Critically evaluate Visser’s (2007) criticism of Carroll’s CSR pyramid

Critically evaluate Visser’s (2007) criticism of Carroll’s CSR pyramid

 
 
 
 
 
 
 
 

Summarise Visser’s (2007) criticism of Carroll’s CSR pyramid, critically evaluate his arguments and then present your own conclusions, drawing on insights from relevant literature

 

CORPORATE SOCIAL RESPONSIBILITY 

Kotler and Lee (2005) described CSR as the concept that businesses have a wider responsibility to society beyond merely making profits for themselves. This requires them to use their resources to bring about societal improvement and wellbeing at large especially in areas within their influence. In light of 21st century issues like sweatshops, child labour, Aids, discrimination, or pollution, public criticism of corporations has never been at an all-time high. Most people now turn to corporations for solutions to most of these problems, and not governments. As Jacoby (1973) asserted, the fact that people now turn to big business and not government for criticism is a rather positive reflection of the growth of public confidence in corporate capabilities than loss in confidence.

CARROLL'S CSR PYRAMID

It was Carroll (1979) who came up with an overall definition of CSR that has been most widely used as a framework in academic literature and business discourse, defining it as the discretionary social expectations that society has of organisations at a given point in time which include economic, legal, ethical and philanthropic obligations.

Economic obligations

Milton Friedman once famously asserted that social responsibility of business was simply to make profit. Carroll refuted this, arguing it was simply one of many layers, albeit at the top of the pyramid, of many responsibilities that a business has towards society. Carroll declared profit maximisation is simply a foundation upon which a firm can carry out other obligations (Crane and Matten 2004).

Legal Obligations

When a business is seeking profits, it has to abide by government laws and regulations and play by the “rules of the game”. These laws are the codification of society’s moral views (codified ethics) which formalise business responsibilities as a prerequisite (Crane and Matten 2004:Kotler and Lee 2005).

Ethical Obligations

This necessitates businesses to go beyond both legal and economic responsibilities and seek to do what is right, just and fair (Crane and Matten 2004).

Philanthropic Obligations

At the bottom of the pyramid are business expectations as good citizens to contribute towards the wellbeing of society through philanthropy like donating to charity beyond obligatory duties. Philanthropic responsibilities differ from ethical types based on the fact that they are merely desired by society and not expected in any obligatory moral form, making them less important compared to the other three (Crane and Matten 2004; Kotler and Lee 2005)

Fig 1: Carroll's Four Part CSR Model

Carrols Four Part Model of CSR

 

Limitations of Carroll’s CSR pyramid

Carroll’s model of CSR was the first to recognise the importance of other social responsibilities of corporations beyond profit maximisation. It did this while acknowledging the fact that the economic case is the most important argument upon which all other obligations rest. However, the model does have limitations. The fact that is it is based on American experiences is one. Crane and Matten (2004) also argue the model does not address conflicting obligations and how culture manifests itself. This conclusion came about after the model was applied to European businesses and it was noted that different layers had varying significance in different European countries based on strong but varying historical and religious traditions (See Appendix Table A).

For example, Donaldson (1992) states that the Anglo-Saxon tradition of analytical philosophy is scantily accepted in parts of southern Europe where there is a strong Aristotelian philosophy or Northern Europe where Positivism (ethical doctrine whose form denies the possibility of all ethics-including business ethics-on theoretical grounds) has strong influences. Many of these philosophical differences indicate varying degrees of value importance in Europe, without even considering other places like Africa.

Visser (2006) applied Carroll’s model to the African context and noted that, just like in the European case, different layers of the model had varying significance as shown in fig 2(below).

Fig 2: Visser's Africa Four Part Model of CSR

Visser's Africa Four Part Model of CSR

 

Economic obligations

In Africa, economic obligations for business still takes priority but unlike American corporations where profits and shareholders take precedence over everything else, corporations in Africa are required to take into account profits and other stakeholders, just like the European case. Visser (2006) uses the example of the Anglo America 2003 CSR charter that places profit maximisation as an extension economic contribution such as adding production value, staff development, transfer of technology, creating jobs and establishing local business linkages or also termed as “economic multipliers” in the African economies

Philanthropic obligations

American corporations tend to be philanthropic out of discretion while European philanthropy tends to come more from legal obligations. African philanthropy in retrospect follows more the American model than the European one for a number of reasons; one being African governments are dependent on fewer rich corporations rendering any legal or ethical enforcement improbable, given the consequences of withdrawal as happened with Anglo America in Zambia. The conditions in which many African corporations operate is also often one of extreme poverty. It would be disgraceful if companies only sought to enrich themselves and their owners while surrounding communities and workers lived in abject poverty or slums. After all, this is how Philanthropy and other moral movements sprung up in Victorian England spearheaded by entrepreneurs like Rowntree (Crane and Matten 2004; Visser 2006).

A critical point that Visser (2006) emphasizes as a criticism of Carroll’s model is that philanthropy is not only last on Carroll’s model, the model lacks descriptive clarity. A case in point uses the example of Anglo American which spends a vast amount of money on philanthropic activities in South Africa, spending at least US $10million on educational grants and a comprehensive HIV programme for employees, giving them access to free anti-retroviral drugs so that 94% come back to work. It also funds other Aids charities in the country. But is this an economic, ethical or moral case?

