The Pyramid of Corporate

Social Responsibility: Toward

the Moral Management of
Organizational Stakeholders
A r c h i e B. Car r ol l
F or t he bet t er part of 30 year s now, cor po-
rat e execut i ves have st r uggl ed wi t h t he
issue of t he fi rm' s responsi bi l i t y t o its soci-
ety. Early on it was ar gued by s ome t hat t he
cor por at i on' s sol e responsi bi l i t y was to pr ovi de a
ma x i mu m fi nanci al r et ur n t o shar ehol der s. It
be c a me qui ckl y a ppa r e nt to ever yone, however ,
t hat this pursui t of fi nanci al gai n had t o t ake
pl ace wi t hi n t he l aws of t he land. Though soci al
activist gr oups and ot her s t hr oughout t he 1960s
advocat ed a br oa de r not i on of cor por at e r es pon-
sibility, it was not until t he significant soci al legis-
l at i on of t he earl y 1970s t hat this mes s age be-
came i ndel i bl y cl ear as a resul t of t he cr eat i on of
t he Envi r onment al Pr ot ect i on Agency (EPA), t he
Equal Empl oyme nt Oppor t uni t y Commi ssi on
(EEOC), t he Occupat i onal Safety and Heal t h Ad-
mi ni st rat i on (OSHA), and t he Cons umer Pr oduct
Safety Commi ssi on (CPSC).
Thes e ne w gover nment al bodi es est abl i shed
t hat nat i onal publ i c pol i cy now officially r ecog-
ni zed t he envi r onment , empl oyees , and cons um-
ers to be significant and l egi t i mat e st akehol der s
of busi ness. Fr om t hat t i me on, cor por at e execu-
tives have had to wrest l e wi t h h o w t hey bal ance
t hei r commi t ment s to t he cor por at i on' s owner s
wi t h t hei r obl i gat i ons to an e ve >br oa de ni ng
gr oup of st akehol der s wh o cl ai m bot h legal and
et hi cal rights.
Thi s article will expl or e t he nat ur e of cor po-
rat e soci al responsi bi l i t y (CSR) wi t h an eye t o-
war d under s t andi ng its c o mp o n e n t parts. The
i nt ent i on will be to char act er i ze t he fi rm' s CSR in
ways t hat mi ght be useful to execut i ves wh o
wi sh t o r econci l e t hei r obl i gat i ons to t hei r share-
hol der s wi t h t hose t o
ot her compet i ng gr oups
cl ai mi ng l egi t i macy.
Thi s di scussi on will be
f r amed by a pyr ami d of
cor por at e soci al r es pon-
sibility. Next, we pl an
to rel at e this concept t o
t he i dea of st akehol d-
ers. Finally, our goal
will be to isolate t he
et hi cal or mor al c ompo-
nent of CSR and rel at e
it to per spect i ves t hat
S oc i al res pons i bi l i ty
c an onl y b ec o me
reafi ty i f mo r e man -
ager s b ec o me
mo r al i ns tead o f
amo r al or i mmoral .
reflect t hr ee maj or ethical a ppr oa c he s to manage-
me n t - i mmo r a l , amoral , and moral . The princi-
pal goal in this final sect i on will be to fl esh out
what it means t o ma na ge st akehol der s in an ethi-
cal or mor al fashi on.
E V OL U T I ON OF CORP ORAT E
S OCI AL RE S P ONS I B I L I T Y
Wp
hat does it me a n for a cor por at i on to
be soci al l y responsi bl e? Academi cs and
ract i t i oners have be e n striving to est ab-
lish an a gr e e d- upon defi ni t i on of this concept for
30 years. In 1960, Kei t h Davi s s ugges t ed t hat
social responsi bi l i t y refers t o busi nesses' "deci -
si ons and act i ons t aken for r easons at l east par-
tially be yond t he fi rm' s di rect economi c or t ech-
nical interest. " At about t he s ame time, Eells and
Wal t on (1961) ar gued t hat CSR refers to t he
"pr obl ems t hat arise wh e n cor por at e ent er pr i se
casts its s ha dow on t he soci al scene, and t he
The Pyramid of Corporate Social Responslblhty 39
Fi gure 1
Ec o n o mi c a nd Legal Co mp o n e n t s o f Cor por at e Soci al Re s po ns i bi l i t y
Economic Components
(Responsibilities)
1. It is important to perform in a
manner consistent with
maximizing earnings per share.
2. It is irnportant to be committed to
being as profitable as possible.
3. It is important to maintain a strong
competitive position.
4. It is important to maintain a high
level of operating efficiency.
5 It is i mpor t a nt t hat a s ucces s f ul
f i r m b e de f i ne d as o n e t hat is
cons i s t ent l y pr of i t abl e.
2.
3.
5.
Legal Components
(Responsibilities)
It is important to perform in a
manner consistent with expecta-
tions of government and law.
It is i mpor t a nt t o c o mp l y wi t h
va r i ous f eder al , state, a nd l ocal
r egul at i ons.
It is important to be a law-abiding
corporate citizen.
It is important that a successful
firm be defined as one that fulfills
its legal obligations.
It is i mpor t a nt t o pr ovi de g o o d s
a nd s er vi ces t hat at l east me e t
mi ni ma l l egal r e qui r e me nt s .
ethical principles that ought to govern the rela-
tionship bet ween the corporation and society."
In 1971 the Committee for Economic Devel-
opment used a "three concentric circles" ap-
proach to depicting CSR. The inner circle in-
cluded basic economi c funct i ons--growt h, prod-
ucts, jobs. The intermediate circle suggested that
the economi c functions must be exercised with a
sensitive awareness of changing social values and
priorities. The outer circle outlined newly emerg-
ing and still amorphous responsibilities that busi-
ness should assume to become more actively
involved in improving the social environment.
The attention was shifted from social respon-
sibility to social responsiveness by several other
writers. Their basic argument was that the em-
phasis on responsibility focused exclusively on
the notion of business obligation and motivation
and that action or performance were being over-
looked. The social responsiveness movement,
therefore, emphasized corporate action, pro-
action, and implementation of a social role. This
was indeed a necessary reorientation.
The question still remained, however, of
reconciling the firm's economi c orientation with
its social orientation. A step in this direction was
taken when a comprehensive definition of CSR
was set forth. In this view, a four-part conceptu-
alization of CSR included the idea that the corpo-
ration has not only economi c and legal obliga-
tions, but ethical and discretionary (philan-
thropic) responsibilities as well (Carroll 1979).
