Caroll Pyramid of Social Responsibility

8/3/2019 Caroll Pyramid of Social Responsibility

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he Pyramid of Corporatehe Morai Managem ent of

hie B. Carroll

or the better part of 30 years now, corpo-rate executives have struggled with theissue of the firm's responsibility to its soci-

Environmental Protection Agency (EPA), the

ety Comm ission (CPSC).These new governmental bodies established

r commitments to the corporation's ow ners

This article will explore the nature of corpo-R) with an eye to-

Social responsibilitycan only becomereality if more man-agers becomemoral instead ofamoral or immoral.

holders with those toother competing groupsclaiming legitimacy.This discussion will beframed by a pyramid ofcorporate social respon-sibility. Next, we planto relate this concept tothe idea of stakehold-ers. Einally, our goalwill be to isolate theethical or moral compo-nent of CSR and relateit to perspectives thatreflect three major ethical approaches to manage-mentimm oral, amoral, and moral. The princi-pal goal in this final section will be to flesh outwhat it means to manage stakeholders in an ethi-cal or moral fashion.EVOLUTION OF CORPORATESOCIAL RESPONSIBILITYW hat does it mean for a corporation tobe socially responsible? Academics andpractitioners have been striving to estab-lish an agreed-upon definition of this concept for30 years. In I960, Keith Davis suggested thatsocial responsibility refers to businesses' "deci-sions and actions taken for reasons at least par-tially beyond the firm's direct economic or tech-nical interest." At about the same time, Eells andWalton (196I) argued that CSR refers to the"problems that arise when corporate enterprisecasts its shadow on the social scene, and the

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Figure 1Economic and Legal Components of Corporate Social ResponsibilityEconomic Components(Responsibilities)

1. It is important to perform in amanner consistent withmaximizing earnings per share.2. It is important to be committed tobeing as profitable as possible.

3. It is important to maintain a strongcompetitive position.4. It is important to maintain a highlevel of operating efficiency.

5. It is important that a successfulfirm be defined as one that isconsistently profitable.

Legal Components(Responsibilities)

1. It is important to perform in amanner consistent with expecta-tions of government and law.2. It is important to comply withvarious federal, state, and localregulations.3. It is important to be a law-abidingcorporate citizen.4. It is important that a successfulfirm be defined as one that fulfillsits legal obligations.5. It is important to provide goodsand services that at least meetminimal legal requirements.

legitimate, had to address the entirespectrum of obligations business hassociety, including the most fundametaleconomic. It is upon this four-pperspective that our pyramid is baseIn recent years, the term corporasocial performance (CSP) has emergas an inclusive and global concept toembrace corporate social responsibilresponsiveness, and the entire spectrof socially beneficial activities of busnesses. The focus on social performaemphasizes the concern for corporataction and accomplishment in the sosphere. With a performance perspectit is clear that firms must formulate aimplement-social goals and programwell as integrate ethical sensitivity inall decision making, policies, and ac-tions. With a results focus, CSP suggean all-encompassing orientation towanormal criteria by which we assess bness performance to include quantityquality, effectiveness, and efficiency.While we recognize the vitality of thperformance concept, we have choseto adhere to the CSR terminology for

present discussion. With just a slight change ofocus, however, we could easily be discussingCSP rather than a CSR pyramid. In any event,long-term concern is what managers do withthese ideas in terms of implementation.THE PYRAMID OF CORPORATE

Fethical principles that ought to govern the rela-tionship between the corporation and society."In 1971 the Committee for Economic Devel-opment used a "three concentric circles" ap-proach to depicting CSR. The inner circle in-cluded basic economic functionsgrowth, prod-ucts, jobs. The intermediate circle suggested thatthe economic functions must be exercised with a /SOCIAL RESPONSIBILITYsensitive awareness of changing social values and /priorities. The outer circle outlined newly emerg-/ T ~ l or CSR to be accepted by a co nscientiing and still amorphous responsibilities that busi-ness should assume to become more activelyinvolved in improving the social environment.The attention was shifted from social respon-sibility to social responsiveness by several otherwriters. Their basic argument w as that the em -phasis on responsibility focused exclusively onthe notion of business obligation and motivationand that action or performance were being over-looked. The social responsiveness movement,therefore, emphasized corporate action, pro-action, and implementation of a social role. Thiswas indeed a necessary reorientation.The question still remained, however, ofreconciling the firm's economic orientation withits social orientation. A step in this direction wastaken when a comprehensive definition of CSRwas set forth. In this view, a four-part conceptu-alization of CSR included the idea that the corpo-ration has not only economic and legal obliga-tions, but ethical and discretionary (philan-thropic) responsibilities as well (Carroll 1979).The point here was that CSR, to be accepted as

