Page 94 - SBL Integrated Workbook STUDENT 2018

Chapter 9

1.1 The nature of CSR

Carroll’s definition of CSR:

CSR encompasses the economic, legal, ethical and philanthropic
expectations placed on organisations by society at a given point in
time.'

1.2 A four-part model of CSR

Economic responsibility

 Shareholders demand a reasonable return.

 Employees want safe and fairly paid jobs.

 Customers demand quality at a fair price.

Legal responsibility

 The law is a base line for operating within society.

 It is an accepted rule book for company operations.

Ethical responsibility

 This relates to doing what is right, just and fair.

Philanthropic responsibility

 Relates to discretionary behaviour to improve the lives of others, e.g. charitable
donations and recreational facilities.

Note: True CSR requires satisfying all four parts consecutively.

NB: Whilst this is not contained in the syllabus and will not be examined directly,
it is a good framework to understand the basic concept of CSR.

Illustrations and further practice

Now try TYU question 1.

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