Economic Responsibilities of CSR (revised)

A scholar called Carroll divided CSR into four parts: economic responsibilities, legal responsibilities, ethical responsibilities, and philanthropic responsibilities. In this part, I will focus on the economic responsibilities.

figure 1: Carroll's pyramid of CSR

The main goal of this responsibility is to be profitable, which means entrepreneurs should make good and deliberate decisions in order to make profit for the company. Thus give their investors plentiful pleasing profit.

An institution whose objective is to produce goods and services that society wants and to sell them at fair prices—prices that society thinks represent the true value of the goods and services delivered and that provide business with profits adequate to ensues its survival and growth and to reward its investors.

Yes, entrepreneurs’ goal is to maximize sales, minimize costs. In a selfish point of view, not only businessmen but also most of the people in this world care about our own profit. The reason why businessmen establish a company is to make profit for himself, not for the investors, publics, or their own country. Entrepreneurs will do their best to promote growth rate and investors will have their share. However, the outcome may be the same, the motivation is different: in CSR’s point of view, businessmen make profit for investors, but actually, they make profit for themselves.

Another question is that what actually is a good’s “fair price”? One may say that it is the price that is a little higher than costs, which can “represent the true value of the goods and services” and let businessmen earn profit simultaneously. But the price of the goods and services should depend on the invisible hand of the market. We’re now in an era of free market economy, the economic activities should base on the mechanism of supply and demand; that is to say, when the supply is unable to meet the demand, the price will get higher. In this situation, the price may be very high, but the quality of the goods or services didn’t become better, and is very likely to become lower.

In conclusion, although the economic responsibility of CSR is a basic responsibility for companies, the expectation and the standard in the theory are kind of departing for the conception of business management and the economic theory.

Archie B. Caroll&Ann K. Buchholtz (2008). Business, society, and stakeholders: Corporate citizenship: social responsibility, responsiveness, and performance. In Melissa Acuna (Ed.), Business & society: Ethics and stakeholder management, 7th edition (pp.40-49). Mason: South-Western

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