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Corporate Social Responsibility (CSR) Models

Corporate Social Responsibility (CSR) Models

The Concentric Circle CSR Model

The Concentric Circle CSR Model views corporate social responsibility as layers of responsibilities expanding outward from a core of economic responsibility. Unlike Carroll’s Pyramid, which ranks CSR duties in a strict hierarchy, this model emphasizes that all responsibilities are interconnected and should be integrated into a company’s core business strategy.

Key Elements of the Concentric Circle Model

  • Core (Economic Responsibility) – The foundation of business success and financial stability.
  • Middle Layer (Legal & Ethical Responsibilities) – Following laws and ethical business practices.
  • Outer Layer (Social & Environmental Responsibilities) – Broader commitments to society, sustainability, and philanthropy.

Examples

Nestlé (Food & Beverage)

  • Core (Economic Responsibility): Ensures profitability through its global food and beverage brands.
  • Middle Layer (Legal & Ethical): Complies with food safety laws and fair trade sourcing policies.
  • Outer Layer (Social & Environmental): Invests in sustainable agriculture, water conservation, and community nutrition programs.

Toyota (Automobile)

  • Core (Economic Responsibility): Generates revenue through vehicle manufacturing and sales.
  • Middle Layer (Legal & Ethical): Adheres to environmental regulations and safety standards.
  • Outer Layer (Social & Environmental): Invests in hybrid and electric vehicles, carbon reduction programs, and employee well-being initiatives.

The Triple Bottom Line (TBL) CSR Model

Developed by John Elkington, the Triple Bottom Line (TBL) Model evaluates corporate success based on three key pillars instead of just financial performance.

Key Pillars of the TBL Model

  • People (Social Responsibility) – How a company treats its employees, customers, and the community.
  • Planet (Environmental Responsibility) – A company’s commitment to sustainability, reducing carbon footprints, and ethical resource use.
  • Profit (Economic Responsibility) – Financial performance and sustainable economic growth.

Examples

Starbucks (Coffee & Beverages)

  • People: Supports ethical sourcing and community development programs.
  • Planet: Uses sustainable farming and reduces plastic waste.
  • Profit: Maintains profitability while prioritizing sustainability.
  • CSR Initiative: Offers Fair Trade Certified Coffee and plans to reduce carbon emissions by 50% by 2030.

IKEA (Furniture & Home Goods)

  • People: Supports fair trade, diversity, and safe working conditions.
  • Planet: Uses sustainable materials, renewable energy, and recyclable products.
  • Profit: Remains financially strong while reducing its carbon footprint.

The Stakeholder CSR Model

Developed by Edward Freeman, the Stakeholder CSR Model emphasizes that businesses should consider the interests of all stakeholders, not just shareholders.

Types of Stakeholders

  • Primary stakeholders: Directly affected groups (employees, customers, suppliers, investors).
  • Secondary stakeholders: Indirectly affected groups (communities, governments, environmental groups).

Examples

Johnson & Johnson (Healthcare & Pharmaceuticals)

  • Employees: Provides strong healthcare benefits and workplace safety.
  • Customers: Develops safe and high-quality medical products.
  • Suppliers: Enforces fair trade and ethical sourcing.
  • Community: Supports global health initiatives and sustainability.
  • CSR Initiative: Launched the HEARTLINE Study to improve heart health research while ensuring access to life-saving medications.

Importance of CSR Frameworks

  1. Guiding Ethical Decision-Making – CSR frameworks help businesses establish clear ethical principles and ensure compliance with legal and social expectations.
  2. Building Corporate Reputation & Brand Loyalty – Consumers prefer companies that act ethically and contribute to society, which builds trust and customer loyalty.
  3. Ensuring Long-Term Business Sustainability – Encourages companies to think beyond short-term profits and focus on long-term growth while minimizing risks.
  4. Enhancing Employee Engagement & Retention – Companies with strong social and environmental commitments improve workplace morale and attract top talent.
  5. Compliance with Regulations & Risk Management – Helps companies stay legally compliant with government and industry standards, reducing risks of lawsuits or reputational damage.

Conclusion

Social responsibility is essential for ethical and sustainable business practices. Companies adopting CSR models and frameworks benefit society while enhancing their reputation and profitability.

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