The pyramid of corporate social responsibility - article review - Book Report/Review Example

Archie B. Carroll. (1991). The Pyramid of Corporate Social Responsibility: Toward the Moral Management of OrganizationalStakeholders. Business Horizons. 34(4), 39-48 Introduction In the book, “The Pyramid of Corporate Social Responsibility: Toward the Moral Management of Organizational Stakeholders”, Carroll B, Archie introduces the various levels of social responsibilities along with a pyramid of corporate responsibilities. He describes three types of moral or ethical approaches and their orientation towards stakeholders.

The main purpose of writing this article is to put forward a clear understanding of responsibilities and ethics expected in a business setting. Although the author states these ideas to isolate the moral components of corporate social responsibility, stakeholder management in a moral fashion is not easily acquired. Background Information The article was published to give an in-depth description of what needs to be done in order to establish social responsibility in business environment. Previously corporate executives had a hard time solving the issue of firms’ responsibilities to its societies (Carroll 39).

Following the regulations enacted by governmental bodies to control firms and introduce stakeholder policies, there was a need to clarify the concepts of social and stakeholder responsibility. Summary Social responsibility idea among corporations has undergone several steps. In the past, the most prevailing belief was that firms were only responsible for maximizing profits. With time, there emerged a concept that organizations have moral and unrestricted responsibility to the society. This article establishes a background for corporate firm obligations and illustrates the guidelines to achieving social responsibility, which has been a long struggle.

Carroll develops a policy that consists of a pyramid with four different responsibility levels namely, ethical responsibility, economic, legal, philanthropic, and ethical responsibility (Carroll 40). The pyramid of social responsibility among firms illustrates levels of responsibilities starting with the economic one at its base, which provides that the firm’s primary responsibility is to meet the needs of the market by producing goods and services of high demand, with the aim of making profit.

The legal responsibility comes second on the pyramid with requirement that a business should not only be profit oriented, but also comply the regulations and laws documented by the state and local government. The ethical responsibility of the pyramid embraces the practices and activities that are prohibited or expected by the society even though they are not included in law. It embodies those norms, standards, and expectations that concern consumers, shareholders, employees, and the society regard as fair and just.

Philanthropic responsibilities, includes those corporate activities that respond to society’s expectations that firms be good corporate “citizens.” it should actively engage in programs that promote human welfare such as financial and human resource contributions. Though philanthropy may seem less significant, most firms prefer working by it. The author goes ahead to discuss the types of moral management and how they link to key stakeholder groups. The three moral types include moral, immoral, and amoral management.

Immoral management features include managerial skills of which decisions, behavior, and actions oppose what is ethical. The second main type of management ethics is the amoral management. Managers who are amoral are neither moral nor immoral but do not care that their daily business decisions negatively affect others (Carroll 44). They lack ethical; awareness or perception. Two kinds of amoral managers have been discussed. Unintentional amoral managers do not realize that their actions have an impact, or may be inattentive or careless to their implications though they may be well intentioned.

Intentional amoral managers perceive that ethical considerations are meant for private lives and not for their business. To them, business activity is out of the business sphere to which ethical judgment apply. The third and last moral type is moral management which provides that, norms that adhere to high level standards of right behavior are practiced. In the article, Carroll proposes profiles of what stakeholders’ orientation is towards the main stakeholder groups applying the three moral approaches (Carroll 45).

He mentions five major stakeholder sets recognized by most businesses. These are shareholders (owners), customers, employees, local communities, and the entire society. The general moral obligation to each of these groups is identical, that is, protecting their rights, and treats them with fairness and respect. However, orientations and behaviors arise due to the differing nature of the sets. Of these three groups, immoral management is the most exploitive while moral management considers the welfare and satisfaction of its stakeholders and is viewed as a basis for excellent leadership.

Evaluation From this article, it is quite evident that most managers are likely to adopt the attractive ethics to their firms in order to improve managerial skills. However, the proposed types of management may not be an easy task for firms to achieve due to difference in what people consider to be morally bright or wrong. Financial shortages are also a hindrance in applying all the levels of the pyramid. Most significantly, businesses must maximize profits but still have to operate under government regulations.

Most managers fall under the immoral manager category due to their profit-driven goals yet do it at lower expenses. For a successful business, managers are required to be moral and focus on the concepts of philanthropy for them to increase profits. Firms can invest in the welfare of the society by funding communal organizations thus attracting customers (Carroll 48). Direct comment Conclusively, the article is an outstanding build-up towards the idea of improving moral organizational climate as shown by ethical management.

Leadership by example is preferred as the most efficient way in improving business morals. As much as achieving these social responsibilities may be challenging, all members of the society benefit from their applications. Reference Carroll, Archie. “The Pyramid of Corporate Social Responsibility: Toward the Moral Management of Organizational Stakeholders”. Business Horizons. 34(4), (1991): 39- 48.Print.