Question

Corporate Social Responsibility (CSR) is an initiative to assess and take responsibility for a company’s impact on the environment and social wellbeing of the planet. It applies to efforts a company imparts, which go beyond what is mandated by laws and regulations. When it comes to corporate social responsibility (CSR), do you think companies should lean toward Milton Friedman’s (economic freedom) or Archie Carroll's (pyramid) ideology? Explain why you think your answer is better for the company and its stakeholders

Answer 1

CORPORATE SOCIAL RESPONSIBILITY (CSR):

Corporate social responsibility is a business model where the corporate are socially accountable for its stakeholders, itself and for the people and the society they are serving for.

CSR is a business practice that results sustainable development into a company's business model. It has a positive impact on social, economic and environmental factors.

CSR activities also helps a company to built its image, and its’ brand value. A CSR program is an opportunity for companies to demonstrate their good corporate citizenship and protect the company from outsized risk by looking at the whole social and environmental sphere that surrounds the company.

I think a company should lean towards Archie Carroll’ (pyramid) ideology, than Milton Friedman’s (economic freedom).

Milton Friedman’s economic freedom:

In this he talks about the freedom for people to take economic actions without the interference of government rules and regulations.

Economic freedom is the fundamental right of every human to control his or her own labor and property. In an economically free society, individuals are free to work, produce, consume, and invest in any way they please.

Economic freedom has two points:

1. Private property right: it includes two main rights, namely the right to control and benefit from property and the right to transfer property by voluntary means. And it assures no political or government interference in this.
2. Freedom of contract: it is the right to choose one's contracting parties and to trade with them on any terms and conditions one sees fit. Contracts permit individuals to create their own enforceable legal rules, adapted to their unique situations.

So CSR is an initiative to assess and take responsibility for a company’s impact on the environment and social wellbeing of the planet. It applies to efforts a company imparts, which go beyond what is mandated by laws and regulations. But Milton Friedman’s is concentrated only in the development of the individual economic position, it has nothing to do with the social responsibility of a corporate and to create brand image through that.

Archie Carroll's (pyramid) ideology:

According to this theory there are 4 responsibility of a corporate explained with the help of a pyramid.

1. Economic responsibility: in this its says that the corporate responsibility is to run a profitable business. This is required by the society, its employee and even by the stake holders.
2. Legal responsibility: it says to obey all the rules and regulation of the particular are they are running their business. Example: health and security, employment law, labor law, environmental law.
3. Ethical responsibility: it is expected to do the business morally and ethically, and should not have an immoral way of earning profit by harming other.
4. Philanthropic Responsibility: this is what is desired by the society to give back to the society in which they are running their business.

I think this a corporate should lean toward Archie Carroll’s pyramid because it is having all the aspect in it , and also having the profitable business. Because only if a corporate is able to earn profit through its business then only it will be able contribute toward the society. And this is also feasible from the point of view of company’s stakeholders even.