business person, it should be framed isuch a way that the entire range of buness responsibilities are embraced. It is suggehere that four kinds of social responsibilities stitute total CSR: economic, legal, ethical, andphilanthropic. Furthermore, these four categoor components of CSR might be depicted as apyramid. To be sure, all of these kinds of ressibilities have always existed to some extent, it has only been in recent years that ethical anphilanthropic functions have taken a significaplace. Each of these four categories deservescloser consideration.Economic ResponsibilitiesHistorically, business organizations were creaas economic entities designed to provide gooand services to societal members. The profit mtive was established as the primary incentive entrepreneu rship. Before it was anything elsebusiness organization was the basic economicunit in our society. As such, its principal role

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Figure 1 summarizes some im-characterizing economic

according to the profit motive;

ss m ust op erate. As a partial fulfill-

They are depicted as the next layer on the

al Responsibilities

In one sense, changing ethics or values pre-

vil rights, and co nsumer movem entsseen as ethical bellwethers foreshad-

Figure 2Ethical and Philanthropic Comp onents ofCorporate Social Responsibility

Ethical Components(Responsibilities)1. It is important to perform in amanner consistent with expecta-tions of societal mores and ethicalnorms.2. It is important to recognize andrespect new or evolving ethical/moral norms adopted by society.3. It is important to prevent ethicalnorms from being compromised inorder to achieve corporate goals.

4. It is important that good corporatecitizenship be defined as doing whatis expected morally or ethically.5. It is important to recognize thatcorporate integrity and ethicalbehavior go beyond mere compli-ance with laws and regulations.

1.

2 .

3.

4.

5.

Philanthropic Components(Responsibilities)It is important to perform in amanner consistent with the philan-thropic and charitable expectationsof society.It is important to assist the fine andperforming arts.

It is important that managers andemployees participate in voluntaryand charitable activities within theirlocal com munities.It is important to provide assis-tance to private and public educa-tional institutions.It is important to assist voluntarilythose projects that enhance acommunity's "quality of life."

seen as embracing newly emerging values andnorms society expects business to meet, eventhough such values and norms may reflect ahigher standard of performance than that cur-rently required by law. Ethical responsibilities inthis sense are often ill-defined or continuallyunder public debate as to their legitimacy, andthus are frequently difcult for business to dealwith.

Superimposed on these ethical expectationsemanating from societal groups are the impliedlevels of ethical performance suggested by aconsideration of the great ethical principles ofmoral philosophy. This would include such prin-ciples as justice, rights, and utilitarianism.The business ethics movement of the pastdecade has firmly established an ethical responsi-bility as a legitimate CSR component. Though it isdepicted as the next layer of the CSR pyramid, itmust be constantly recognized that it is in dy-namic interplay with the legal responsibility cat-egory. That is, it is constantly pushing the legalresponsibility category to broaden or expandwhile at the same time placing ever higher ex-pectations on businesspersons to operate at lev-els above that required by law. Figure 2 depictsstatements that help characterize ethical responsi-bilities. The figure also summarizes philanthropicresponsibilities, discussed next.

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F i g u r e 3T h e P y r a m i d o f C o r p o r a t e S o c i a l R e s p o n s i b i l i t y

PHILANTHROPICResponsibil it iesBe a good corporate citizen.Contribute resourcesto the community;improve quality of life.

ETHICALResponsibil it iesBe ethical.Obligation to do what is right, just,an d fair. Avoid harm.

LEGALResponsibil it iesObey the law.Law is society's codification of right and wrong.Play by the rules of the game.

ECONOMICResponsibil it iesBe profitable.The foundation upon which all others rest.

