INTI INTERNATIONAL UNIVERSITY

MASTER OF BUSINESS ADMINISTRATION (MBA)

GROUP ASSIGNMENT

BUSINESS ETHICS
Module Name AND LAW Module Code MGT6211
OCT 2023

Module Leader Prof. Dr. Tan Seng Teck Individual Assignment

Students Names Tan Peng Yuan Student ID I23024744

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acknowledged. I understand I will receive a mark of 0% for this
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 INTI International University & Colleges

Faculty of Business, Communications, and Law

Master of Business Administration

MGT6211 BUSINESS ETHICS AND LAW

Reimagining Corporate Social Responsibility: Beyond Trustee Models to

Address Urgent Social Woes

Module Lecturer
Professor Dr. Tan Seng Teck

By

I23024744 – TAN PENG YUAN

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 Abbreviation

CSR Corporate Social Responsibility

BAT British American Tobacco company

NGO Non-Governmental Organization

R&D Research and Development

RI Responsible innovation

CSV Corporate Social Value

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 Contents
Abbreviation ............................................................................................................................... ii
Introduction ................................................................................................................................ 1
A Call for Progressive Approaches to Confront Urgent Social Challenges ............................... 1
A. Unveiling the Hierarchical Dynamics of Carroll's Four Components Pyramid............ 2
B. Unpacking Philanthropy in Corporate Social Responsibility ...................................... 3
C. Limits of Carroll’s Pyramid “Possibility of Application” ........................................... 3
Critiquing Michael Porter's Model: A Call for Progressive Approaches to Confront Urgent
Social Challenge ........................................................................................................................ 5
A. Neglect of Tensions between Social and Economic Goals .......................................... 5
B. Eonomic-centric Focus ................................................................................................ 5
C. Single Bottom Line Focus ........................................................................................... 6
A Call for Recommendations and suggestions for Porter’s CSV Model ................................... 6
A. Applied Triple Bottom Line. ........................................................................................ 6
B. Include Stakeholder Engagement ................................................................................ 7
Conclusion .................................................................................................................................. 8
References .................................................................................................................................. 9

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 Introduction

The concept of Corporate Social Responsibility (CSR) has gained significant prominence over
the course of many decades, emphasising the notion that firms should extend their efforts
beyond mere profit generation and actively engage in activities that contribute to the overall
well-being of society. Nevertheless, in the face of an age characterised by urgent societal
concerns, the efficacy of conventional CSR frameworks is being subjected to scrutiny. This
article aims to conduct a thorough analysis of the limitations inherent in existing CSR
frameworks. It asserts that firms, rather than acting as custodians of societal resolutions, often
play a role in exacerbating the exact issues they claim to be tackling. The pressing nature of
current societal issues, which include environmental deterioration and increasing disparities in
wealth, necessitates a reassessment of the function and effectiveness of CSR. Critics contend
that the existing CSR methods are insufficient, often resulting in superficial interactions that
fail to achieve substantial and significant outcomes. Within the given setting, the article aims to
analyse the deficiencies present in conventional CSR frameworks. It intends to shed light on
several issues such as tokenism, greenwashing, and a dearth of accountability. Through this
approach, the objective is to expose the underlying structural obstacles that hinder the
transformational capacity of CSR in effectively tackling the complex web of societal problems.

Critiquing Carrol's CSR Model: A Call for Progressive Approaches to Confront

Urgent Social Challenges

CSR has emerged as a fundamental idea in discussions pertaining to the involvement of

corporations in tackling social issues. The CSR model developed by Donaldson and Preston, as
conceptualised by Archie B. Carroll, delineates four distinct duties that firms should uphold:
economic, legal, ethical, and philanthropic(Carroll, 1991). Nevertheless, given the increasing
urgency of current social challenges, it is crucial to do a thorough analysis to determine the
continued efficacy of Carrol's CSR model. This article argues that Carrol's framework is
insufficient in addressing the urgent social concerns of our day and examines the need for more
innovative methods capable of navigating the intricacies of the contemporary socio-economic
terrain.

