CSR Models

Scholars have proposed various models to explain why and how companies do CSR.

1. Carroll's Pyramid of CSR (Archie Carroll)

The most famous model. It has 4 layers (Bottom to Top):

1. Economic: Be Profitable. (Foundation - Required).
2. Legal: Obey the Law. (Required).
3. Ethical: Do what is right. (Expected).
4. Philanthropic: Be a good corporate citizen. (Desired).

2. Friedman's Model (Shareholder View)

• Milton Friedman (1970): "The social responsibility of business is to increase its profits."
• He argued that managers shouldn't spend shareholders' money on charity. Shareholders should do it themselves.

3. Ackerman's Model (Developmental)

Focuses on the stages of handling a social issue:

1. Awareness: Recognition of the problem.
2. Planning: Formulating a policy.
3. Implementation: Allocating resources.

4. Indian Model (Gandhian Trusteeship)

• Unique to India.
• Wealth belongs to society. Businessmen are just "Trustees" managing it for the common good.
• This influenced the Tata/Birla style of philanthropy.

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