Philanthropic Responsibil i tiesPhilanthropy encompasses those corporate ac-tions that are in response to society's expectationthat businesses be good corporate citizens. Thisincludes actively engaging in acts or programs topromote human welfare or goodwill. Examples ofphilanthropy include business contributions offinancial resources or executive time, such ascontributions to the arts, education, or the com-munity. A loaned-executive program that pro-vides leadership for a community's United Waycampaign is one illustration of philanthropy.The distinguishing feature iDetween philan-thropic and ethical responsibilities is that theformer are not expected in an ethical or moralsense. Communities desire firms to contributetheir money, facilities, and employee time tohumanitarian programs or purposes, but they donot regard the firms as unethical if they do notprovide the desired level. Therefore, philan-thropy is more discretionary or voluntary on the

part of businesses even though there isalways the societal expectation that busnesses provide it.One notable reason for making the dtinction between philanthropic and ethiresponsibilities is that some firms feel tare being socially responsible if they arjust good citizens in the community. Thdistinction brings home the vital point tCSR includes philanthropic contributionbut is not limited to them. In fact, it wobe argued here that philanthropy is highdesired and prized but actually less imptant than the other three categories of sresponsibility. In a sense, philanthropy icing on the cakeor on the pyramid, ing our metaphor.The pyramid of corporate social respsibility is depicted in Figure 3- It portrathe four components of CSR, beginningwith the basic building block notion theconom ic performance undergirds all eAt the same time, business is expected obey the law because the law is societycodification of acceptable and unaccepbehavior. Next is business's responsibilibe ethical. At its most fundamental levethis is the obligation to do what is rightjust, and fair, and to avoid or minimizeharm to stakeholders (employees, consers, the environment, and others). Finalbusiness is expected to be a good corprate citizen. This is captured in the philthropic responsibility, wherein businessexpected to contribute financial and huresources to the community and to impthe quality of life.No m etapho r is perfect, an d the CSRpyramid is no exception. It is intended to porthat the total CSR of business comprises disticomponents that, taken together, constitute twhole. Though the components have beentreated as separate concepts for discussion puposes, they are not mutually exclusive and arnot intended to juxtapose a firm's economic sponsibilities with its other responsibilities. Asame time, a consideration of the separate coponents helps the manager see that the differtypes of obligations are in a constant but dy-namic tension with one another. The most critensions, of course, would be between econoand legal, economic and ethical, and economand philanthropic. The traditionalist might sethis as a conflict between a firm's "concern foprofits" versus its "concern for society," but itsuggested here that this is an oversimplificatiA CSR or stakeholder perspective would reconize these tensions as organizational realitiesfocus on the total pyramid as a unified wholeand how the firm might engage in decisions.

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and programs that simultaneously fulfillits component parts.In summary, the total corporate social re-of business entails the simultaneousof the firm's economic, legal, ethical,in moreand managerial terms, the CSR firmto make a profit, obey the law, beand be a good corporate citizen.Upon first glance, this array of responsibili-to be in strikingto the classical economic argument thatto maximizeof its owners or shareholders. Econo-of this view, has argued that social mattersnot the concern of business people and thatbe resolved by theof the free market system.of its punch,in its

is "toas much money as possible while conform-to the basic rules of society, both those em-in the law and those embodied in ethical1970). Most people focus onof Friedman's quote but not theIt seems clear from this statementto the law, and ethicalof the CSRand ethical. That onlyhropic com ponent for Friedmanit may be appropriate for anto take this view, one would not en-of activities. It seems the role of corporateis one that business has no significantembracing. U ndoubtedly this perspec-is rationalized under the rubric of enlight-

We next propo se a conceptual framework toin integrating the four CSRAND ORGANIZATIONAL STAKEHOLDERS

here is a natural fit between the idea ofcorporate social responsibility and anorganization's stakeholders. The wordin CSR has always been vague and lack-in specific direction as to whom the corpora-is responsible. The concept of stakeholderor societal responsibilities byor persons busi-in its CSR orientation. Thus,andon the societal members who are mostto business, and to whom it must be re-