The point here was that CSR, to be accepted as
legitimate, had to address the entire
spectrum of obligations business has to
society, including the most fundamen-
t al - economi c. It is upon this four-part
perspective that our pyramid is based.
in recent years, the term corporate
social performance (CSP) has emerged
as an inclusive and global concept to
embrace corporate social responsibility,
responsiveness, and the entire spectrum
of socially beneficial activities of busi-
nesses. The focus on social performance
emphasizes the concern for corporate
action and accomplishment in the social
sphere. With a performance perspective,
it is clear that firms must formulate and
implement social goals and programs as
well as integrate ethical sensitivity into
all decision making, policies, and ac-
tions. With a results focus, CSP suggests
an all-encompassing orientation towards
normal criteria by which we assess busi-
ness performance to include quantity,
quality, effectiveness, and efficiency.
While we recognize the vitality of the
performance concept, we have chosen
to adhere to the CSR terminology for our
present discussion. With just a slight change of
focus, however, we could easily be discussing a
CSP rather than a CSR pyramid. In any event, our
long-term concern is what managers do with
these ideas in terms of implementation.
THE PYRAMID OF CORPORATE
SOCIAL RESPONSIBILITY
F or CSR to be accepted by a conscientious
business person, it should be framed in
such a way that the entire range of busi-
ness responsibilities are embraced. It is suggested
here that four kinds of social responsibilities con-
stitute total CSR: economic, legal, ethical, and
philanthropic. Furthermore, these four categories
or component s of CSR might be depicted as a
pyramid. To be sure, all of these kinds of respon-
sibilities have always existed to some extent, but
it has only been in recent years that ethical and
philanthropic functions have taken a significant
place. Each of these four categories deserves
closer consideration.
Ec o no mi c Res pons i bi l i t i es
Historically, business organizations were created
as economi c entities designed to provide goods
and services to societal members. The profit mo-
tive was established as the primary incentive for
entrepreneurship. Before it was anything else, the
business organization was the basic economi c
unit in our society. As such, its principal role was
40 Business Horizons /July-August 1991
to produce goods and services that con-
sumers needed and want ed and to make
an acceptable profit in the process. At
some point the idea of the profit motive
got transformed into a notion of maxi mum
profits, and this has been an enduring
value ever since. All other business re-
sponsibilities are predicated upon the eco-
nomic responsibility of the firm, because
without it the others become moot consid-
erations. Fi gur e 1 summarizes some im-
portant statements characterizing economi c
responsibilities. Legal responsibilities are
also depicted in Figure 1, and we will
consider them next.
Legal Responsibilities
Figure 2
Ethical and Philanthropic Components of
Corporate Social Responsibility
1.
2.
3.
Society has not only sanctioned business
to operate according to the profit motive;
at the same time business is expected to
compl y with the laws and regulations pro-
mulgated by federal, state, and local gov-
ernments as the ground rules under whi ch
business must operate. As a partial fulfill-
ment of the "social contract" bet ween busi-
ness and society, firms are expected to
pursue their economi c missions within the
framework of the law. Legal responsibili-
ties reflect a view of "codified ethics" in
the sense that they embody basic notions
of fair operations as established by our lawmak-
ers. They are depicted as the next layer on the
pyramid to portray their historical development,
but they are appropriately seen as coexisting with
economi c responsibilities as fundamental pre-
cepts of the free enterprise system.
Ethical Responsibilities
Although economi c and legal responsibilities
embody ethical norms about fairness and justice,
ethical responsibilities embrace those activities
and practices that are expected or prohibited by
societal members even t hough they are not codi-
fied into law. Ethical responsibilities embody
those standards, norms, or expectations that re-
flect a concern for what consumers, employees,
shareholders, and the communi t y regard as fair,
just, or in keeping with the respect or protection
of stakeholders' moral rights.
In one sense, changing ethics or values pre-
cede the establishment of law because they be-
come the driving force behind the very creation
of laws or regulations. For example, the environ-
mental, civil rights, and consumer movement s
reflected basic alterations in societal values and
thus may be seen as ethical bellwethers foreshad-
owing and resulting in the later legislation. In
another sense, ethical responsibilities may be
Ethical Components
(Responsibilities)
It is important to perform in a
manner consistent with expecta-
tions of societal mores and ethical
norms.
It is important to recognize and
respect new or evolving ethical/
moral norms adopted by society.
It is important to prevent ethical
norms from being compromised in
order to achieve corporate goals.
4. It is important that good corporate
citizenship be defined as doing what
is expected morally or ethically.
5. It is important to recognize that
corporate integrity and ethical
behavior go beyond mere compli-
ance with laws and regulations.
3.
4.
5.
Philanthropic Components
(Responsibilities)
It is tmportant to perform in a
manner consistent with the philan-
thropic and charitable expectations
of society.
It is important to assist the fine and
performing arts.
It is important that managers and
employees participate in voluntary
and charitable activities within their
local communities.
It is important to provide assis-
tance to private and public educa-
tional institutions.
It is important to assist voluntarily
those projects that enhance a
community's "quality of life."
seen as embracing newl y emerging values and
norms society expects business to meet, even
t hough such values and norms may reflect a
higher standard of performance than that cur-
rently required by law. Ethical responsibilities in
this sense are often ill-defined or continually
under public debate as to their legitimacy, and
thus are frequently difficult for business to deal
with.
Superimposed on these ethical expectations
emanating from societal groups are the implied
levels of ethical performance suggested by a
consideration of the great ethical principles of
moral philosophy. This woul d include such prin-
ciples as justice, rights, and utilitarianism.
The business ethics movement of the past
decade has firmly established an ethical responsi-
bility as a legitimate CSR component . Though it is
depicted as the next layer of the CSR pyramid, it
must be constantly recognized that it is in dy-
namic interplay with the legal responsibility cat-
egory. That is, it is constantly pushing the legal
responsibility category to broaden or expand
while at the same time placing ever higher ex-
pectations on businesspersons to operate at lev-
els above that required by law. Fi gur e 2 depicts
statements that help characterize ethical responsi-
bilities. The figure also summarizes philanthropic
responsibilities, discussed next.
The Pyramid of Corporate Social Responslblli W 41
Figure 3
The Pyramid of Corporate Social Responsibility
PHILANTHROPIC
Responsibilities \
Be a good corporate c i t i z e n . \
Contribute resources \
to the community; \
improve quality of life. \
ETHICAL
Responsibilities
Be ethical.
Obligation to do what is right, just, \
and fair. Avoid harm.
LEGAL
Responsibilities
Obey the law. , \
Law is society's codification of right and wrong. \
Play by the rules of the g a m e . ~
ECONOMIC
Responsibilities
Be profitable.
