Carrolls Pyramid of Corporate Social Responsibility based on Thames Water - Case Study Example

Carroll’s Pyramid of Corporate Social Responsibility Introduction The main purpose of the essay is to highlight the corporate social responsibility activities that are undertaken by Thames Water, which is a privatized water company in Greater London. Additionally, role of Thames Water is critically analyzed in terms of Carroll’s pyramid of Corporate Social Responsibility. In order to explain the CSR activities of Thomas Water in terms of Carroll’s pyramid, the framework is explained briefly. The legal, ethical and philanthropic responsibilities of the company are critically analyzed so as to understand whether it has lived up to the responsibilities and suggestions are provided if any improvements are required. Carroll’s Pyramid of Corporate Social Responsibility According to Carroll (1983), corporate social responsibility (CSR) considers few activities of a business, which helps in increasing its profit and in doing so the company should also abide by the rules and regulations that are associated with law and ethics. In order to become socially responsible, a company has to obey laws and conditions that define company’s ethics. The author has organized the different corporate social responsibilities under four layers, which are provided in a pyramid and it is named as pyramid of responsibilities (Visser, 2005). According to the pyramid the four responsibilities are legal, economical, ethical and philanthropic. Carroll and Buchhotlz (2003) have explained that the pyramid should be considered as a whole and the layers are not separated as it does not make any sense. Figure 1: Carrolls CSR pyramid (Source: Carroll, 1991) The figure presents the different layers of the pyramid that aims at describing the responsibilities of a company to the society. Economic responsibilities: The economic responsibilities indicate the methods that are employed for minimizing the cost and maximizing the sales or even devise strategic decisions, which will generate profit. The economic responsibilities are very important for the society and the company has to take these decisions very carefully (Carroll, 1979). The companies have to fulfil the demand of the shareholders for increased returns on their investment. The companies should employ those employees, who want fair paid jobs and they are also responsible for providing good quality products to the customers at a reasonable rate (Barth and Wolff, 2009). Hence, the primary responsibility of a business is to form a proper functioning unit and operate their business. Therefore, this is the base of the pyramid to which all the layers are connected (Dudovskiy, 2012). Legal responsibilities: The companies are predicted to abide by rules and regulations that are levied by the higher authorities. This norm reflects the strictness of the society towards operation of a business. The companies may choose to ignore or bend the legal responsibilities, which can be expensive to the companies (Dudovskiy, 2012). Ethical responsibilities: It is interesting to understand the difference between ethical responsibilities and the first two layers, which indicates that the latter is needed by the society and the former is rather expected. In order to avoid issues pertaining to ethics, the questionable practices are avoided and particular standards are maintained (Dudovskiy, 2012). Philanthropic responsibilities: The philanthropic responsibilities are at the top of pyramid; it generally concentrates on the luxurious things that aim at improving the life of an individual in the society (Negus, 2009). It can be stated that it is the duty of a company to be a good corporate citizen and concentrate on improving the quality of life of the society (Carroll, 1979). Different corporate social responsibility programs which support the community are known as philanthropic responsibilities. This responsibility helps in contributing towards success of the company. In this case, the responsibilities are expected and desired by society (Carroll, 1991). Corporate Social Responsibility of Thames Water Thames Water is committed at continuing a sustainable and responsible business. The company has embraced sustainable development for ensuring an enhanced quality of life for the society and for the upcoming generations (Thames Water, 2015a). It conducts its business with integrity, openness and transparency; the company also respects needs of the natural environment, customers and communities. The decisions taken by the management aims at delivering sustainable results over a longer period of time. Hence, the company is identified to follow three important behaviours, which have helped the company to work effectively (Thames Water, 2015a). 1) Living the core values of the company: The value aims at summarizing the beliefs followed by the company. These values are highlighted in such a manner in which company should behave. The success of the business stems from the values and thus the employees and management have to abide by the act (Thames Water, 2015a; Thames Water, 2015b). 2) Respond to the expectations of others: The business activities form an integral part of the society (Thames Water, 2015a). The main objective of the company is to understand the expectation of the society and seek its opportunities to fulfil the demands of the customers and investors i.e. the stakeholders. Thames Water develops a good working environment so as to satisfy the stakeholders and create a good relationship with the society (Thames Water, 2015a). 3) Respect the world: The business of Thames Water is closely attached to the natural resource, which is essential to life. The company generally operates in monopoly so the company operates in such a way that its activities have positive contribution to the customers and have the ability to impact the industry in the near future so as to deliver sustainability (Thames Water, 2015a). The CSR activities of Thames Water can be connected with Carroll’s Pyramid CSR. This association is depicted henceforth: 1) Economic responsibility: Thames Water concentrates on providing cost effective and accessible services to the customers. It not only provides reliable and safe water supply to the population in London but also offers sanitation services (Thames Water, 2015a). This is one of the major responsibilities of the company as it has to serve the country in such a manner that can derive economic benefits. The company treats the customers fairly and encourage them to use services wisely. The services provided to the customers are affordable and accessible. Thames Water also undertakes restoration so as to secure its future from any failures (Thames Water, 2015a). Thames Water builds trust in the communities, where they serve and acts as a responsible neighbour. The company has undertaken a lot of efforts to accomplish planned and unplanned works. This works are basically directed at minimising the disruptions that are caused in the community (Thames Water, 2015a). The unplanned and planned works are carried out efficiently for minimising any disruptions caused in the society. It has also invested money and time in valuable water projects, which aims at delivering improvements in wildlife, education of customers and young people. Being a responsible corporate citizen, Thames Water has increased public awareness by improving their knowledge regarding reserved water usage and preservation. The information is provided in the official website of the company (Thames Water, 2015a). Thames Water has assisted the foreigners in the UK by enhancing the water-related attractions. 