By now most executives understand that theterm "stakeholder" constitutes a play on the wordstockholder and is intended to more appropri-ately describe those groups or persons who havea stake, a claim, or an interest in the operationsand decisions of the firm. Sometimes the stakemight represent a legal claim, such as that whichmight be held by an owner, an employee, or acustomer who has an explicit or implicit contract.Other times it might be represented by a moralclaim, such aswhen these groups assert a right tobe treated fairly orwith due process, or to havetheir opinions taken into consideration in animportant business decision.Management's challenge is to decide whichstakeholders merit and receive consideration inthe decision-making process. Inany given in-stance, there may be numerous stakeholdergroups (shareholders, consumers, employees,suppliers, community, social activist groups)clamoring for management's attention. How domanagers sort out the urgency or importance ofthe va rious stakeholder claims? Two vital criteriainclude the stakeholders' legitimacy and theirpower. From a CSR perspective their legitimacymay be most important. From a managementefficiency perspective, their power might be ofcentral influence. Legitimacy refers to the extentto which a group has a justifiable right to bemaking its claim. For example, a group of 300employees about to be laid off by a plant-closingdecision has a more legitimate claim on manage-ment's attention than the local chamber of com-merce, which is worried about losing the firm ason e of its dues-paying members. The stake-holder's power isanother factor Here wemaywitness significant differences. Thousands ofsmall, individual investors, for example, wieldvery little power unless they can find a way toget organized. By contrast, institutional investorsand large mutual fund groups have significantpower over management because of the sheermagnitude of their investments and the fact thatthey are organized.With these perspectives in mind, let us thinkof stakeholder management as a process bywhich managers reconcile their own objectiveswith the claims and expectations being made onthem by various stakeholder groups. The chal-lenge of stakeholder management is to ensurethat the firm's primary stakeholders achieve theirobjectives while other stakeholders are also satis-fied. Even though this "win-win" outcome is notalways possible, it does represent a legitimateand desirable goal for management to pursue toprotect its long-term interests.The important functions of stakeholder man-agement are to describe, understand, analyze,and finally, manage. Thus, five major questionsmight be posed to capture theessential ingredi-

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Figure 4Stakeholder/Responsib

StakeholdersOwnersCustomersEmployeesCommunityCompetitorsSuppliersSocial Activist G roupsPublic at LargeOthers

ility M atrix

EconomicTypes

Legalof CSR

Ethical Philanthropic

ents we need for stakeholder management:1. Who are our stakeholders?2. What are their stakes?3. What opportunities and challenges arepresented by our stakeholders?4. What corporate social responsibilities (eco-nomic, legal, ethical, and philanthropic) do wehave to our stakeholders?5. What strategies, actions, or decisionsshould we take to best deal with these responsi-bilities?Whereas much could be discussed abouteach of these questions, let us direct our atten-tion here to question fourwhat kinds of socialresponsibilities do we have to our stakeholders?Our objective here is to present a conceptualapproach for examining these issues. This con-ceptual approach or framework is presented asthe stakeholder/responsibility matrix in Figure 4.This matrix is intended to be used as an ana-lytical tool or template to organize a manager'sthoughts and ideas about what the firm ought tobe doing in an economic, legal, ethical, and phil-anthropic sense with respect to its identifiedstakeholder groups. By carefully and deliberatelymoving through the various cells of the matrix,the m anager may d evelop a significant descrip-tive and analytical data base that can then beused for purposes of stakeholder management.The information resulting from this stakeholder/responsibility analysis should be useful whendeveloping priorities and making both long-termand short-term decisions involving multiplestakeholder's interests.

To be sure, thinking in stakeholderesponsibility terms increases the complexity of decision making and may bextremely time consuming and taxingespecially at first. Despite its complexihowever, this approach is one methodogy management can use to integrate ues^what it stands forwith the tradtional economic mission of the organition. In the final analysis, such an intetion could be of significant usefulnessmanagement. This is because the stakholder/responsibility perspective is moconsistent with the pluralistic environmfaced by business today. As such, it prvides the opportunity for an in-depth cporate appraisal of financial as well associal and economic concerns. Thus, tstakeholder/responsibility perspectivewould be an invaluable foundation foresponding to the fifth stakeholder maagement question about strategies, actor decisions that should be pursued toeffectively respond to the environmenbusiness faces.