The foundation upon which all others rest. \
\
Philanthropic Responsibilities
Phi l ant hr opy e nc ompa s s e s t hose cor por at e ac-
t i ons t hat are in r es pons e t o soci et y' s expect at i on
t hat busi nesses be good cor por at e citizens. Thi s
i ncl udes act i vel y engagi ng in acts or pr ogr ams to
pr omot e huma n wel f ar e or goodwi l l . Exampl es of
phi l ant hr opy i ncl ude busi ness cont r i but i ons of
fi nanci al r esour ces or execut i ve time, such as
cont r i but i ons to t he arts, educat i on, or t he com-
muni t y. A l oaned- execut i ve pr ogr a m t hat pr o-
vi des l eader shi p for a communi t y' s Uni t ed Way
campai gn is one illustration of phi l ant hr opy.
The di st i ngui shi ng feat ure be t we e n phi l an-
t hr opi c and et hi cal responsi bi l i t i es is t hat t he
f or mer are not expect ed in an et hi cal or mor al
sense. Communi t i es desi re firms to cont r i but e
t hei r money, facilities, and e mpl oye e t i me t o
humani t ar i an pr ogr ams or pur pos es , but t hey do
not r egar d t he firms as unet hi cal if t hey do not
pr ovi de t he desi r ed level. Ther ef or e, phi l an-
t hr opy is mor e di scr et i onar y or vol unt ar y on t he
part of busi nesses even t hough t her e is
al ways t he soci et al expect at i on t hat busi -
nesses pr ovi de it.
One not abl e r eas on for maki ng t he dis-
t i nct i on be t we e n phi l ant hr opi c and ethical
responsi bi l i t i es is t hat s ome firms feel t hey
are bei ng soci al l y r esponsi bl e if t hey are
just good citizens in t he communi t y. Thi s
di st i nct i on bri ngs h o me t he vital poi nt t hat
CSR i ncl udes phi l ant hr opi c cont r i but i ons
but is not l i mi t ed to t hem. I n fact, it woul d
be ar gued her e t hat phi l ant hr opy is hi ghl y
desi r ed and pr i zed but act ual l y less i mpor -
t ant t han t he ot her t hr ee cat egor i es of social
responsi bi l i t y. I n a sense, phi l ant hr opy is
icing on t he c a k e - - o r on t he pyr ami d, us-
ing our met aphor .
The pyr ami d of cor por at e soci al r espon-
sibility is depi ct ed in Fi g u r e 3. It port rays
t he four c ompone nt s of CSR, begi nni ng
wi t h t he basi c bui l di ng bl ock not i on t hat
economi c per f or mance under gi r ds all else.
At t he s ame t i me, busi ness is expect ed t o
obe y t he l aw becaus e t he l aw is soci et y' s
codi fi cat i on of accept abl e and unaccept abl e
behavi or . Next is busi ness' s responsi bi l i t y to
be ethical. At its mos t f undament al level,
this is t he obl i gat i on to do what is right,
just, and fair, and to avoi d or mi ni mi ze
har m to st akehol der s ( empl oyees , cons um-
ers, t he envi r onment , and ot hers). Finally,
busi ness is e xpe c t e d to be a good cor po-
rat e citizen. This is capt ur ed in t he phi l an-
t hr opi c responsi bi l i t y, wher ei n busi ness is
e xpe c t e d t o cont r i but e fi nanci al and h u ma n
r esour ces t o t he c ommuni t y and to i mpr ove
t he qual i t y of life.
No me t a phor is perfect , and t he CSR
pyr ami d is no except i on. It is i nt ended t o por t r ay
t hat t he total CSR of busi ness compr i s es distinct
c ompone nt s that, t aken t oget her, const i t ut e t he
whol e. Though t he c ompone nt s have be e n
t r eat ed as separ at e concept s for di scussi on pur-
poses, t hey are not mut ual l y excl usi ve and are
not i nt ended to j uxt apose a fi rm' s economi c re-
sponsi bi l i t i es wi t h its ot her responsibilities. At t he
s ame time, a consi der at i on of t he separ at e com-
ponent s hel ps t he ma na ge r see t hat t he di fferent
t ypes of obl i gat i ons are in a const ant but dy-
nami c t ensi on wi t h one anot her. The mos t critical
t ensi ons, of course, woul d be be t we e n economi c
and legal, economi c and ethical, and economi c
and phi l ant hropi c. The traditionalist mi ght see
this as a conflict be t we e n a fi rm' s "concer n for
profits" ver sus its "concer n for society, " but it is
s ugges t ed her e t hat this is an oversi mpl i fi cat i on.
A CSR or s t akehol der per spect i ve woul d r ecog-
ni ze t hese t ensi ons as or gani zat i onal realities, but
focus on t he total pyr ami d as a uni fi ed whol e
and h o w t he fi rm mi ght engage in deci si ons,
42 Business Horizons /July-August 199
actions, and pr ogr ams t hat si mul t aneousl y fulfill
all its c o mp o n e n t parts.
I n s ummar y, t he total cor por at e soci al re-
sponsi bi l i t y of busi ness entails t he si mul t aneous
fulfillment of t he fi rm' s economi c, legal, ethical,
and phi l ant hr opi c responsi bi l i t i es. Stated in mor e
pr agmat i c and manager i al t erms, t he CSR fi rm
shoul d strive to ma ke a profit, o b e y t he law, be
ethical, and be a good cor por at e citizen.
Upon first gl ance, this array of responsi bi l i -
ties ma y s e e m br oad. They s e e m to be in st ri ki ng
cont rast to t he classical e c onomi c ar gument t hat
ma na ge me nt has one responsi bi l i t y: t o maxi mi ze
t he profits of its owner s or shar ehol der s. Econo-
mi st Milton Fr i edman, t he mos t out s poke n pr opo-
nent of this vi ew, has ar gued t hat soci al mat t ers
are not t he concer n of busi ness pe opl e and t hat
t hese pr obl ems shoul d be r esol ved by t he
unf et t er ed wor ki ngs of t he free mar ket syst em.
Fr i edman' s ar gument l oses s ome of its punch,
however , wh e n you consi der his asser t i on in its
totality. Fr i edman posi t ed t hat ma na ge me nt is "'to
ma ke as muc h mo n e y as possi bl e whi l e conf or m-
ing to t he basi c rul es of soci et y, bot h t hose em-
bodi e d in t he l aw and t hose e mb o d i e d in et hi cal
cust om" ( Fr i edman 1970). Most pe opl e focus on
t he first par t of Fr i edman' s quot e but not t he
s econd part. It s eems cl ear f r om this st at ement
t hat profits, conf or mi t y to t he law, and et hi cal
cus t om e mbr a c e t hr ee c ompone nt s of t he CSR
pyr a mi d- - e c onomi c , legal, and ethical. That onl y
l eaves t he phi l ant hr opi c c o mp o n e n t for Fr i edman
to reject. Al t hough it ma y be appr opr i at e for an
economi s t to t ake this vi ew, one woul d not en-
count er ma n y busi ness execut i ves t oday wh o
excl ude phi l ant hr opi c pr ogr ams f r om t hei r fi rms'
r ange of activities. It s eems t he rol e of cor por at e
ci t i zenshi p is one t hat busi ness has no significant
pr obl e m embr aci ng. Undoubt edl y this per s pec-
tive is rat i onal i zed under t he rubri c of enl i ght -
ened sel f interest.
