BUSINESS ETHICS AND SOCIAL

RESPONSIBILITY
Models and Frameworks of
Social Responsibility
Module 2
Quarter 4, Week 3-4
Business Ethics and Social Responsibility
Senior High School
Locally-Developed Modules
Quarter 4 Module 2: Models and Framework of Social Responsibility
First Edition, 2021

All rights reserved. No part of this module may be reproduced or transmit-

ted to any form or by any means, electronic or mechanical, including pho-
tocopying, recording, or by any information storage and retrieval system
without written permission from the publisher and authors.
Published by the Schools Division Office (SDO) Dagupan City
OIC, Schools Division Superintendent: Aguedo C. Fernandez
OIC, Asst Schools Division Superintendent: Ma. Criselda G. Ocang

Development Team of the Module

Writer: Paul Gregory B. Estabillo
Editor: Pina T. Cochangco
Language Evaluators: Princess Grace M. Kim
Mildred A. Balanza
Charmesh D. Valdez
Reviewer: Reynante R. Carrera
Renato R. Santillan
Layout Artist: Paul Gregory B. Estabillo
Renan O. Bautista
Management Team: Maria Linda R. Ventenilla
Edilberto R. Abalos
Renata G. Rovillos
Cherry A. Cayabyab

Department of Education-SDO Dagupan City

Office Address: Burgos Street, Poblacion Oeste, Dagupan City
Telefax: (075) 515-6009

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Cortez, Franz Giuseppe F. (2016). Business Ethics and Social Models and Framework of Social Responsibility
Responsibility.Araneta Avenue, Quezon City:Vibal Group Inc.

Padilla, Reynaldo A. (2016). Business Ethics and Social In this module, you will learn the different belief systems
Responsibility. Pasay City:JFS Publishing Services and their influence in business practices.
A Framework for understanding corporate social responsibility
retrieved from https://www.londontfe.com/blog/A-framework-for- This module seeks to achieve the following objectives:
understanding-corporate-social-responsibility/  describe the different models and frameworks of social
responsibility (ABM_ESR12-IVi-l-3.4 3.4) ; and
Corporate Social Responsibility retrieved from https://  formulate a framework of social responsibility that reflects
freeonlinemanagementtraining.wordpress.com/2015/09/07/csr- the practice of sound business (ABM_ESR12-IVi-l-3.5)
corporate-social-responsibility/

In doing this module, please

follow these reminders:
1. Take the pretest before
working or answering the
module.
2. Perform the activities as
suggested.
3. Answer all the exercises.
4. Check your answers
against the Key to
Correction.
Prepared by: 5. Take the Post Test.
PAUL GREGORY B. ESTABILLO

Dagupan City National High School—Senior High School

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Multiple Choice. Choose the letter of the best answer. It’s time to check your answers!
Remember, honesty is important so
1. What is meant by the phrase CSR? that you can effectively assess your
A. Corporate Social Responsibility
learning. Don’t feel pressured, I know
B. Corporate Society Responsibility
C. Company Social Responsibility you did your best! Let’s now have a
D. Company Society Responsibility look at these answers for the Pre-Test
and Posttest
2. What does Milton Friedman believe to be the sole responsibility of
business?
A. the only responsibility of a business is to its shareholders.
B. The managers should act in ways that balance the interest of
society and shareholders .
C. The primary responsibility of organizations have is to their
employees. 10. D
D. The primary responsibility of organizations has is to their stake 9. D
holders. 8. B
7. C
3. For Karl Marx, where do values come from?
A. They are a product of our upbringing from our parents.
6. B
B. They are a product of the economic system where we live.
5. B
C. They are a product of social inequality. 4. B
D. They are the product of what we are taught in school 3. B A 10.
2. A D 9.
4. Who said that the “only one social responsibility of business 1. A A 8.
is to increase profits? A 7.
A. Edward Freeman Multiple Choice A 6.
B. Milton Friedman D 5.
C. Michael Porter PRETEST
D 4.
D. Michael Freeman D 3.
D 2.
C 1.

POST TEST

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 5. Which is the principle of corporate responsibility?
A. Trusteeship principle
B. Principle of stewardship 5. For Karl Marx, where do values come from?
C. Principle of charity A. They are a product of our upbringing and our parents.
D. All of the above B. They are the product of the economic system.
C. They are the product of social inequality.
D. They are a product of what is taught in school.
6. The argument for CSR involves?
A. Recognition of moral obligations by the business. 6. Which of the following best describes social responsibility?
B. Need to balance power with responsibility
A. A corporation’s right is right such as the due process in a
C. Voluntary actions would prevent government regulations.
court law, freedom of privacy
D. all of the above B. Adoption by a business of a strategic focus for fulfilling the
economic , legal, philanthropic responsibilities expected by its
7. CSR that extends beyond legal mandates can help meet social stakeholders.
expectations in the absence of C. All businesses expect those with less than 50 employees.
A. Statutory devices D. All the policies of a company that promotes ethical
B. Social tool business practices.
C. Cost tool and technique
7. Which of the following is not one of the four types of corporate
D. Science tool
social responsibility.
A. Ethical
8. The relationship between standards of CSR & potential legal B. Legal
requirements governing corporate operation lies at the heart of C. Environmental
A. The business community D. Economic
B. Unattainable 8. Developing a code to aid employees in their decision-making is an
C. Formulation example of an activity for which type of social responsibility?
D. The social activity 9. The argument for CSR involves A. Economic
A. Recognition of moral obligations of business B. Ethical
B. Need to balance power with responsibility C. Philanthropic
C. Voluntary Actions would prevent government regulations D. Legal
D. All of the Above.
10. Traditional business is essentially profit- making while social
business is essential for the pursuit of specific goals such as
solving environmental problems.
A. True
B. False

