The Importance Of Corporate Social Responsibility In Business

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Register to read the introduction… The Pyramid of Corporate Social Responsibility has four key components which can be arranged into a pyramid form. Starting from the bottom up, the components are lined up as followed, Economic Responsibilities, Legal Responsibilities, Ethical Responsibilities and lastly Philanthropic Responsibilities.

Economic Responsibilities means that the organization must have adequate profit to be profitable and also be able to cover their operational and financial expenses, which includes paying investors. Legal Responsibilities means that all organisations are expected to follow and obey the relevant laws globally. Law refers to standards and guidelines for fair and ethical practices. Organisations should and must include legal issues into corporation management and always consider legal implications/issues when making business decisions. It is very important that organisations ensure that their operations and procedures comply with the minimum standard of the law and also be ethical at the same time. Ethical Responsibilities also known as moral management is also deployed by organisations. Social issues are very often hard to be address by the law and organisations are encouraged to think and consider how their decisions can affect socially. Ethical responsibilities also put focus on the relationship between corporation behaviour and society. Lastly at the top of the pyramid is Philanthropic Responsibilities. This is by far the most challenging and difficult component to businesses globally. Businesses are constantly challenged to have the belief that paying back to society can improve the standard of life. The activities at this level are often known as charity and voluntary. Organisations that engage themselves in philanthropic activities are making a better future for communities and stakeholders. (Carroll 1991 and
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5, pg 40-51

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