FAR EASTERN UNIVERSITY HIGH SCHOOL
Accountancy, Business and Management
Nicanor Reyes Street, Sampaloc Manila
Lesson 2: Corporate Social Responsibility
Since we discussed the responsibility of entrepreneurs when it comes to third parties,
in this module we will now discuss how a business becomes socially responsible.
Learning Objectives
At the end of this lesson, the students should be able to:
1. Define the meaning of corporate social responsibility.
2. Describe the aspects and models of corporate social responsibility.
3. Explain the different models and frameworks of social responsibility.
4. Implement and promote development phases of a company’s strategies in
environmental management.
What is Corporate Social Responsibility?
Reference: The Giving Machine
Corporate Social Responsibility (CSR) is defined as a concerted initiative to
contribute to sustainable development through efforts that are economically, socially, and
environmentally beneficial to stakeholders. It refers to the efforts made by a company to
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Lesson 1: The Role of Business and Social Economic Development
FAR EASTERN UNIVERSITY HIGH SCHOOL
Accountancy, Business and Management
Nicanor Reyes Street, Sampaloc Manila
improve society and contribute towards sustainable development. Also known as corporate
conscience or corporate citizenship, CSR describes initiatives run by a business to evaluate
and take responsibility for their impact on several issues ranging from human rights to the
environment. (The Giving Machine, n.d.)
Corporate social responsibility is also related to sustainable development. Where
this term is defined as an effort to strike a balance between maintaining the needs of the
present and the ability of future generations to meet their needs through the preservation of
the environment.
Aspects of Corporate Social Responsibility
There are four aspects or obligations that is embodied in the corporate social
responsibility.
• Economic Obligation – it is the primary responsibility of a company to help develop
the economy and achieve a status of development on a par with other countries;
generate employment; and distribute goods and services for public use and
consumption.
• Legal Obligations – Company operations should be within the bounds of law. As
established in the previous module, the company should follow rules and restrictions
dictated by law and comply with legal requirements. In addition, the obligation to pay
taxes and get the necessary permits in the operation of the business. Lastly, it is a
duty to pay its employees promptly, in accordance with the law.
• Ethical Obligations – Companies are expected to be ethical in their dealings with
stakeholders, especially the public. Avoiding emitting toxic waste or causing
pollution during their operations. In other words, protective measures should be
placed to not cause harm or threaten the life of anyone before, during, and after its
operations.
• Philanthropic Obligations – It is an obligation of a company to help the community in
worthwhile projects which are beneficial to the people in the community. This is a
way of giving back to the community where the company operates.
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Lesson 1: The Role of Business and Social Economic Development
FAR EASTERN UNIVERSITY HIGH SCHOOL
Accountancy, Business and Management
Nicanor Reyes Street, Sampaloc Manila
Models of Corporate Social Responsibility (CSR)
Under the Corporate Social Responsibility (CSR), there are three models which show
different aspects of CSR and their relationships.
1. The Pyramid Model – this model emphasizes the levels of expectations of the people
comprising the four social responsibilities starting from the economic to the
philanthropic. In this model, it shows the hierarchy of social responsibility
representing the order of decreasing importance starting from the base line of
Economic Responsibility, legal responsibility, ethical responsibility, and lastly the
philanthropic responsibility.
Reference: LinkedIn
Lesson 1: The Role of Business and Social Economic Development
FAR EASTERN UNIVERSITY HIGH SCHOOL
Accountancy, Business and Management
Nicanor Reyes Street, Sampaloc Manila
2. The Intersecting Circles Model – this model shows the four aspects of social
responsibility, i.e. economic, legal, ethical, and philanthropic. Overlapping with each
other, showing that they are interrelated. Under this model, it allows flexibility
because managers are free to use the company’s resources not solely on one aspect
but undertake endeavors that address several aspects.
Reference: Research Gate
3. The Concentric Circles Model – Similar to the pyramid model where the economic
social responsibility is the core aspect, but it is also like the intersecting circles
model in terms of the interrelationships of the four aspects. However, under this
model economic social responsibility is more pronounced and emphasized. It means
that the company should be profitable for the good of the public. Furthermore, all
economic responsibilities should have all legal, ethical, and philanthropic aspects.
- For example, in achieving profitability, the company should act morally in all
its dealings (ethical). While complying with legal requirements, it should
cooperate with the government in fighting inflation and adopting measures to
prevent pollution (legal). Lastly, in reaping profits the company should have
programs that will improve the social environment (philanthropic).
Lesson 1: The Role of Business and Social Economic Development
FAR EASTERN UNIVERSITY HIGH SCHOOL
Accountancy, Business and Management
Nicanor Reyes Street, Sampaloc Manila
Reference: Project Guru
Principles of Environmental Management
Many companies today advocate concerns for the environment, and this concern
has become louder ever since Covid 19 happened, how we are forced to stay inside our
houses and how it impacted the environment because of the limited number of
transportation vehicles outside. The talk of taking care of the environment becomes so
much louder. These environmental principles are classified according to development
phases such as the following:
1. Light Green – this environmental principles states that a company becomes
successful if it sustains competitive advantage but at the same time complies with
the law.
- Those who advocate light green principles prioritize the protection of the
environment as a personal choice. For these individuals, they believe it is a
responsibility and a part of their lifestyle.
Lesson 1: The Role of Business and Social Economic Development
FAR EASTERN UNIVERSITY HIGH SCHOOL
Accountancy, Business and Management
Nicanor Reyes Street, Sampaloc Manila
2. Market Green – this principle promotes the creation of products and services that
cater to the environmental preferences of consumers. Where many consumers
prefer to buy environmentally friendly goods and services. In addition, refrigerators
and air conditioners with environment-friendly features have been very saleable.
Taking this feature into account before purchasing the product.
3. Stakeholder Green – this principle focuses on the preferences of stakeholders.
Stakeholder green has a darker shade than market green because it focuses on a
bigger group which is the stakeholders. In stakeholder green it includes the
customers, suppliers, community, employees, shareholders, and others.
- Under stakeholder green, stakeholders promote environmental activities
such as requiring suppliers to meet environmental standards in the process
or orienting employees on environmental issues. Which in return, the
community benefits from policies they make or the activities they create on
the proper disposal of wastes and eco-friendly packaging.
4. Dark Green – Not many companies adopt the dark green principles. This propagates
leadership in the industry through a high level of commitment to preserving the
environment.
- Under this principle, this is very idealistic because it is difficult to lead in a very
competitive world by fully prioritizing the environment. Nevertheless,
companies which used the dark green principles have been successful in
reconciling their strategies with the preservation of the environment.
5. Shades of Green – Companies can develop and create their own shades of green
depending on how they interpret the shades to suit their commitment and aspiration
to take care of the environment. They can define each shade in their own ways
depending on how they interpret the corresponding environmental values for each
shade.
Lesson 1: The Role of Business and Social Economic Development
FAR EASTERN UNIVERSITY HIGH SCHOOL
Accountancy, Business and Management
Nicanor Reyes Street, Sampaloc Manila
References:
• The Giving Machine. (n.d.). Corporate social responsibility and environmental, social,
and governance: A simple guide. [Blog post].
https://www.thegivingmachine.co.uk/blog/posts/corporate-social-responsibility-
and-environmental-social-and-governance-a-simple-guide/
Lesson 1: The Role of Business and Social Economic Development