We next pr opos e a concept ual f r a me wor k to
assist t he ma na ge r in i nt egrat i ng t he f our CSR
c ompone nt s wi t h or gani zat i onal st akehol der s.
CSR AND ORGANIZATIONAL STAKEHOLDERS
T h e r e is nat ural fit be t we e n t he i dea of
a
cor por at e soci al r esponsi bi l i t y and an
or gani zat i on s st akehol der s. The wor d
"social" in CSR has al ways b e e n vague and l ack-
ing in speci fi c di rect i on as to wh o m t he cor por a-
t i on is r esponsi bl e. The c onc e pt of s t akehol der
per sonal i zes soci al or soci et al responsi bi l i t i es by
del i neat i ng t he speci fi c gr oups or per s ons busi -
ness s houl d consi der in its CSR ori ent at i on. Thus,
t he s t akehol der nomencl at ur e put s "names and
faces" on t he soci et al me mb e r s wh o are mos t
ur gent t o busi ness, and t o wh o m it mus t be re-
sponsi ve.
By n o w mos t execut i ves under s t and t hat t he
t er m "st akehol der" const i t ut es a pl ay on t he wor d
st ockhol der and is i nt ended t o mor e appr opr i -
at el y descr i be t hose gr oups or per s ons wh o have
a st ake, a claim, or an i nt erest in t he oper at i ons
and deci si ons of t he firm. Somet i mes t he st ake
mi ght r epr es ent a l egal claim, such as t hat whi ch
mi ght be hel d by an owner , an empl oyee, or a
cus t omer wh o has an expl i ci t or implicit cont ract .
Ot her t i mes it mi ght be r epr es ent ed by a mor al
claim, such as wh e n t hese gr oups assert a right to
be t r eat ed fairly or wi t h due pr ocess, or t o have
t hei r opi ni ons t aken i nt o consi der at i on in an
i mpor t ant busi ness deci si on.
Management ' s chal l enge is to deci de whi ch
st akehol der s meri t and r ecei ve consi der at i on in
t he deci si on- maki ng process. In any gi ven in-
st ance, t her e ma y be nume r ous st akehol der
gr oups ( shar ehol der s, consumer s, empl oyees ,
suppl i ers, communi t y, soci al activist gr oups )
cl amor i ng for ma na ge me nt ' s attention. Ho w do
manager s sort out t he ur gency or i mpor t ance of
t he var i ous st akehol der claims? Two vital criteria
i ncl ude t he st akehol der s' l egi t i macy and t hei r
power . Fr om a CSR per s pect i ve t hei r l egi t i macy
ma y be mos t i mport ant . Fr om a ma na ge me nt
effi ci ency per spect i ve, t hei r p o we r mi ght be of
cent ral i nfl uence. Legi t i macy refers t o t he ext ent
to whi ch a gr oup has a justifiable right t o be
maki ng its claim. For exampl e, a gr oup of 300
e mpl oye e s about t o be laid off b y a pl ant -cl osi ng
deci si on has a mor e l egi t i mat e cl ai m on ma na ge -
ment ' s at t ent i on t han t he local c ha mbe r of com-
mer ce, whi ch is wor r i ed about l osi ng t he fi rm as
one of its dues - payi ng member s . The st ake-
hol der ' s p o we r is anot her factor. Her e we ma y
wi t ness significant di fferences. Thous ands of
small, i ndi vi dual i nvest ors, for exampl e, wi el d
ver y little p o we r unl ess t hey can fi nd a wa y to
get organi zed. By contrast, institutional i nvest ors
and large mut ual f und gr oups have significant
p o we r over ma n a g e me n t becaus e of t he sheer
magni t ude of t hei r i nvest ment s and t he fact t hat
t hey are organi zed.
With t hese per spect i ves in mi nd, let us t hi nk
of st akehol der ma na ge me nt as a pr ocess by
whi ch manager s r econci l e t hei r o wn obj ect i ves
wi t h t he cl ai ms and expect at i ons bei ng ma de on
t hem by var i ous s t akehol der groups. The chal-
l enge of s t akehol der ma n a g e me n t is t o ensur e
t hat t he fi rm' s pr i mar y st akehol der s achi eve t hei r
obj ect i ves whi l e ot her st akehol der s are al so satis-
fied. Even t hough this "wi n-wi n" out c ome is not
al ways possi bl e, it does r epr es ent a l egi t i mat e
and desi r abl e goal for ma na ge me nt to pur s ue to
pr ot ect its l ong- t er m interests.
The i mpor t ant f unct i ons of s t akehol der man-
a ge me nt are to descri be, under st and, anal yze,
and finally, manage. Thus, five maj or quest i ons
mi ght be pos e d to capt ur e t he essent i al i ngredi -
The Pyramid of Corporate Social Responsibdlty 43
Fi gur e 4
S t a k e h o l d e r / Re s p o n s i b i l i t y Mat r i x
Types of CSR
Stakeholders Economic Legal Ethical Philanthropic
Owners
Customers
Employees
Community
Competitors
Suppliers
Social Activist Groups
Public at Large
Others
ent s we ne e d for st akehol der management :
1. Who are our st akehol ders?
2. What are t hei r stakes?
3. What oppor t uni t i es and chal l enges are
pr es ent ed by our st akehol ders?
4. What cor por at e social responsi bi l i t i es ( eco-
nomi c, legal, ethical, and phi l ant hr opi c) do we
have to our st akehol ders?
5. What strategies, actions, or deci si ons
s houl d we t ake t o best deal wi t h t hese r esponsi -
bilities?
Wher eas muc h coul d be di scussed about
each of t hese quest i ons, let us di rect our at t en-
t i on her e t o quest i on f o u r - - wh a t ki nds of social
responsi bi l i t i es do we have to our st akehol ders?
Our obj ect i ve her e is to pr esent a concept ual
a ppr oa c h for exami ni ng t hese issues. Thi s con-
cept ual a ppr oa c h or f r a me wor k is pr es ent ed as
t he st akehol der / r esponsi bi l i t y mat ri x in Fi g u r e 4.
