Carroll's CSR pyramid (Archie Carroll, 1991) splits corporate social responsibility into four layers. From the base: economic (be profitable) and legal (obey the law), which society requires; ethical (do what is right), which society expects; and philanthropic (give back), which society desires. A business should meet all four at once.
The four responsibilities
| Level | What it means | Society | Example |
|---|---|---|---|
| Economic | Make a profit, provide goods people want, pay staff and suppliers | Requires | A retailer stays solvent and keeps 10,000 people in work |
| Legal | Obey the law and regulation: employment, health and safety, tax, competition | Requires | Paying the National Living Wage and filing accurate accounts |
| Ethical | Do what is fair and right even where the law is silent | Expects | Paying suppliers on time; not exploiting legal loopholes |
| Philanthropic | Give back through donations, volunteering and community projects | Desires | Staff volunteering days; funding local schools |
Carroll stressed that the layers are met together, not one after another. In his 2016 review he also said the ethical layer runs through all the others.
Social responsiveness strategies (RDAP)
Chapter 7 of the book also covers how a company responds to social pressure. Carroll's responsiveness scale runs from doing least to doing most:
| Strategy | Stance | Example |
|---|---|---|
| Reaction | Denies any responsibility | A firm blames customers when its product causes harm |
| Defence | Admits responsibility but does the minimum, often fighting it | Lobbies against new safety rules and complies only when forced |
| Accommodation | Accepts responsibility and does what is demanded | Recalls a faulty product when regulators ask |
| Proaction | Goes beyond what is expected, sets the standard | Recalls before being asked and publishes what went wrong |
Developing a CSR strategy
- Board commitment: the board makes a firm, public commitment.
- Set objectives: define the social and environmental outcomes wanted.
- Link to the business: align CSR with core competences, so it supports strategy rather than sitting apart from it.
- Embed it: build it into culture, governance and decision-making, then report on it (see integrated reporting).
Carroll's pyramid in ACCA SBL
CSR sits in governance and stakeholders (syllabus area B). Use the pyramid to judge whether a company in the case meets each level, and the RDAP scale to assess how it handled a social issue. For example, Historic Places (March 2025 pre-seen) must meet legal duties on caring for historic buildings, but the scenario also raises ethical and philanthropic questions about access and community benefit. Link your answer to stakeholder theory and Mendelow's matrix.
Advantages
- Simple and memorable
- Shows profit and responsibility are compatible
- Separates what is required from what is optional
Limitations
- Based on US business; priorities differ in other cultures
- Does not explain how to resolve conflicts between levels
- Philanthropy at the top can suggest it is least important
- Gives no measures
FAQs
What are the four levels of Carroll's CSR pyramid?
From the bottom: economic (be profitable), legal (obey the law), ethical (do what is right and fair) and philanthropic (be a good corporate citizen). Economic and legal duties are required, ethical duties are expected and philanthropy is desired.
Who created the CSR pyramid?
Archie B. Carroll, a US management professor. He first set out the four responsibilities in 1979 and drew them as a pyramid in a 1991 Business Horizons article. He revisited the model in 2016.
Do companies have to complete each level in order?
No. Carroll said the pyramid is a whole: a business should meet all four responsibilities at the same time. The pyramid shape shows that economic and legal duties are the foundation, not a sequence.
What is CSR in simple terms?
Corporate social responsibility means a business taking responsibility for its effects on people, society and the environment, not just its profits for shareholders.
What are Carroll's social responsiveness strategies?
Reaction (deny responsibility), defence (admit responsibility but fight it), accommodation (accept responsibility and do what is demanded) and proaction (go beyond what is expected). Students often remember them as RDAP.
Why is CSR controversial?
Some, notably Milton Friedman, argue a company's only social duty is to make profit within the law, and that spending shareholders' money on social causes is not managers' job. Others see it as essential to long-term value and licence to operate.