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 A. Unveiling the Hierarchical Dynamics of Carroll's Four Components Pyramid

While Carroll's four-part model has significant merit, the use of a pyramid structure by
Carroll to represent his CSR domains could be perplexing or unsuitable in some contexts. The
pyramid framework, according to some perspectives, implies a hierarchical structure of CSR
areas. It may be inferred that the philanthropic obligations domain, situated at the apex of the
pyramid, is seen as the most significant or esteemed domain, which all organisations should
aspire to achieve, whilst the economic domain, positioned at the foundation of the pyramid, is
regarded as the least valued domain within the realm of corporate social responsibility.
Reidenbach and Robin employ a pyramid as a visual representation of their conceptual
framework for corporate moral development (Reidenbach and Robin, 1991). They propose that
the apex of the pyramid symbolises the pinnacle or most sophisticated stage of moral
development, denoting the presence of an "ethical" corporation. Conversely, the foundation of
the pyramid signifies the lowest or least developed stage, representing a "amoral" corporation.
The viewpoint of the pyramid's rankings of CSR priorities, as intended by Carroll, differs from
the statement. Carroll asserts that the economic and legal domains have primary significance,
whereas charitable duties are seen comparatively less essential than the other three domains.
Nevertheless, the pyramid structure may potentially result in a misinterpretation of the
hierarchical importance assigned to the four categories of CSR.

Furthermore, it is important to note that the pyramid structure falls short in adequately
representing the interconnectedness of the many sectors of CSR, a limitation that has been
acknowledged by the author. The concept of mutuality is a crucial aspect of CSR (Clarkson,
1991). It is of utmost significance that any suggested CSR model include and effectively
represents this essential element. Carroll's use of dotted lines as a means of demarcating the
realms fails to comprehensively represent the non-mutually exclusive characteristics of these
domains. Furthermore, it neglects to indicate two crucial areas of tension that exist among them:
the tension between the economic and ethical domains, as well as the tension between the
economic and philanthropic domains.

One such instance is to the economic accountability of non-profit organisations

operating inside the public sector. Carroll's CSR model is specifically tailored for use inside
for-profit organisations, rather than including all types of organisations, including both for-
profit and not-for-profit entities. The absence of a clear definition on the economic
responsibility of non-profit public sector entities may be attributed to the complexity or
distinction associated with this matter. The absence of distinct traits regarding the social
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obligations of organisations in nations that embrace the socialist economic system might be
attributed to this peculiarity. The concept of economic responsibility proposed by Carroll was
found to be lacking in comprehensiveness. Carroll's conceptualization of corporate economic
responsibility, characterised by a focus on profit maximisation, primarily aligns with the
expectations of shareholders, rather than with the broader societal aspirations. The researcher
provides a definition of corporate economic responsibility based on societal expectations as
follows: The company's efforts serve to enhance the overall economic stability and growth of
the state.

B. Unpacking Philanthropy in Corporate Social Responsibility

In addition to the inherent misunderstandings around the pyramid, it may be argued that
Carroll's categorization of "philanthropic/discretionary" is potentially misleading and
unnecessary. The categorization of certain acts as "responsibilities" may be deemed
inappropriate or misleading due to their voluntary or discretionary nature. In this context,
philanthropy might be seen as a voluntary inclination rather than a mandatory business
requirement or societal duty.

Utilitarianism, as an ethical framework, has the potential to provide theoretical

legitimacy for several humanitarian actions. Shaw and Post posit that rule utilitarianism
advocates for the practise of corporate philanthropy to adhere to a "rule" that maximises societal
welfare (Shaw and Post, 1993). Philanthropic endeavours may be driven by moral
considerations. One possible interpretation of Kant's categorical imperative is to see human
beings as goals in themselves rather than mere means.

The engagement of corporations in community involvement or charitable endeavours

has the potential to enhance sales, improve public perception, and foster employee satisfaction,
so contributing to the overall financial stability of the organisation. Corporations engage in
philanthropic activities mostly due to their economic obligations rather than being driven by a
charitable mandate. Based on Carroll's criteria, the act of giving to charitable organisations may
be classified as falling under the ethical realm rather than the philanthropic one.

C. Limits of Carroll’s Pyramid ″ Possibility of Application″

The construction of Carroll's pyramid took place in the United States, a factor that
maybe influenced the criticism it received. The use of this technology is not entirely feasible in
economically disadvantaged countries. Visser used Carroll's CSR model as a framework to

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examine the implementation of CSR practises in the African context(Visser, 2005). The
researcher made a significant contribution by identifying a pyramid-like structure consisting of
four distinct levels: economic, altruistic, legal, and ethical. Additionally, the author observed
that the pyramid model has been used in surveys conducted in different states, with differing
outcomes in terms of its significance. According to Carroll's four-part model, it is proposed that
CSR objectives in Africa can differ from the conventional American framework. There is a
prevailing argument that Carroll's CSR pyramid may not be the most efficacious framework for
grasping CSR, especially in the context of Africa.