This mat ri x is i nt ended to be us ed as an ana-
lytical t ool or t empl at e to organi ze a manager ' s
t hought s and i deas about what t he fi rm ought to
be doi ng in an economi c, legal, ethical, and phi l -
ant hr opi c sense wi t h r espect t o its i dent i fi ed
st akehol der gr oups. By careful l y and del i ber at el y
movi ng t hr ough t he var i ous cells of t he matrix,
t he ma na ge r ma y devel op a significant descri p-
tive and analytical dat a bas e t hat can t hen be
us ed for pur pos es of s t akehol der management .
The i nf or mat i on resul t i ng f r om this s t akehol der /
responsi bi l i t y anal ysi s shoul d be useful wh e n
devel opi ng priorities and maki ng bot h l ong- t er m
and shor t - t er m deci si ons i nvol vi ng mul t i pl e
st akehol der ' s interests.
To be sure, t hi nki ng in st akehol der -
responsi bi l i t y t er ms i ncreases t he com-
pl exi t y of deci si on maki ng and ma y be
ext r emel y t i me cons umi ng and taxing,
especi al l y at first. Despi t e its compl exi t y,
however , this a ppr oa c h is one met hodol -
ogy ma na ge me nt can use to i nt egrat e val-
u e s - wh a t it st ands f or - - wi t h t he tradi-
t i onal economi c mi ssi on of t he organi za-
tion. In t he final analysis, such an i nt egra-
t i on coul d be of significant usef ul ness t o
management . Thi s is becaus e t he st ake-
hol der / r esponsi bi l i t y per spect i ve is mos t
consi st ent wi t h t he pluralistic envi r onment
f aced by busi ness t oday. As such, it pr o-
vi des t he oppor t uni t y for an i n- dept h cor-
por at e appr ai sal of fi nanci al as wel l as
social and economi c concer ns. Thus, t he
st akehol der / r esponsi bi l i t y per spect i ve
woul d be an i nval uabl e f oundat i on for
r es pondi ng to t he fifth st akehol der man-
a ge me nt quest i on about strategies, actions,
or deci si ons t hat shoul d be pur s ued t o
effect i vel y r e s pond to t he envi r onment
busi ness faces.
MORAL MANAGEMENT AND
STAKEHOLDERS
A
t this j unct ure we woul d like to e x p o u n d
u p o n t he link be t we e n t he fi rm' s et hi cal
responsi bi l i t i es or per spect i ves and its
maj or s t akehol der gr oups. Her e we are i sol at i ng
t he et hi cal c o mp o n e n t of our CSR pyr ami d and
di scussi ng it mor e t hor oughl y in t he cont ext of
st akehol der s. One wa y t o do this woul d be to
use maj or et hi cal pr i nci pl es such as t hose of jus-
tice, rights, and utilitarianism to i dent i fy and de-
scri be our et hi cal responsi bi l i t i es. We will t ake
anot her al t ernat i ve, however , and di scuss st ake-
hol der s wi t hi n t he cont ext of t hree maj or ethical
a p p r o a c h e s - - i mmo r a l management , amor al man-
agement , and mor al management . Thes e t hr ee
ethical a ppr oa c he s wer e def i ned and di scussed in
an earlier Business Horizons article (Carroll 1987).
We will bri efl y descr i be and r evi ew t hese t hree
ethical t ypes and t hen suggest h o w t hey mi ght be
or i ent ed t owar d t he maj or st akehol der groups.
Our goal is t o profi l e t he likely or i ent at i on of t he
t hr ee et hi cal t ypes wi t h a speci al emphas i s u p o n
mor al management , our pr ef er r ed et hi cal ap-
pr oach.
Thr e e Mor al Type s
If we accept t hat t he t er ms et hi cs and moral i t y
are essent i al l y s ynonymous in t he organi zat i onal
cont ext , we ma y s pe a k of i mmoral , amoral , and
mor al ma na ge me nt as descr i pt i ve cat egor i es of
t hr ee di fferent ki nds of manager s. I mmor al man-
44 Business Horizons /July-August 1991
a ge me nt is char act er i zed by t hose manager s
whos e deci si ons, act i ons, and behavi or suggest
an act i ve oppos i t i on t o what is d e e me d right or
ethical. Deci si ons by i mmor al manager s are dis-
cor dant wi t h accept ed ethical pri nci pl es and,
i ndeed, i mpl y an act i ve negat i on of what is
moral . These manager s care onl y about t hei r or
t hei r or gani zat i on' s profi t abi l i t y and success. They
see l egal st andar ds as barri ers or i mpedi ment s
ma na ge me nt mus t ove r c ome to accompl i s h what
it want s. Thei r st rat egy is t o expl oi t oppor t uni t i es
for per s onal or cor por at e gain.
An e xa mpl e mi ght be hel pful . Many obser v-
ers woul d ar gue t hat Charl es Keat i ng coul d be
descr i bed as an i mmor al manager . Accor di ng to
t he federal gover nment , Keat i ng r eckl essl y and
f r audul ent l y ran Cal i forni a' s Lincoln Savings i nt o
t he gr ound, r eapi ng $34 mi l l i on for hi msel f and
his family. A maj or account i ng fi rm sai d about
Keating: "Sel dom in our exper i ence as accoun-
t ant s have we exper i enced a mor e egr egi ous
e xa mpl e of t he mi sappl i cat i on of gener al l y ac-
cept ed account i ng pri nci pl es" ( " Good Ti mi ng,
Charlie" 1989).
The s econd maj or t ype of ma n a g e me n t et hi cs
is amor al management . Amor al manager s are
nei t her i mmor al nor mor al but are not sensi t i ve
to t he fact t hat t hei r ever yday busi ness deci si ons
ma y have del et er i ous effect s on others. Thes e
manager s l ack et hi cal per cept i on or awar eness.
That is, t hey go t hr ough t hei r or gani zat i onal lives
not t hi nki ng t hat t hei r act i ons have an ethical
di mensi on. Or t hey ma y just be carel ess or inat-
t ent i ve to t he i mpl i cat i ons of t hei r act i ons on
st akehol der s. Thes e manager s ma y be wel l
i nt ent i oned, but do not see t hat t hei r busi ness
deci si ons and act i ons ma y be hurt i ng t hose wi t h
wh o m t hey t ransact busi ness or interact. Typi cal l y
t hei r or i ent at i on is t owar ds t he letter of t he l aw
as t hei r et hi cal gui de. We have b e e n descr i bi ng a
s ub- cat egor y of amor al i t y k n o wn as uni nt ent i onal
amor al manager s. Ther e is al so anot her gr oup we
ma y call i nt ent i onal amor al manager s. Thes e
manager s si mpl y t hi nk t hat et hi cal consi der at i ons
are for our pri vat e lives, not for busi ness. They
bel i eve t hat busi ness activity resi des out si de t he
s pher e to whi ch mor al j udgment s appl y. Though
mos t amor al manager s t oday are uni nt ent i onal ,
t her e ma y still exi st a f ew wh o just do not see a
rol e for et hi cs in busi ness.