MORAL MANAGEMENT AN DSTAKEHOLDERSA t this juncture we would like to expupon the link between the firm's ethresponsibilities or perspectives and imajor stakeholder groups. Here we are isolatthe ethical com ponen t of ou r CSR pyramid adiscussing it more thoroughly in the context stakeholders. One way to do this would be tuse major ethical principles such as those of tice, rights, and utilitarianism to identify and scribe our ethical responsibilities. We will takanother alternative, however, and discuss staholders within the context of three major ethapproachesimmoral management, amoral magement, and moral management. These threethical approaches were defined and discussan earlier Business Horizons article (Carroll 1We will briefly describe and review these threthical types and then suggest how they migoriented toward the major stakeholder groupOur goal is to profile the likely orientation ofthree ethical types with a special emphasis umoral management, our preferred ethical ap-proach.Three Moral TypesIf we accept that the terms ethics and moraliare essentially synonymous in the organizatiocontext, we may speak of immoral, amoral, amoral managem ent as descriptive categories three different kinds of managers. Immoral m

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An example might be helpful. Many observ-

1989).The second major type of management ethicsmoral managem ent. Amoral managers are

cal perception or awareness.

cal guide. We have b een describing aegory of amorality know n as unintentional

Examples of unintentional amorality abound.

ples. They did not anticipate that their

holism, drunk driving deaths, lung cancer, dete-riorating health, and offensive secondary smoke.Finally, when McDonald's initially decided to usepolystyrene containers for food packaging it justdid not adequately consider the environmentalimpact that would be caused. McDonald's surelydoes not intentionally create a solid waste dis-posal problem, but one major consequence of itsbusiness is just that. Fortunately, the companyhas responded to complaints by replacing thepolystyrene packaging with paper products.Moral management is our third ethical ap-proach, one that should provide a striking con-trast. In moral management, ethical norms thatadhere to a high standard of right behavior areemployed. M oral managers not only conform toaccepted and high levels of professional conduct,they also commonly exemplify leadership onethical issues. Moral managers want to be profit-able, but only within the confines of sound legaland ethical precepts, such as fairness, justice, anddue process. Under this approach, the orientationis toward both the letter and the spirit of the law.Law is seen as minimal ethical behavior and thepreference and goal is to operate well abovewhat the law mandates. Moral managers seek outand use sound ethical principles such as justice,rights, utilitarianism, and the Golden Rule toguide their decisions. When ethical dilemmasarise, moral managers assume a leadership posi-tion for their companies and industries.There are numerous examples of moral man-agement. When IBM took the lead and devel-oped its Open Door policy to provide a mecha-nism through which employees might pursuetheir due process rights, this could be consideredmoral management. Similarly, when IBM initiatedits Four Principles of Privacy to protect privacyrights of employees, this was moral management.When McCullough Corporation withdrew fromthe Chain Saw Manufacturers Association becausethe association fought mandatory safety standardsfor the industry, this was moral management.McCullough knew its product was potentiallydangerous and had used chain brakes on its ownsaws for years, even though it was not requiredby law to do so. Another example of moral man-agement was when Maguire Thomas Partners, aLos Angeles commercial developer, helped solveurban problems by saving and refurbishing his-toric sites, putting up structures that matched oldones, limiting building heights to less than thelaw allowed, and using only two-thirds of theallowable building density so that open spacescould be provided.Orientation Toward StakeholdersNow that we have a basic understanding of thethree ethical types or approaches, we will pro-

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pose profiles of what the likely stakeholder ori-entation might be toward the major stakeholdergroups using each of the three ethical ap-proaches. Our goal is to accentuate the moralmanagement approach by contrasting it with theother two types.

Basically, there are five major stakeholdergroups that are recognized as priorities by mostfirms, across industry lines and in spite of size orlocation: owners (shareholders), employees, cus-tomers, local communities, and the society-at-large. Although the general ethical obligation to

each of these groups is essentially identical tect their rights, treat them with respect and ness), specific behaviors and orientations aribecause of the differing nature of the groupsan attempt to flesh out the character and salifeatures of the three ethical types and their sholder orientations. Figures 5 and 6 summathe orientations these three types might assuwith respect to four of the major stakeholdergroups. Because of space constraints and thgeneral nature of the society-at-large categorhas been omitted.

