Four Levels of Social Responsibility

by Steven Miller; Updated September 26, 2017
Corporate social responsibility plays an important part in the daily affairs of corporations.

Corporations are owned by shareholders and operated by managers, and they are considered economic entities that have the ability to impact millions of lives and the environment around the globe. Possessing and using this kind of power is very significant, and it forms the basis of corporate social responsibility or CSR. Corporations not only have a responsibility to earn a fair return for their investors, they are also accountable to various organizations, the general public and legal institutions for the operation and management of their businesses. There are four primary areas of CSR, and they include economic, legal, ethical and philanthropic ideas.

Economic Responsibility

Economic responsibility is the first level of CSR, and it is defined as a corporation’s duty to produce goods and services that are needed and/or desired by consumers. Added to this definition is a corporation’s charge to sell goods and services at a reasonable price. Making a profit is also central to the economic charge that has been given to a corporation.

Legal Responsibility

Laws exist within the marketplace, and they govern how corporations are to conduct their business affairs. Competition with other businesses, regulation of taxes and employment laws are but a few areas of legal responsibility where corporations are expected to adhere to the laws. These laws and standards are established nationally and locally. Corporations are also expected to operate their businesses in a fair manner and to conduct sound practices.

Ethical Responsibility

When a corporation operates within society it must not only obey the law, but it also must employ ethical standards for its conduct. Ethical responsibility occupies the third level of CSR, and it deals with justice, fairness and practices that corporations are expected to demonstrate within the marketplace. Sometimes corporations can engage in practices and conduct that might not be illegal, but they can call into question the ethical and moral character of the organization. Ethical responsibility also encourages corporations to run their organizations according to the ethics and norms of the society in which they conduct their business affairs.

Philanthropic Responsibility

Corporations are not just economic entities -- they’re also considered functioning members of a society. Philanthropic responsibilities are expected to be carried out by corporations. Donating money to worthy causes, giving technical resources for free to communities and helping people who have been affected by a natural disaster are but a few of the philanthropic responsibilities that are demanded by the public for corporations.

About the Author

Steven Miller earned his associate degree in the field of education and is currently continuing his education at Ohio Dominican University. A freelance writer since 2010, Miller enjoys gaining valuable experience and growing as a writer.

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