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 MULTIPLE CHOICE
9. For a local beauty shop that is a privately owned business, Choose the letter of the correct answer.
which of the following is not likely to be a stakeholder?
A. Tax communities 1. A ______sets out the purpose and general direction for the
B. Customers organization.
C. Suppliers of hair coloring solutions A. Vision
D. Philippine Stock Exchange B. Purpose statement
C. Mission statement
10. Those groups to whom a company is responsible are collectively D. Profit statement
known as ___.
A. stockholders 2. Which of the following does the term Corporate Social
B. society Responsibility relate to?
A. Environmental practice
C. employees and customers
B. Human rights and employee relations
D. stakeholders C. Ethical conduct
D. All of the above

3.Who are organizational stakeholders ?

A. Employees
B. Government
C. Customers
D. All of the above

4. Which of the following statements about CSR is true?

A. It has a strong impact on corporate reporting practices ,
investment strategies, SCM & public relations.
B. It is about striking a balance between economic
performance , meeting stakeholder’s expectations &
responsibility towards society.
C. It is about recognizing that no organization is an island &
must operate in partnership with the outside world.
D. It is typically directed at employees and shareholders
instead of the outer environment.

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 Activity 2
Directions: Form a group of five (5)members, brainstorm and
create the CSR framework of your future company. This activity will Models and Frameworks of Social Responsibility
be considered a performance task . You will be graded using the
rubrics below. Your output can be drawn by hand or through the
computer. Pass your output to your subject teacher. Be sure to write In 2003, the organization Philippine Business for Social
the names of the members in your output. Progress (PBSP) commissioned Social Weather Stations (SWS), a
survey institute conducted a survey regarding the awareness of
Section Filipinos on the concept of corporate social responsibility (CSR).
The result was 88% of the respondents did not know anything at
all about CSR, 8% had little knowledge and 3% had adequate
Group Members knowledge and 1% had extensive knowledge. At present CSR has
% Grade become more and more popular to the point that it has become a
business fad.
Originality 30 %
Level of Detail 20% Milton Friedman, a liberal economist stated that “ there is
one and only social responsibility of business– to use its resources
Quality of Connection and engage in activities designed to increase its profits so as long
as it stays within the rules of the game, which is to say, engages in
Integration of CSR con- 50% open and free competition, without deception or fraud.”
cepts
From the statement of Friedman, we can identify some of
Total 100 %
the responsibilities of business.

The business has a capability and sustainability that

depends upon its profits. If you are the owner of a business you
must make sure that your policies and decisions would translate
into financial gains. Employees will depend on the firm; they will
lose their job if the business is not viable. Shareholders trust the
company; they will lose investment if the firm is not viable.

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 Every other stakeholder (consumers, suppliers, community, 5. Name of Company: __________________________________________
or government) has something to gain when the firm is stable. Even Conduct of Business:
in a small business establishment, it should gain profit. Otherwise, __________________________________________________________
the business will be closed. Thus, a business has an economic
___________________________________________________________
responsibility to earn profits. The declaration of Friedman about the
___________________________________________________________
responsibility of business also revealed his recognition of another
___________________________________________________________
possible responsibility of business: To play the rules of the game.
CSR Description:
What are the rules of the game? That is to engage in open and free
___________________________________________________________
competition without deception or fraud. The second responsibility
___________________________________________________________
pertains to legal responsibility. Whether an owner or CEO, you
___________________________________________________________
should know all the laws pertinent to business activities. Violations
will lead to problems. ___________________________________________________________

The rules of the game do not only refer to codified laws and
rules, business should have an ethical responsibility. A business 0 5 10 15 20
has three responsibilities economic, legal and ethical Answers Answers Answers Answers
responsibilities. Answers are partial are not are accu- are compre-
are not or incom- comprehen- rate and hensive,
The Stakeholder Model of the Corporation connect- plete. Key sive or com- complete. accurate
ed to the points are pletely stat- Key and com-
Stakeholder—any group or individual who can affect or is affected question. not clear. ed. Key points are plete. Key
by the achievement of an organization’s objective . Question points are stated ideas are
not ade- addressed, and sup- clearly stat-
Friedman defined a stakeholder as an organization in any quately but not well ported. ed, ex-
group or an individual who can affect or is affected by the answered. supported. plained, and
achievement of the organization’s objective. From this definition, the well sup-
following are considered as the stakeholders of the business ported.
organization: shareholders, employees, customers, suppliers,
competitors, government, non-government organizations,
community and the natural environment.