Exampl es of uni nt ent i onal amor al i t y abound.
When pol i ce depar t ment s st i pul at ed t hat appl i -
cant s must be 5'10" and wei gh 180 pounds to
qual i fy for posi t i ons, t hey just di d not t hi nk about
t he adver se i mpact t hei r pol i cy woul d have on
wo me n and s ome et hni c gr oups who, on aver-
age, do not attain t hat hei ght and wei ght . The
liquor, beer, and ci garet t e i ndust ri es pr ovi de
ot her exampl es . They di d not ant i ci pat e t hat t hei r
pr oduct s woul d creat e seri ous mor al issues: al co-
hol i sm, dr unk dri vi ng deat hs, l ung cancer, det e-
ri orat i ng heal t h, and of f ensi ve s econdar y smoke.
Finally, wh e n McDonal d' s initially deci ded to use
pol ys t yr ene cont ai ner s for f ood packagi ng it just
di d not adequat el y consi der t he envi r onment al
i mpact t hat woul d be caused. McDonal d' s surel y
does not i nt ent i onal l y creat e a sol i d was t e dis-
posal pr obl em, but one maj or cons equence of its
busi ness is just that. Fort unat el y, t he c o mp a n y
has r e s ponde d to compl ai nt s by r epl aci ng t he
pol ys t yr ene packagi ng wi t h pa pe r product s.
Moral ma na ge me nt is our third et hi cal ap-
pr oach, one t hat shoul d pr ovi de a st ri ki ng con-
trast. I n mor al management , ethical nor ms t hat
adher e t o a hi gh st andar d of right behavi or are
empl oyed. Moral manager s not onl y conf or m to
accept ed and hi gh l evel s of pr of essi onal conduct ,
t hey al so c ommonl y exempl i f y l eader shi p on
ethical issues. Moral manager s want to be profit-
able, but onl y wi t hi n t he confi nes of s ound l egal
and ethical pr ecept s, such as fairness, justice, and
due process. Under this appr oach, t he or i ent at i on
is t owar d bot h t he l et t er and t he spirit of t he law.
Law is s een as mi ni mal et hi cal behavi or and t he
pr ef er ence and goal is to oper at e wel l a bove
what t he l aw mandat es. Moral manager s s eek out
and use s ound et hi cal pr i nci pl es such as justice,
rights, utilitarianism, and t he Gol den Rule to
gui de t hei r deci si ons. Whe n et hi cal di l emmas
arise, mor al manager s as s ume a l eader shi p posi -
t i on for t hei r compani es and industries.
Ther e are nume r ous exampl es of mor al man-
agement . Whe n IBM t ook t he l ead and devel -
ope d its Op e n Door pol i cy t o pr ovi de a mecha-
ni sm t hr ough whi ch e mpl oye e s mi ght pur s ue
t hei r due pr ocess rights, this coul d be cons i der ed
mor al management . Similarly, wh e n IBM initiated
its Four Pri nci pl es of Pri vacy to pr ot ect pr i vacy
rights of empl oyees , this was mor al management .
Whe n McCul l ough Cor por at i on wi t hdr ew f r om
t he Chai n Saw Manufact urers Associ at i on becaus e
t he associ at i on f ought ma nda t or y safet y st andar ds
for t he industry, this was mor al management .
McCul l ough k n e w its pr oduct was pot ent i al l y
danger ous and had us ed chai n br akes on its own
saws for years, even t hough it was not r equi r ed
b y l aw to do so. Anot her e xa mpl e of mor al man-
a ge me nt was wh e n Magui re Thoma s Part ners, a
Los Angel es commer ci al devel oper , he l pe d sol ve
ur ban pr obl ems by savi ng and refurbi shi ng his-
toric sites, put t i ng up st ruct ures t hat mat ched ol d
ones, limiting bui l di ng hei ght s to tess t han t he
l aw al l owed, and usi ng onl y t wo-t hi rds of t he
al l owabl e bui l di ng densi t y so t hat o p e n spaces
coul d be pr ovi ded.
O r i e n t a t i o n T o w a r d S t a k e h o l d e r s
Now t hat we have a basi c under s t andi ng of t he
t hr ee et hi cal t ypes or appr oaches , we will pr o-
The Pyramid of Corporate Sooal Responslbdlty 45
p o s e pr of i l e s o f wh a t t he l i ke l y s t a k e h o l d e r or i -
e n t a t i o n mi g h t b e t o wa r d t he ma j o r s t a k e h o l d e r
g r o u p s us i ng e a c h of t he t hr e e e t hi c a l a p -
p r o a c h e s . Ou r g o a l is t o a c c e n t u a t e t he mo r a l
ma n a g e me n t a p p r o a c h b y c o n t r a s t i n g it wi t h t he
o t h e r t wo t ype s .
Bas i cal l y, t h e r e a r e f i ve ma j o r s t a k e h o l d e r
g r o u p s t hat a r e r e c o g n i z e d as pr i or i t i e s b y mo s t
f i r ms, a c r os s i n d u s t r y l i nes a n d i n s pi t e o f si ze o r
l oc a t i on: o wn e r s ( s h a r e h o l d e r s ) , e mp l o y e e s , cus -
t ome r s , l oc a l c o mmu n i t i e s , a n d t he s oc i e t y- a t -
l ar ge. Al t h o u g h t he g e n e r a l e t hi c a l o b l i g a t i o n t o
e a c h o f t h e s e g r o u p s is e s s e nt i a l l y i de nt i c a l ( pr o-
t ect t he i r r i ght s, t r eat t h e m wi t h r e s p e c t a n d f ai r -
nes s ) , s pe c i f i c b e h a v i o r s a n d o r i e n t a t i o n s ar i s e
b e c a u s e o f t he di f f er i ng n a t u r e o f t he g r o u p s . I n
a n a t t e mp t t o f l es h o u t t he c h a r a c t e r a n d s a l i e nt
f e a t ur e s of t he t h r e e e t hi c a l t y p e s a n d t he i r s t a ke -
h o l d e r or i e nt a t i ons , F i g u r e s 5 a n d 6 s u mma r i z e
t he o r i e n t a t i o n s t h e s e t h r e e t y p e s mi ght a s s u me
wi t h r e s p e c t t o f our of t he ma j o r s t a k e h o l d e r
g r o u p s . Be c a u s e o f s p a c e c ons t r a i nt s a n d t he
g e n e r a l n a t u r e of t he s oc i e t y- a t - l a r ge c a t e gor y, i t
ha s b e e n omi t t e d.