Irrespective of the natural interplay among customer service representatives, a salient

concern arises over some duties that exhibit attributes of multiple responsibilities. Consequently,
they possess the capacity to fulfil the criteria of several social responsibilities. An illustration
of a company's dedication to environmental protection regulations may be seen as a
manifestation of its devotion to both environmental and legal obligations. The adherence of
corporations to their environmental obligations may be seen as an ethical imperative,
independent of legal enforcement, that demonstrates a proactive response to societal
expectations. In the case of non-compliance with consumer demands, the government
implements legislation to enforce firms' adherence. In this particular instance, does the
company's commitment fall under the purview of legal duty or environmental responsibility?
In the context of environmentally friendly industrialization, the classification of a company's
commitment may be attributed to either economic responsibility or environmental
responsibility. The use of environmentally sustainable practises within the industrial sector
serves to safeguard the natural environment while simultaneously optimising financial gains,
particularly in industrialised nations. Furthermore, one limitation of Carroll's model is the
insufficient discussion and incorporation of criteria for evaluating corporate acts or motivations
within each area, particularly the legal and ethical domains(Schwartz and Carroll, 2003).
Carroll's analysis lacks substantial exploration of the many ways in which businesses might
operate in several domains. However, he does briefly provide an example whereby a toy
manufacturer's production of safe toys would align with its economic, legal, and ethical
obligations concurrently. The limited scope of the debate hinders the establishment of a
comprehensive theoretical framework required for the effective application of the model in
specific empirical investigations and educational contexts.

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 A Call for Recommendations and suggestions for Carroll’s CSR Model

A. Defining the domains of Carroll’s CSR and Explaining their Meanings Accurately
The concept incorporates four fundamental obligations, namely economic, legal, ethical,
and philanthropic, however not explicitly articulated. The primary imperative is economic
responsibility, which is bolstered by supplementary obligations. Corporate economic
responsibility necessitates a commitment to supplementary obligations beyond the pursuit of
profit maximisation. The company's commitment to social responsibility is expected to enhance
its reputation and competitive advantage within its operational context.

Companies that exhibit outstanding social responsibility have the potential to contribute
towards the attainment of sustainable development goals that are universally pursued by society.
The use of operational efficiency strategies has the potential to assist organisations in attaining
their goals of sustainable economic development. Carroll's CSR framework failed to include
the concept of environmental responsibility(Carroll, 1991). The concept of environmental
responsibility is closely associated with the principles of sustainable development, since it
entails the safeguarding of the environment and its inherent natural elements. Companies have
the potential to advance the cause of social justice and sustainable development by upholding
their legal and ethical responsibilities. The realisation of all sustainable development goals may
be achieved via the fulfilment of the four essential obligations. Enhancing and revising CSR
legislation might potentially contribute to the attainment of sustainable development goals. The
four corporate social responsibility requirements remain constant; however, the specific content
of these obligations may undergo modifications in response to changing regulatory frameworks.

B. Implement Exact Description of the Relationship among CSRs

Moreover, Carroll's methodology may tend to oversimplify the intricate nature of CSR.
Critics within the business community contend that the Pyramid of CSR exhibits a level of
generality that fails to consider the distinctive conditions and obstacles encountered by diverse
organisations operating within various sectors and countries. Nevertheless, proponents of the
environmental perspective criticise the model for prioritising economic considerations at the
expense of social and environmental factors. ExxonMobil, a major oil and gas firm, serves as
a tangible illustration that encompasses the dual perspectives of critique associated with
Carroll's CSR concept. From a commercial standpoint, opponents contend that the CSR model's
broad and generalised character fails to consider the intricate dynamics of the oil and gas
industry. The sector is obligated to adhere to rigorous legal and environmental requirements,
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necessitating that enterprises prioritise their legal and economic duties in order to achieve
profitability and maintain compliance. However, ExxonMobil has faced criticism from
environmental groups who argue that the company places more emphasis on commercial
considerations rather than social and environmental factors. The corporation has encountered
notable environmental challenges, including as the occurrence of the Exxon Valdez oil disaster
in 1989 and apprehensions over climate change. Critics contend that the occurrences serve as
evidence of an inadequate prioritisation of environmental and social obligations, since the
corporation has faced allegations of minimising the ecological consequences of its activities.
The instance of ExxonMobil serves as an exemplification of the inherent conflicts that might
emerge when implementing Carroll's CSR framework within sectors characterised by
substantial environmental and regulatory complexities. This case study exemplifies the dual
challenges faced by a corporation, namely the critique of its failure to consider the unique
conditions of the sector, and the accusation of prioritising corporate interests above
environmental and social obligations. From my perspective, the Carroll's Corporate Social
obligation model might be enhanced by offering more explicit instructions on how to effectively
prioritise and harmonise the many tiers of obligation. In light of the potential conflicts among
economic, legal, ethical, and charitable objectives, it may be advisable to incentivize firms to
prioritise certain obligations in certain situations. Furthermore, it is advisable to promote the
adoption of this model by companies, taking into account their unique circumstances. It is
important to recognise that the allocation of tasks may differ depending on the business, sector,
and cultural settings.