2) Legal: Thames Water works in partnership with the contractors, suppliers and service providers for improving the efficiency and productivity of the supply chain. It aims at fostering a long term, fair, productive and stable business relationship. It pays the suppliers, service providers and contractors according to the terms and conditions that are depicted in the contracts in the beginning of the project. The sustainable performance is measured and improved with the help supply chain (Thames Water, 2015a). 3) Ethical: Environment forms an integral and fundamental part of the business and hence every business seeks to deliver continuous improvement in the overall performance of the environment. Thames Water aims at measuring, identifying and managing the effect of its operation in a systematic manner. This is one of the ethical responsibilities adopted by the company towards the environment. The company set targets for long term achievements and plan accordingly, which starts from business decision making. The decisions are taken in order to make sustainable solutions in the daily investment programs and operations. As Thames Water operates in monopoly market, it has the responsibility to deliver the best service to the customers. Hence, it utilises innovative programs for delivering sustainable solutions to the customers pertaining to the usage of the natural resources (Thames Water, 2015a). The employee is the main focus of a business, whose contribution is significant enough for its success. Thames Water maintains a diverse workforce and treats everyone equally. In order to avoid ethical issues, it is the responsibility of the company to ensure equal opportunities to each and every employee (Thames Water, 2015a). The talent and skills forms the base of their recruitment in the company. They are given opportunity to work on their potential and concentrate on career advancement. The employees are not discriminated irrespective of the factors such as marital status or civil partnership, sex, health, race, nationality, colour, age, sexual orientation, pregnancy, political opinion, trade union and ethnic background. Thames Water invests a lot of money in developing the skills of the employees, abilities and their potential. It also ensures that the employees are safe in the workplace and also takes care of the welfare of the workforce (Thames Water, 2015a). Hence, it can be indicated that the company has concentrated on fulfilling its ethical responsibilities efficiently. It is observed that Thames Water does not take into account philanthropic responsibilities, which mainly focus on organising big programs that will help the society to trust on the band. Hence, Thames Water should undertake charity and water conservation programs in order to assist the society in reducing wastage of water and conserve it for bright future. Water Regulation by Thames Water During 1999, the water supply companies in the UK published Water Byelaws for protecting the public water supply from getting wasted, misused and contaminated. It is also called the Water Supply (Water Fittings) Regulations 1999. The regulation helped the water companies to spread awareness regarding the misuse and waste of water. The customers are advised to change the plumbing system at a regular interval. The water companies should incorporate reverse osmosis i.e. water purifier in order to ensure that the water are fresh enough to protect the health of the individuals in the UK (Thames Water, 2015c). Extended view of corporate citizenship Corporate citizenship highlights the realization of corporations for administering the rights of the individuals in a society (Banerjee, 2011). The definition reframes the concept of corporate citizenship and creates a separate notion that companies are citizen who acknowledge and administers the individuals in the society. It is not right to state that only the governments are administering the rights, the corporations are also responsible for governing the community in which they operate (Mullert, 2010; Nelson, 2010). Figure 2: Extended view of corporate citizenship (Source: Miller, 1998) The figure highlights the social role played by a company in administering the rights of citizenship. The figure depicts that a company have social, political and civil rights, which it can use for channelling the business. Social rights aim at managing the apporpriate social services. Hence, the companies have the right to administer by selecting an appropriate role. However, in case of civil rights, the companies are either constrained citizen or capacitated citizen with all the rights for enabling a role. The political rights 0are essentially an important and additional medium for exercising the political rights of the individuals (Reich, 1998; Reilly and Kyj, 1994; Ronit and Schneider, 1999; Scherer and Smid, 2000). It is quite evident that the extended view indentifies the major challenge that is associated with performance of model. The model depicts the full cost recovery, which is inflexible application of the model (Reich, 1998; Reilly and Kyj, 1994; Ronit and Schneider, 1999; Scherer and Smid, 2000). However, the application of the model may lead to increase in price of the product, which is quite unaffordable for the poor in the society. In case of water companies, if they use their rights of increasing the price of water then it is impossible for the poor to survive without this natural resource in the society. Conclusion The CSR activities of Thames Water can be associated with Carroll’s CSR pyramid. It is observed that Thames Water has undertaken all the responsibilities that are given in the pyramid except philanthropic as it has not adopted any charity programs or big programs, which can increase the goodwill of the company. These responsibilities have assisted Thames Water to satisfy the community it operates. It has also helped the company to encourage the public for preserving water. 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