Figure 5Three Moral Types and Orientation TowardStakeholder Groups: Owners and EmployeesType of ManagementImmoral Management

Amoral Management

Moral Management

Type of ManagementImmoral Management

Amoral Management

Moral Management

Orientation Toward Owner/Shareholder StakeholdersShareholders are minimally treated and given short shrift. Focus is onmaximizing positions of executive groupsmaximizing executive com-pensation, perks, benefits. Golden parachutes are more important thanreturns to shareholders. Managers maximize their positions without share-holders being made aware. Concealment from shareholders is the operat-ing procedure. Self-interest of management group is the order of the day.No special thought isgiven to shareholders; they are there and must beminimally accommodated. Profit focus of the business is their reward. Nothought is given to ethical consequences of decisions for any stakeholdergroup, including owners. Communication is limited to that required bylaw.Shareholders' interest (short- and long-term) is a central factor. The bestway to be ethical to shareholders is to treat all stakeholder claimants in afair andethical manner. To protect shareholders, an ethics committee ofthe board iscreated. Code of ethics isestablished, promulgated, andmadea living document to protect shareholders' and others' interests.

Orientation Toward Employee StakeholdersEmployees are viewed as factors of production to be used, exploited,manipulated for gain of individual m anager or company. No concern isshown for employees' needs/rights/expectations, short-term focus. Coer-cive, controlling, alienating.Employees are treated as law requires. Attempts to motivate focus onincreasing productivity rather than satisfying employees' growing maturityneeds. Employees still seen as factors of production but remunerativeapproach used. O rganization sees self-interest in treating employees withminimal respect. Organization structure, pay incentives, rew ards allgearedtoward short- and medium-term productivity.Employees are a human resource that must be treated with dignity andrespect. Goal is to use a leadership style such as consultative/participativethat will result in mutual confidence and trust. Commitment is a recurringtheme. Employees' rights to due process, privacy, freedom of speech, andsafety are maximally considered in all decisions. Management seeks outfair dealings with employees.

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By carefully considering the described stake-

is to gain a fuller understanding of what itThough the concept of corporate socialresponsibility may from time to time besupplanted by various other focuses suchas social responsiveness, social performance,public policy, ethics, or stakeholder management,an underlying challenge for all is to define thekinds of responsibilities management and busi-nesses have to the constituency groups withwhich they transact and interact most frequently.The pyramid of corporate social responsibilitygives us a framework for understanding theevolving nature of the firm's economic, legal,ethical, and philanthropic performance. Theimplementation of these responsibilities may varydepending upon the firm's size, management's

Figure 6Three Moral Types and Orientation TowardStakeholder Groups: Customers and Local CommunityType of ManagementImmoral Management

Amoral Management

Moral Management

Type of ManagementImmoral Management

Amoral Management

Moral Management

Orientation Toward Customer StakeholdersCustomers are viewed asopportunities to be exploited for personal ororganizational gain. Ethical standards indealings do not prevail; indeed , anactive Intent to cheat, deceive, and/or mislead is present. In all marketingdecisionsadvertising, pricing, packaging, distributioncustomer is takenadvantage of to thefullest extent.Management does not think through theethical consequences of its deci-sions and actions. It simply makes decisions with profitability within theletter of the law as a guide. Management is not focused onwhat is fairfrom perspective of customer. Focus is on management's rights. No consid-eration isgiven to ethical implications of interactions with c ustomers.Customer isviewed asequal panner in transaction. Customer brings needs/expectations to the exchange transaction and is treated fairly. Managerialfocus is on giving customer fair value, full information, fair guarantee, andsatisfaction. Consumer rights are liberally interpreted and honored.Orientation Toward Local Community StakeholdersExploits community to fullest extent; pollutes theenvironment. Plant orbusiness closings take fullest advantage of community. Actively disregardscommunity needs. Takes fullest advantage of community resources withoutgiving anything in return. Violates zoning and other ordinances whenever itcan for its own advantage.Does not take community or its resources into account in managementdecision making. Community factors are assumed to be irrelevant to busi-ness decisions. Community, like em ployees, is a factor of production. Legalconsiderations are followed, but nothing more. Deals minimally with com-munity, its people , community activity, local governm ent.Sees vital community as a goal to be actively pursued. Seeks to be a lead-ing citizen and to motivate others to do likewise. Gets actively involvedand helps institutions that need helpschools, recreational groups, philan-thropic groups. Leadership position in environment, education, culture/arts,volunteerism, and general community affairs. Firm engages in strategicphilanthropy. Management sees community goals and company goals asmutually interdependent.