Critiquing Michael Porter’s Model: A Call for Progressive Approaches to Confront

Urgent Social Challenges.

Porter introduced the concept of shared value, highlighting the symbiotic relationship
between corporations and society, and the need for businesses to generate mutually beneficial
outcomes via their strategic choices(Porter and Kramer, 2006). Porter stated that CSR had to
extend beyond charity endeavours, since they lack the potential to provide a mutually beneficial
outcome. The strategic integration of CSR into the company's value chain is essential for
fostering internal and external linkages called corporate social value (CSV).

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 A. Neglect of Tensions between Social and Economic Goals

Beyond the unacknowledged overlaps with other established streams of literature, the
CSV concept also suffers from a failure to deal adequately with tradeoffs between economic
and social value creation, and with any negative impacts on stakeholders. While seeking win-
win opportunities is clearly important, this does not provide guidance for the many situations
where social and economic outcomes will not be aligned for all stakeholders.

Many corporate decisions related to social and environmental problems, however

creative the decision-maker may be, do not present themselves as potential win-wins, but rather
will manifest themselves in terms of dilemmas. Rowley and Moldoveanu have argued that the
mere idea of negotiation over an issue might be unacceptable for some stakeholders such as
NGO activists(Rowley and Moldoveanu, 2003). If such activists fight, for instance, for the
eradication of slave labor in cocoa production, they will perceive any kind of compromise as a
sellout of their mission and a threat to their identity.

B. Economic-centric Focus

Porter's model primarily focuses on economic factors and competitive forces within industries.
It may not adequately address social challenges that are inherently multidimensional and go
beyond economic considerations, leading to possible misrepresentation of the relevant
investments and outcomes. Operating with a CSV mindset, corporations might tend to invest
more resources in promoting the impression that complex problems have been transformed into
win-win situations for all affected parties, while in reality problems of systemic injustice have
not been solved and the poverty of marginalized stakeholders might even have increased
because of the engagement of the corporation. Given the complexity of social and
environmental problems, their uncritical analysis as to new sources for profit might indeed drive
corporations to invest more in easy problems and decoupled communication strategies than in
solving broader societal problems.

C. Single Bottom Line Focus

Porter's model often focuses on maximizing shareholder value as the primary goal. It took
financial performance as the sole indicator such as revenue, profit margins, and return on
investment as the primary indicators of business success. The underlying assumption is that if
a company is financially healthy and profitable, it is fulfilling its primary purpose. But this
come with the sacrifice of the broader social and environmental impacts of business activities

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as well as ethical considerations. Lets take tobacco companies like British American Tobacco
company (BAT) as an example. Historically, BAT have often prioritized maximizing
shareholder value by focusing on increasing cigarette sales and profitability. In its pursuit of
financial success, has been criticized for neglecting the broader social and environmental
impacts of its products. Smoking has been linked to a range of serious health issues, including
lung cancer, heart disease, and respiratory illnesses. Additionally, the environmental impact of
tobacco cultivation and cigarette manufacturing, including deforestation and chemical use, has
raised concerns.

While tobacco companies may have been successful in maximizing shareholder value which is
the single bottom line focus, this example highlights the ethical and societal challenges that can
arise when the primary focus is on financial metrics, to the detriment of broader social and
environmental responsibilities.