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3. Name of Company: _________________________________________ The stakeholder model shows that business managers
Conduct of Business: cannot afford to have an understanding of their responsibilities.
__________________________________________________________ The managers must consider the claims of other primary and
___________________________________________________________ secondary stakeholders. It is because the business organization
___________________________________________________________ does not only relate with and affect its owners. The business
___________________________________________________________ organization has operational consequences to the community
CSR Description: where it operates, the employees, customers, the environment
___________________________________________________________
and other interest groups. He further explained that the business
___________________________________________________________
world today is very complex and there is a great deal of uncertain-
___________________________________________________________
ty. It consists of interconnected networks of customers, suppliers,
___________________________________________________________
communities, employees and financiers that are vital to the
achievement of the success of a business. A company that
4. Name of Company: __________________________________________
manages for shareholders at the expense of other stakeholders
Conduct of Business:
cannot sustain its performance.
__________________________________________________________
___________________________________________________________ Ackerman Model. The model has emphasized the internal
___________________________________________________________ policy goals and their relation to CSR. The managers get to know
___________________________________________________________ the most common social problem and then express a willingness
CSR Description: to take a particular project which will solve social problems. There
___________________________________________________________ is an intensive study of the problem by hiring experts to solve the
___________________________________________________________ problem. There is an active part of the manager and the evalua-
___________________________________________________________ tion addressing the needs of the company.
___________________________________________________________

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 Activity 1
Some Impacts of Corporate Social Responsibility Efforts Directions: Search at least five (5) companies in the country that
practice social responsibility in conducting their business. Analyze
 Reduces social cost and describe their CSR framework. Take note that you will be
 Enhances the performance of the employees graded using the rubrics found at the end part of Activity 1.

 Pertains as a type of investment. 1. Name of Company: __________________________________________

 Leads to industrial peace Conduct of Business:
__________________________________________________________
 Improves the public image. ___________________________________________________________
 Generates more profit ___________________________________________________________
___________________________________________________________
 Profits moral justification CSR Description:
 Satisfies the stakeholders ___________________________________________________________
___________________________________________________________
 Helps to avoid government regulations and control.
___________________________________________________________
 Enhances health by non-polluting measures. ___________________________________________________________

2. Name of Company: ____________________________________________

Conduct of Business:
__________________________________________________________
___________________________________________________________
___________________________________________________________
___________________________________________________________
CSR Description:
________________________________________________
__ ___________________________________________________________
___________________________________________________________
___________________________________________________________

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 
 Terms Used in Corporate Social Responsibility
We’re almost done! Here’s a
recap of what we have learned  Social Responsibility– a person’s obligation to consider the ef-
today. Review them once again, fects of his decision and actions on the whole social system.
and get ready for the Post Test Businessmen apply social responsibility when they consider the
on the next page! You’re doing needs and interests of others who may be affected by business
great! Keep it up! actions.

 Corporate Social Responsibility– a general belief held by

 Five dimensions of Corporate many that modern business has responsibility to society that ex-
Social Responsibility tends beyond the stockholders or investors in the firm.

1. Environmental dimension  Companies integrate social and environmental concerns in

2. Economic dimension their business operations and in their interaction with the stake-
3. Stakeholder dimension. holders on a voluntary basis.
4. Social dimension
5. Voluntariness dimension  Describes how companies integrate social and environ-
mental and ethical concerns into the business decision-making
process and their interactions with stakeholders on a voluntary
basis.
 The business has a capability and
sustainability that depends upon its profits  It is an approach that an organization takes in balancing its
responsibilities toward different stockholders when making
 Stakeholder—any group or individual who can affect or is legal, ethical and social decisions.
affected by the achievement of an organization’s objective.

 Social Responsibility– a person’s obligation to consider the

effects of his decision and actions on the whole social
system.

 Corporate Social Responsibility– a general belief held by

many that modern business has the responsibility to society
that extends beyond the stockholders or investors in the firm

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Five dimensions of Corporate Social Responsibility

1. Environmental dimension-direct assertion of concern for the

natural environment.
2. Economic dimension– the emphasis on preserving the economic
viability or profitability of a business organization.
3. Stakeholder dimension– the importance of how other
stakeholders such as employees, suppliers and customers are
fairly and justly treated.
4. Social dimension– the business is conscious of its impact to the
communities.
5. Voluntariness dimension– it is going beyond the requirements of
the law and as being motivated by ethics and values.

Criticisms Against CSR First Bank of Nigeria CSR Framework

 The concepts of socially responsible business are built on good

intentions. But some corporate leaders misuse the concept to
produce selfish benefits for their companies and make as much
money as they can, even the poor are exploited.
 Companies can wisely combine being exploitative and being
charitable at the same time. It appears therefore the exploitation
is justified because of the charitable acts.
 It is an extension of the company’s public relations and the
companies are interested in good press than social impact.
 CSR is tantamount to corporate financial irresponsibility.
 Ethics can become a tool for the selfish pursuit of business
profits. CSR is a form of advertisement. It is about money not
morals.
Goodwill CSR Framework

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