Fi gure 5
Three Moral Types and Ori ent at i on Toward
St akehol der Groups: Owners and Empl oyees
Type of Management
Immoral Management
Amoral Management
Orientation Toward Owner~Shareholder Stakeholders
Sharehol ders are mi ni mal l y t reat ed and gi ven short shrift. Focus is on
maxi mi zi ng posi t i ons of execut i ve gr oups- - - maxi mi zi ng execut i ve com-
pensat i on, perks, benefits. Gol den parachut es are mor e i mpor t ant t han
ret urns to sharehol ders. Managers maxi mi ze t hei r posi t i ons wi t hout share-
hol ders bei ng made aware. Conceal ment from shar ehol der s is t he oper at -
ing pr ocedur e. Self-interest of management gr oup is t he or der of t he day.
No speci al t hought is gi ven to sharehol ders; t hey are t here and must be
mi ni mal l y accommodat ed. Profit focus of t he busi ness is t hei r reward. No
t hought is gi ven to ethical consequences of deci si ons for any st akehol der
group, i ncl udi ng owners. Communi cat i on is l i mi t ed to that r equi r ed by
law.
Moral Management Sharehol ders' i nt erest (short- and l ong-t erm) is a central factor. The best
way to be ethical to shar ehol der s is to treat all st akehol der claimants in a
fair and ethical manner. To prot ect sharehol ders, an ethics commi t t ee of
t he boar d is created. Code of ethics is est abl i shed, pr omul gat ed, and made
a living document to prot ect shar ehol der s' and ot hers' interests.
Type of Management
Immoral Management
Amoral Management
Moral Management
Orientation Toward Employee Stakeholders
Empl oyees are vi ewed as factors of pr oduct i on to be used, expl oi t ed,
mani pul at ed for gai n of i ndi vi dual manager or company. No concer n is
shown for empl oyees ' needs/ r i ght s/ expect at i ons. Short-term focus. Coer-
cive, controlling, alienating.
Empl oyees are t r eat ed as l aw requires. At t empt s to mot i vat e focus on
i ncreasi ng product i vi t y rather t han satisfying empl oyees ' gr owi ng mat uri t y
needs. Empl oyees still seen as factors of pr oduct i on but remunerat i ve
appr oach used. Organi zat i on sees self-interest in treating empl oyees wi t h
mi ni mal respect. Organi zat i on structure, pay incentives, r ewar ds all gear ed
t owar d short- and medi um- t er m productivity.
Empl oyees are a human resource that must be t reat ed wi t h di gni t y and
respect. Goal is to use a l eader shi p style such as consul t at i ve/ part i ci pat i ve
that will result in mut ual conf i dence and trust. Commi t ment is a recurri ng
theme. Empl oyees' rights to due process, privacy, f r eedom of speech, and
safety are maxi mal l y consi der ed in all deci si ons. Management seeks out
fair deal i ngs wi t h empl oyees.
i6 Business Horizons / July-August 1991
By car ef ul l y c ons i de r i ng t he de s c r i be d st ake-
hol de r or i ent at i ons u n d e r e a c h of t he t hr ee et hi -
cal t ypes, a r i cher a ppr e c i a t i on o f t he mor a l ma n -
a g e me n t a p p r o a c h s h o u l d be possi bl e. Ou r goa l
he r e is t o gai n a ful l er u n d e r s t a n d i n g o f wh a t it
me a n s t o e n g a g e i n mor a l ma n a g e me n t a n d wh a t
t hi s i mpl i es f or i nt er act i ng wi t h s t akehol der s . To
be sur e, t her e ar e ot he r s t a ke hol de r g r o u p s t o
wh i c h mor a l ma n a g e me n t s h o u l d be di r ect ed, but
agai n, s pa c e pr e c l ude s t hei r di s cus s i on her e. Thi s
mi ght i ncl ude t hi nki ng o f ma n a g e r s a n d n o n -
ma n a g e r s as di st i nct cat egor i es o f e mp l o y e e s a n d
wo u l d al so e mb r a c e s uc h g r o u p s as suppl i er s,
compet i t or s , s peci al i nt er est gr oups , g o v e r n me n t ,
a n d t he medi a.
T
h o u g h t he c o n c e p t o f c or por a t e soci al
r es pons i bi l i t y ma y f r om t i me t o t i me b e
s u p p l a n t e d b y var i ous ot he r f oc us e s s uc h
as soci al r e s pons i ve ne s s , soci al pe r f or ma nc e ,
publ i c pol i cy, et hi cs, or s t a ke hol de r ma n a g e me n t ,
a n unde r l yi ng c ha l l e nge f or all is t o def i ne t he
ki nds o f r esponsi bi l i t i es ma n a g e me n t a n d busi -
nes s es ha ve t o t he c ons t i t ue nc y g r o u p s wi t h
wh i c h t h e y t r ans act a n d i nt er act mo s t f r equent l y.
The p y r a mi d o f c or por a t e soci al r es pons i bi l i t y
gi ves us a f r a me wo r k f or u n d e r s t a n d i n g t he
e vol vi ng nat ur e o f t he f i r m' s e c onomi c , legal,
et hi cal , a n d phi l a nt hr opi c pe r f or ma nc e . The
i mpl e me nt a t i on o f t hes e r esponsi bi l i t i es ma y va r y
d e p e n d i n g u p o n t he f i r m' s size, ma n a g e me n t ' s
Fi gure 6
Three Moral Types and Ori ent at i on Toward
St akehol der Groups: Cust omers and Local Conl muni t y
Type of 3ganageme, Tt Orientation Toward Customer Stakeholders
Immoral Management Customers are vi ewed as opportunities to be exploited for personal or
organizational gain. Ethical standards in dealings do not prevail; indeed, an
active intent to cheat, deceive, and/ or mislead is present. In all marketing
decisions--advertising, pricing, packaging, di st ri but i on--cust omer is taken
advantage of to the fullest extent.
Amoral Management Management does not think t hrough the ethical consequences of its deci-
sions and actions. It simply makes decisions with profitability within the
letter of the law as a guide. Management is not focused on what is fair
from perspective of customer. Focus is on management ' s rights. No consid-
eration is given to ethical implications of interactions with customers.
Moral Management Customer is vmwed as equal partner in transaction. Customer brings needs/
expectations to the exchange transaction and is treated fairly. Managerial
focus is on giving cust omer fair value, full information, fair guarantee, and
satisfaction. Consumer rights are liberally interpreted and honored.
