical Responsibility
Behavior of the firm that is expected by the society but not codified in law. The factors of ethical
responsibility include that the business must be environmentally friendly. The business should always
be aware of its activities and how do they affect the environment. It is the moral and ethical
responsibility of every human and every business.
4. Philanthropic Responsibility
Business is one the most important pillar of the society. And therefore, it should support and
improve the society whenever it can. If a business is making significant profits it is the business
responsibility that it should be philanthropic towards the society by donating funds or its goods and
services, funding educational programs, supporting health initiatives, donating to causes, and supporting
community beautification projects.
Back to the statement above, CSR is a very broad concept that is understood and implemented
differently by each firm. So, the different models and frameworks of social responsibility gives a view
of how businesses adopt and perceived each model.
The different models and frameworks of social responsibility
1. Carroll’s pyramid CSR model

 This is one of the leading CSR models.

 It is formally known as the model of Carroll’s four-part pyramid.
 The major focus of the model is to embrace the complete spectrum of expectations that
society has from a business.

Figure 1: Carroll’s pyramid CSR model

2
 As shown in the above figure, there are four kinds of social responsibilities that cohesively constitute
the concept of CSR. This involves economic, legal, ethical and philanthropic.
The pyramid is used to show the different responsibilities of a business in the order of decreasing
importance.

The most basic responsibility representing the bottom of the pyramid is economic responsibility
(Carroll, 2016). All the other responsibilities of the business are predicted on the basis of this
component.
Next comes the legal responsibility, all the business whether small or big are expected to operate
within the framework that has been specified by the law of the land. Thus, the legal responsibility is
depicted as a layer above economic responsibilities. Followed by this in the hierarchy is the ethical
responsibilities which cover activities and practices which are expected by the society members even
though they are not enforced by law.
On top of the pyramid is the philanthropic responsibilities, which is considered
discretionary in nature. Thus, the pyramid works towards describing the necessary and the
sufficient obligations that socially responsible businesses should follow (Kaman, 2015).
Carroll’s pyramid CSR model has been applied by several researchers in order to assess
an industry or a company’s CSR program, particularly in the field of social issues.
2. Intersecting Circle (IC) CSR model
The Intersecting Circle (IC) CSR model is very different from the pyramid model. The major
point of differentiation between the two models is that:
A. it recognizes that there is a possibility of interrelationships between the different
domains of CSR and second and
B. it rejects the hierarchical order of importance.

3
 Figure 2: Intersecting Circle (IC) CSR model

This model clearly includes all the possible domains of CSR and hence could clearly depict the
picture of the interrelationships between the different domains.
The IC model refutes the notion that CSR is just a collection of contingent and externally related
topics. Rather, the model states that different responsibilities are in dynamic interplay with each other.
It is the responsibility of the corporate to maintain harmony and resolve the conflicts between different
responsibilities. The main idea of the model is that no responsibility is more important than the other.
Rather everything is a social creation and the existence of everything depends on the willingness of the
society to support them (Ma, 2012)
3. Concentric Circle CSR model
The Concentric Circle model which is also known as the CON model shares some similarities with
Carroll’s Pyramid and IC model. For instance, the CON model also states economic responsibility as
one of the core social responsibilities. Also, like the IC model, the CON model also emphasizes the
interrelationships among different responsibilities (Zu, 2009).
However, besides these similarities, there is a major difference as well. In contrast to the
Pyramid model and IC model, the CON model states noneconomic social responsibilities are the one
that embraces core economic responsibilities.

Figure 3: Concentric Circle CSR model

As shown in the figure above the inner circle represents the core responsibilities of the business
in terms of CSR. This basically includes responsibilities that focus on the efficient execution of
economic functions such as products, jobs and economic growth. The second circle represents the legal
responsibilities that involve cooperating with the government on the part of the businesses. The
intermediate circle which is the ethical circle includes responsibilities that help to exercise economic
functions but with a sensitive awareness of ethical norms as well as values and priorities. The outer
circle that represents the philanthropic circle focuses on newly emerging responsibilities that the
business should focus on in order to become more broadly involved in social responsibilities.
Furthermore, the concentric circle represents the system of inclusion rather than the system of
mutually exclusive domains. Thus, every member in the inner circle is part of the wider circle (Kaman,
2015).

4
 4. Contemporary innovative CSR models
Although the above-discussed models find universal application in the domain of CSR, many
businesses have come up with customized models.
For instance, Coca-Cola has employed the CSR model known as the 5*20 Program that focuses
on employing 5 million women in the developing countries by the year 2020 in their bottling and
distribution roles. This will not only benefit the women but also the community as the company also
aims to provide better access to health care facilities and education to their employees.
Furthermore, Sales force implements a 1-1-1 philanthropic model, which involves giving one
percent of the product, one percent of equity, and one percent of employees’ time to communities and
the nonprofit sectors. Using this model, the company not only achieved its CSR goals but also increased
its revenues (Gavin, 2019).
REFERENCES
Raceles, A. 2017. Business Ethics and Social responsibility(1st ed.). Sampaloc, Manila:Rex Bookstore
Inc.
Review of different CSR models and their advantages,April 1, 2020. Retrieved from
https://www.projectguru.in/corporate-social-responsibility-models

Let’s Apply
Identify which model of social responsibility best describes the following
statement/situation/illustration. Write your answer in your activity notebook.
(Carroll’s pyramid CSR model, Intersecting Circle (IC) CSR model, Concentric Circle
CSR model, Contemporary innovative CSR model).
No. Statement/Situation CSR model
1 Some businesses have come up with customized models. Like 5 by
20 program, 1-1-1 philanthropic model
2 This is basically including responsibilities that focus on the
efficient execution of economic functions such as products, jobs
and economic growth and are the one that embraces core economic
responsibilities.
3 The main idea of the model is no responsibility is more important
than the other, rather, the model states that different
responsibilities are in dynamic interplay with each other.
4 This model is used to show the different responsibilities of a
business in the order of decreasing importance.
5

5
 7

8 This model rejects the hierarchical order of

Let’s Analyze
Multiple Choice
Direction: Read each item carefully. Choose the letter that corresponds to the correct
answer. Write your answer in your activity notebook.
1. Kind of social responsibility that follows moral and ethical values to deal with all the
stakeholders
A. Ethical responsibility C. Philanthropic responsibility
B. Legal responsibility D. Economic responsibility
2. The most basic responsibility that maximizes the shareholders’ value by paying good
return
A. Economic responsibility C. Ethical responsibility
B. Philanthropic responsibility D. Legal responsibility
3. Discretionary in nature. To insure goodwill and social welfare
A. Economic responsibility C. Intersecting Circle (IC) model
B. Philanthropic responsibility D. Carroll’s pyramid CSR model
4. Model of social responsibility that rejects the hierarchical order of importance.
A. Carroll’s pyramid CSR model C. Contemporary innovative CSR models
B. Intersecting Circle (IC) CSR model D. Concentric Circle CSR model
5. Social responsibility participating in sustainable practices – for example, using a new
manufacturing process to minimize wastage.
A. Philanthropic C. Economic
B. Legal D. Ethical

Let’s Try
Answer what are being asked. Write it in your activity notebook.
1.Among the different models of social responsibility presented, what is the most important
category of CSR in business? Why?
2.Do you think it is a must that companies are required to undertake CSR? Why or why not?
3.Which of the models of social responsibility do you prefer most? Why?
4.What implies the illustration of Intersecting Circle (IC) CSR model?
5.If you are the entrepreneur, which model of social responsibility would you like to adopt?
Why?