In 2000, the world’s biggest pharmaceutical corporations established the AAI foundation in conjunction with five UN institutes to try and increase access to medicines in Africa for those who could not afford antiretroviral drugs[1]. Since then, pharmaceutical corporations have contributed almost US$2billion in efforts to make cheaper healthcare drugs available to the poorest populations in Africa, a financial amount that exceeds that contributed by Developed governments towards this problem. This again highlights Vissers argument of why philanthropy must be prioritised in places like Africa where the economic argument might be weak for corporations. Between 1974 and 1999, more than 1,400 drugs were developed by pharmaceutical corporations in the world yet only one percent of those drugs were targeted to treat tropical diseases like malaria, or Tuberculosis despite such diseases accounting for more than ten percent of annual global mortality. This shows that the African market is not regarded as a lucrative market for pharmaceutical corporations hence Vissers argument for philanthropy making sense in Africa (Visser 2006; UN 2011).

Legal obligations

The case for prioritizing legal obligations is another limitation of Carrols model (Visser 2006; Crane and Matten 2004; Crane and Matten 2001) especially in the African context, where legal and judicial structures are either underdeveloped or neither mature nor independent enough from political pressure to challenge big corporations. The weakness of the judicial system as police force monitoring corporate responsibility came to light in a survey of 1,026 public and private sector organisations in South Africa. The study by KPMG (2002) cited in Visser (2006) found that 67% of respondents cited fraud as a big problem while a further 66% noted a lack of satisfactory penalties and law enforcement, coupled with an inefficient  justice system, as the reasons for high fraud. This renders Carroll’s argument for legal obligations as second priority limited. This is not an argument against a corporation’s commitment to legal compliance, but rather that an emphasis should be on economic and philanthropic priorities.

Ethical obligations 

In a continent where only 2 countries are ranked among the top 50 least corrupt countries in the world from a total of 145, ethical obligations will hardly feature high on the agenda of either corporations or government. The biggest corporations do try to have an ethical code of conduct but the business landscape overall is dominated by corruption which undermines calls for ethical action (Visser 2006).

To cap this chapter, one can see that Vissers (2006) criticism of Carroll’s model is two-tonged. Firstly, it lacks conceptual clarity, illustrated by the fact it integrates competing themes such as corporate citizenship, business ethics, and stakeholder management. By mixing them, it seems like he is trying to establish a one fits all relationship between business and society in a way that lacks clarity and doesn’t take into account newer problems like the environment.

Secondly, Visser (2006) asserts that Carroll’s model lacks descriptive clarity as illustrated before with the example of how American culture of philanthropy differs from the European. It also does not solve the issue of conflicting responsibilities such as, how does a firm deal with HIV related costs and profitability? Would this issue be of access to medicines in Africa or one of economic CSR (such as making cheaper generic versions of antiretroviral), or would it be ethical or philanthropic?

 

Implication and suggestions

First, Vissers own model which emphasizes philanthropy as the second highest priority of CSR in Africa is hardly perfect itself. He especially puts ethical obligations as last on his pyramid meaning they should not be important drivers of CSR in Africa. But how would he explain examples such as ones below showing how the biggest corporate CSR changes came about from ethical pressures;

In Burma for example, an organised effort of multiple consumer boycotts by the Free Burma Coalition forced many multinational corporations like Carlsberg and Phillips to pull out of the country showing the power of ethical consumers consumer to bring about out genuine ethical change and social responsibility in businesses (Crane and Marten 2004). This was further demonstrated with other multinational firms such as Nike which was criticized for a longtime by ethical consumers in the west over their sweatshops and child labour in Asia. The result was that it had to adopt ethical codes of conduct with its suppliers, causing many other companies to follow suit. 

This all shows that both Carroll and Visser seemed to have underestimated the power of the modern consumer to bring about out genuine ethical change and social responsibility in businesses more than any economic, legal or philanthropic case would. Crane and Matten (2004) called it enlightened consumerism or enlightened consumers who “vote” with their wallets as a way to support or punish socially irresponsible businesses. Modern ethical trends like fair trade owe their emergency more to ethical consumers or consumer desire for ethical businesses and products than for corporate philanthropy or political will.

In a way, when Visser (2006) concludes that his argument isn’t for reduced priority in legal and ethical responsibilities, rather an acknowledgement of what’s being done in practise, he retrospectively drives home the point that ethical action must take priority. The implications for Vissers conclusion on organisations are as diverse as the methods for achieving improved ethical responsibility and good governance. One of the implications is that businesses must become more focussed on practices that are ethical as the examples of Calsberg and Phillips in Burma, or Nike demonstrate.

Lastly, the role of governance is important in terms of sanctions and non-compliance, in what Zadek (2007) terms as civil governance. Here, government’s role is to make rules that organisations must abide with, and ensure that corporations are accountable. What this means is all stakeholders including governments and business must all be pulling together in the same direction to bring about CSR that benefits everyone and has a lasting impact on the economy.

CONCLUSION

In conclusion, Vissers criticism of Carroll’s CSR pyramid is justified to an extent as it highlights many flaws such as conflict in obligations, the fact that it doesn’t account for difference in culture as it was based on American experience. But Vissers pyramid which prioritises philanthropy as second is neither any better, because past cases have shown ethical pressure from consumers can force firms to adopt responsible business practices. Finally as shown in the case of Merck, the implications on business can both be improved ethical practices that are economically profitable. The issue of governance is highlighted using the Uganda case study and why corruption must be dealt with first.

 

 


[1] The Accelerated Aids Initiative (AAI) represented an effort by Merck, Abbott, Boehringer, Bristol Myers, and GlaxoSmithKline with UNAIDS, WHO, UNICEF, UN Population Fund and World Bank.

Get A Price