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philosophy, corporate strategy, industry charac-teristics, the state of the economy, and other suchmitigating conditions, but the four componentparts provide management with a skeletal outlineof the nature and kinds of their CSR. In frank,action-oriented terms, bu siness is called up on to:be profitable, obey the law, be ethical, and be agood corporate citizen.The stakeholder management perspectiveprovides not only a language and way to person-alize relationships with names and faces, but alsosome useful conceptual and analytical conceptsfor diagnosing, analyzing, and prioritizing anorganization's relationships and strategies. Fffec-tive organizations will progress beyond stake-holder identification and question what opportu-nities and threats are posed by stakeholders;what econom ic, legal, ethical, and philanthropicresponsibilities they have; and what strategies,actions or decisions should be pursued to mosteffectively address these responsibilities. Thestakeholder/responsibility matrix provides a tem-plate m anagement might use to organize itsanalysis and decision making.Throughout the article we have been build-ing toward the notion of an improved ethicalorganizational climate as manifested by moralmanagement. Moral management was definedand described through a contrast with immoraland amoral management. Because the businesslandscape is replete with immoral and amoralmanagers, moral managers may sometimes behard to find. Regardless, their characteristics havebeen identified and, most important, their per-spective or orientation towards the major stake-holder groups has been profiled. These stake-holder orientation profiles give managers a con-ceptual but practical touchstone for sorting outthe different categories or types of ethical (ornot-so-ethical) behavior that may be found inbusiness and other organizations.It has often been said that leadership by ex-ample is the most effective way to improve busi-ness ethics. If that is true, moral managementprovides a model leadership perspective or orien-tation that managers may wish to emulate. Onegreat fear is that managers may think they areproviding ethical leadership just by rejecting im-moral management. However, amoral manage-ment, particularly the unintentional variety, mayunconsciously prevail if managers are not awareof what it is and of its dangers. At best, amoralityrepresents ethical neutrality, and this notion isnot tenable in the society of the 1990s. The stan-dard must be set high, and moral managementprovides the best exemplar of what that lofty

standard m ight em brace. Further, moral manament, to be fully appreciated, needs to be sewithin the context of o rganization-stakeholderelationships. It is toward this singular goal tour entire discussion has focused. If the "goosociety" is to become a realization, such a hiexpectation only naturally becom es the aspirand preoccupation of management. ReferencesR.W. Ackerman and R.A. Bauer, Corporate Social sponsiveness (Reston, Va.: Reston Publishing Co, 1A.B. Carroll, "A Three-D imension al C onceptu al Mof Corporate Social Performance," Academy of Magement Review, 4, 4 (1979): 497-505.A.B. Carroll, "In Search of the Moral Manager," Buness Horizons, March-April 1987, pp. 7-15.Committee for Economic Development, Social Resibilities of Business Corporations (New York: CED1971).K. Davis, "Can Business Afford to Ignore its SociaResponsibilities?" California Manageme nt Review,(I960): 70-76:R. Eelis and C. Walton, Conceptual Foundations oBusiness ()/{omewoo. 111.: Richard D. Irwin, 196l"Good Timing, Charlie," Forbes, November 27, 19p p . 140-144.W.C. Frederick, "From CSR^ to CSR^: The MaturingBusiness and Society Thought," University of PittsWorking Paper No. 279, 1978.M. Friedman, "The Sociai Responsibility of Busineto Increase its Profits," New York Times, Septembe1970, pp. 122-126.S.P. Sethi, "Dimensions of Corporate Sociai Respobility," California Management Review, 17,'5 (19758-64.

Archie B. Carroll is Robert W, SchererProfessor of Management and Corpo-rate Public Affairs at the College ot Busi-ness Administration , University of Geo r-gia, Athens.

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Documents

Caroll Pyramid of Social Responsibility