Type of Management
Immoral Management
Amoral Management
Moral Management
Orientation Toward Zocal Community Stakeholders
Exploits communi t y to fullest extent; pollutes the environment. Plant or
business closings take fullest advantage of community. Actively disregards
communi t y needs. Takes fullest advantage of communi t y resources wi t hout
giving anything in return. Violates zoni ng and other ordinances whenever it
can for its own advantage.
Does not take commumt y or its resources into account in management
decision making. Communi t y factors are assumed to be irrelevant to busi-
ness decisions. Community, like employees, is a factor of production. Legal
considerations are followed, but not hi ng more. Deals minimally with com-
munity, its people, communi t y activity, local government.
Sees vital communi t y as a goal to be actively pursued. Seeks to be a lead-
ing citizen and to motivate others to do likewise. Gets actively involved
and helps institutions that need hel p- - school s, recreational groups, philan-
thropic groups. Leadership position in environment, education, culture/arts,
volunteerism, and general communi t y affairs. Firm engages in strategic
philanthropy. Management sees communi t y goals and company goals as
mutually interdependent.
The Pyramid of Corporate Social Responslblh W 47
phi l osophy, cor por at e strategy, i ndust ry charac-
teristics, t he state of t he economy, and ot her such
mi t i gat i ng condi t i ons, but t he f our c ompone nt
part s pr ovi de ma na ge me nt wi t h a skel et al out l i ne
of t he nat ur e and ki nds of t hei r CSR. In frank,
act i on- or i ent ed t erms, busi ness is cal l ed u p o n to:
be profi t abl e, o b e y t he law, be ethical, and be a
good cor por at e citizen.
The st akehol der ma na ge me nt per s pect i ve
pr ovi des not onl y a l anguage and wa y t o per son-
alize rel at i onshi ps wi t h names and faces, but al so
s ome useful concept ual and analytical concept s
for di agnosi ng, anal yzi ng, and prioritizing an
or gani zat i on' s rel at i onshi ps and strategies. Effec-
t i ve or gani zat i ons will pr ogr ess be yond st ake-
hol der i dent i fi cat i on and quest i on what oppor t u-
nities and t hreat s are pos e d by st akehol ders;
what economi c, legal, ethical, and phi l ant hr opi c
responsi bi l i t i es t hey have; and what strategies,
act i ons or deci si ons shoul d be pur s ued to mos t
effect i vel y addr ess t hese responsibilities. The
st akehol der / r esponsi bi l i t y mat ri x pr ovi des a t em-
pl at e ma na ge me nt mi ght use to organi ze its
anal ysi s and deci si on maki ng.
Thr oughout t he article we have be e n bui l d-
ing t owar d t he not i on of an i mpr oved ethical
organi zat i onal cl i mat e as mani f est ed by mor al
management . Moral ma na ge me nt was def i ned
and descr i bed t hr ough a cont rast wi t h i mmor al
and amor al management . Because t he busi ness
l ands cape is r epl et e wi t h i mmor al and amor al
manager s, mor al manager s ma y s omet i mes be
har d to find. Regardless, t hei r charact eri st i cs have
be e n i dent i fi ed and, mos t i mpor t ant , t hei r per-
spect i ve or or i ent at i on t owar ds t he maj or st ake-
hol der gr oups has b e e n profiled. Thes e st ake-
hol der or i ent at i on profi l es gi ve manager s a con-
cept ual but pract i cal t ouchs t one for sort i ng out
t he di fferent cat egor i es or t ypes of ethical ( or
not -so-et hi cal ) behavi or t hat ma y be f ound in
busi ness and ot her organi zat i ons.
It has of t en be e n sai d t hat l eader shi p by ex-
ampl e is t he mos t effect i ve wa y t o i mpr ove busi -
ness ethics. If t hat is true, mor al ma na ge me nt
pr ovi des a model l eader shi p per spect i ve or ori en-
t at i on t hat manager s ma y wi sh to emul at e. One
great fear is t hat manager s ma y t hi nk t hey are
pr ovi di ng ethical l eader shi p just by rej ect i ng i m-
mor al management . However , amor al manage-
ment , part i cul arl y t he uni nt ent i onal variety, ma y
unconsci ousl y prevai l if manager s are not awar e
of what it is and of its dangers. At best , amor al i t y
r epr esent s ethical neutrality, and this not i on is
not t enabl e in t he soci et y of t he 1990s. The st an-
dar d mus t be set high, and mor al ma na ge me nt
pr ovi des t he best e xe mpl a r of what t hat lofty
st andar d mi ght embr ace. Further, mor al manage-
ment , to be fully appr eci at ed, needs t o be s een
wi t hi n t he cont ext of or gani zat i on- st akehol der
rel at i onshi ps. It is t owar d this si ngul ar goal t hat
our ent i re di scussi on has focused. If t he "good
socieW" is to b e c o me a realization, such a hi gh
expect at i on onl y nat ural l y be c ome s t he aspi r at i on
and pr eoccupat i on of management .
R e f e r e n c e s
R.W. Ackerman and R.A. Bauer, Corporate Social Re-
sponsiveness (Reston, Va.: Reston Publishing Co, 1976).
A B. Carroll, "A Three-Dimensional Conceptual Model
of Corporate Social Performance," Academy of Man-
agementRevieu,, 4, 4 (1979): 497-505.
A.B. Carroll. "In Search of the Moral Manager," Busi-
ness Horizons, March-April 1987, pp. 7-15.
Committee for Economic Development, Social Respon-
sibilities of Business Corporations (New York: CED,
1971).
K. Davis, "Can Business Afford to Ignore its Social
Responsibilities?" California Management Review, 2, 3
(1960): 70-76.
R. Eetls and C. Walton, Conceptual Foundations of
Business (Homewood, II1.: Richard D. Irwin, 1961).
"Good Timing, Charlie," Forbes, November 27, 1989,
pp. 140-144.
W.C. Frederick, "From CSRx to CSR2: The Maturing of
Business and Society Thought," University of Pittsburgh
Working Paper No. 279, 1978.
M. Friedman, "The Social Responsibility of Business Is
to Increase its Profits," New York Times, September 13,
1970, pp. 122-126.
S.P Sethi, "Dimensions of Corporate Social Responsi-
bility," California Management Review, 1 7, 3 (1975):
58-64.
A r c h i e B. C a r r o l l is R o b e r t W. S c h e r e r
Pr of essor of Ma n a g e me n t a n d Cor po-
r at e Publ i c Affairs at t he C o l l e g e o f Busi-
ness Admi ni st r at i on, University of Geor -
gi a, At hens.
48 Business Horizons / July-August 1991