A Call for Recommendations and suggestions for Porter’s CSV Model

A. Applied Triple Bottom Line

Since Porter's model often focuses on maximizing shareholder value as the single bottom line
focus, a progressive approach should advocate for a triple bottom line theory. The Triple Bottom
Line (TBL) is a concept that was introduced by John Elkington in 1994 and it consists of three
criteria, which is Profit, People and Planet (refer to Figure 1)(Elkington, 1994). It can be defined
as a concept of creating a business strategy that equally values not only profit, but also people,
and the planet. TBL framework encourages organizations to consider their impact and
responsibility mainly in planet, follow by people and finally profit. By doing so, climatic issue
that the world is facing will have a better solutions.

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Figure 2: The overlapping spheres model

B. Include Stakeholder Engagement

Stakeholder theory is a management and business theory that suggests that organizations should
consider the interests of all parties, or stakeholders, affected by their actions and decisions. R.
Edward Freeman originally detailed the Stakeholder Theory of organizational management and
business ethics that addresses morals and values in managing an organization(Freeman and
McVea, 2005). His award-winning book Strategic Management: A Stakeholder Approach
identifies and models the groups which are stakeholders of a corporation, and both describes
and recommends methods by which management can give due regard to the interests of those
groups(Freeman and McVea, 2005). Besides, Stakeholder theory and Corporate Social
Responsibility (CSR) are closely related concepts, and they often intersect in the realm of
business ethics and management. From a CSR point of view, for example, when a factory makes
industrial trash, the owners of the plant are directly responsible for getting rid of it safely. A
stakeholder theory, on the other hand, starts with the people who live nearby and may be
exposed to a polluted environment. They say that these people have a right to clean air and
water and then move on to talk about business ethics. So, they have a stake in the company and
should be able to have their say in how it runs. Even though they don't own any shares, they
should still be able to have a say in how decisions are made. This is important. The people who
are touched by what a company does become, at least in theory, like partners and owners. They
should be able to help run a business because their lives are affected by it.

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 Conclusion

In summary, the dynamic nature of social concerns necessitates a thorough evaluation of current
Corporate Social Responsibility frameworks, specifically addressing the inherent constraints
within frameworks such as Carroll's CSR pyramid and Porter's shared value idea. Although
these frameworks have yielded useful insights on corporate responsibilities, they have been
subject to criticism due to their tendency to oversimplify complex issues, prioritise economic
factors, and inadequately account for the multifaceted character of social difficulties.

In light of the intricate obstacles encountered in contemporary society, it becomes essential to

reassess and enhance CSR frameworks. The progression of these models needs to be directed
by a dedication to tackling pressing social concerns, advancing sustainable development, and
cultivating a more comprehensive and accountable corporate culture. It is only by adopting
progressive ideas that firms can really fulfil their role as beneficial contributors to the well-
being of society and the earth.

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 References
Carroll, A.B. (1991) The Pyramid of Corporate Social Responsibility: Toward the Moral
Management of Organizational Stakeholders.
Clarkson, M.B.E. (1991) Defining, Evaluating, and Managing Corporate Social
Performance: The Stakeholder Management Model. AI Press Inc., Greenwich.
Elkington, J. (1994) Enter the Triple Bottom Line.
Freeman, R.E.E. and McVea, J. (2005) ‘A Stakeholder Approach to Strategic Management’,
SSRN Electronic Journal [Preprint]. Available at: https://doi.org/10.2139/ssrn.263511.
Porter, M.E. and Kramer, M.R. (2006) ‘Strategy & Society: The Link between Competitive
Advantage and Corporate Social Responsibility’, Harvard Business Review, pp. 78–85.
Reidenbach, R.E. and Robin, D.P. (1991) A Conceptual Model of Corporate Moral
Development.
Rowley, T.J. and Moldoveanu, M. (2003) ‘When Will Stakeholder Groups Act? An Interest-
and Identity-Based Model of Stakeholder Group Mobilization’, The Academy of Management
Review, 28(2), p. 204. Available at: https://doi.org/10.2307/30040709.
Schwartz, M.S. and Carroll, A.B. (2003) ‘Corporate Social Responsibility: A Three-Domain
Approach’, Business Ethics Quarterly, 13(4), pp. 503–530. Available at:
https://doi.org/10.5840/beq200313435.
Shaw, B. and Post, F.R. (1993) A Moral Basis for Corporate Philanthropy A Moral Basis for
Corporate Philanthropy Bill Shaw, Source: Journal of Business Ethics.
Visser, W. (2005) Revisiting Carroll’s CSR Pyramid: An African Perspective.

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