Review of different CSR models and their advantages

By Ashni walia & Priya Chetty on April 1, 2020

Corporate Social Responsibility (CSR) is a self-regulating business strategy that helps businesses to be socially responsible and accountable, to their stakeholders and to the public. Several CSR models have been formulated over the years. The purpose of these models is to design and execute the CSR process and to enable its monitoring and control. Businesses by implementing CSR models in their operations increase their adaptability to internal and external changes in the environment. This helps to promote positive changes and bring about progress in socio-economic parameters. CSR benefits people and entities with few or no resources (Ivesha, 2008).

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, defining them and dividing them into different categories. The model can be represented with the help of diagram-1 shown below.

Carroll's pyramid CSR model
Figure 1: Carroll’s pyramid CSR model

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.

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Next comes the legal responsibility, all the businesses whether small or big expected to operate within the framework that has been specified by the law of the land. Thus, legal responsibility is depicted as a layer above economic responsibilities. Followed by this in the hierarchy are 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 the philanthropic responsibilities, which are considered discretionary in nature. Thus, the pyramid works towards describing the necessary and 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. However, consecutively a modified model was proposed (Schwartz & Carroll, 2003) called the “three-domain model of CSR”. The authors critiqued Carroll’s pyramid as he found that it was insufficient to address the relationship between the four components, it considers philanthropy separately and was theoretically underdeveloped. The three-domain model consists of only three categories; economic, legal and ethical. Philanthropy is assumed to be a part of all these functions.               

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:

  1. it recognizes that there is a possibility of interrelationships between the different domains of CSR and second and,
  2. it rejects the hierarchical order of importance.

Diagram 2 shows the pictorial representation of the model.

Intersecting Circle (IC) CSR model
Figure 2: Intersecting Circle (IC) CSR model

Carroll’s pyramid model could not properly capture the interpenetrating nature of the different domains of CSR nor does the model was successful in reflecting the possible tension points. However, this mutuality has been considered an integral characteristic of CSR. This model clearly includes all the possible domains of CSR and hence could clearly depict the picture of the interrelationships between the different domains.

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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 corporates 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 society to support them (Ma, 2012).

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 that non-economic social responsibilities are the one that embraces core economic responsibilities.

Concentric Circle CSR model
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 of the inner circle is part of the wider circle (Kaman, 2015).

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 which focuses on employing 5 million women in 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 healthcare facilities and education to their employees.

Furthermore, Salesforce 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

  • Carroll, A. B. (2016). Carroll’s pyramid of CSR: taking another look. International Journal of Corporate Social Responsibility, 1(3).
  • Gavin, M. (2019). 3 EXAMPLES OF CORPORATE SOCIAL RESPONSIBILITY THAT WERE SUCCESSFUL.
  • Ivesha, B. (2008). Corporate Social Responsibility Policy.
  • Kaman, Z. (2015). Corporate Social Responsibility (CSR) Models: An Approach to Environmental Perspective. International Research Journal of Engineering and Technology, 23(2), 151–167.
  • Ma, J. (2012). A Study on the Models for Corporate Social Responsibility of Small and Medium Enterprises. Physics Procedia, 25, 435–442. https://doi.org/10.1016/j.phpro.2012.03.108
  • Schwartz, M., & Carroll, A. (2003). Corporate Social Responsibility: A Three-Domain Approach. Business Ethics Quarterly, 13, 503–530.
  • Zu, L. (2009). Corporate Social Responsibility, Corporate Restructuring and Firm’s Performance. Berlin: Springer.

Priya is the co-founder and Managing Partner of Project Guru, a research and analytics firm based in Gurgaon. She is responsible for the human resource planning and operations functions. Her expertise in analytics has been used in a number of service-based industries like education and financial services.

Her foundational educational is from St. Xaviers High School (Mumbai). She also holds MBA degree in Marketing and Finance from the Indian Institute of Planning and Management, Delhi (2008).

Some of the notable projects she has worked on include:

  • Using systems thinking to improve sustainability in operations: A study carried out in Malaysia in partnership with Universiti Kuala Lumpur.
  • Assessing customer satisfaction with in-house doctors of Jiva Ayurveda (a project executed for the company)
  • Predicting the potential impact of green hydrogen microgirds (A project executed for the Government of South Africa)

She is a key contributor to the in-house research platform Knowledge Tank.

She currently holds over 300 citations from her contributions to the platform.

She has also been a guest speaker at various institutes such as JIMS (Delhi), BPIT (Delhi), and SVU (Tirupati).

 

I am a master's in Economics from Amity university. Besides my keen interest in Economics i have been an active member of the team Enactus. Apart from the academics i love reading fictions. 

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