What is Corporate Social Responsibility?

Learning Outcomes

  • Discuss corporate social responsibility

A pile of several small triangular signs. Each sign has a red outline, and a black question mark in the center.Corporate social responsibility, or CSR, is a corporation’s obligation to its stakeholders, including employees, clients/customers, investors and the community or communities where it’s based or operates. Although many businesses take that obligation to heart, CSR has also been used for damage control, as a smoke screen and simply to generate media mentions (PR). The framework for CSR as a practice was articulated by business management author and professor Dr. Archie Carroll in his 1991 article “The Pyramid of Corporate Social Responsibility” (available as a free download from researchgate.net).[1] In this article, Dr. Carroll summarizes the evolution of executive thinking on the responsibility of a corporation to society, from maximizing financial return to shareholders to an understanding of an organization’s obligation to conform to applicable laws and, ultimately, due to the passage of social legislation and creation of related enforcement agencies, including the Environmental Protection Agency (EPA), Equal Employment Opportunity Commission (EEOC), Occupational Safety & Health Administration (OSHA) and Consumer Product Safety Commission (CPSC), a recognition that the environment, employees and consumers are “significant and legitimate stakeholders of business.”

Carroll's CSR Pyramid. There are four sections. From the base of the pyramid to the top of the pyramid: Economic, Legal, Ethical, and Philanthropic.To put these obligations in perspective, Caroll proposed a pyramid of corporate social responsibility with four levels, from the base to the top: economic, legal, ethical and philanthropic. A business’ first responsibility—economic, at the base—is to be profitable. This is generally interpreted broadly: to create useful products and services, to create jobs that pay a fair wage, to maintain a strong competitive position and a high level of operating efficiency and to provide a return on investment to owners and shareholders. The second level—legal—reflects a business’ responsibility to obey the law. Specifically, a business is expected “to perform in a manner consistent with expectations of government and law,” complying with relevant laws, fulfilling legal obligations and providing goods and services that at least meet minimal legal requirements. The third level is ethical responsibility, which Caroll describes as performing “in a manner consistent with expectations of societal and ethical norms,” noting that “it is important to recognize that corporate integrity and ethical behavior go beyond mere compliance with laws and regulations.”[2] Ethics is generally interpreted as “doing the right thing,” even if it’s not required by law. At the top of the pyramid is philanthropic responsibility. This is also referred to as discretionary responsibility and includes the range of actions associated with being a good global citizen from supporting arts and culture and education, participating in volunteer and charitable activities and other initiatives that contribute to a community’s quality of life.

Practice Question

CASE study: Alodia

How did Pharrell Williams “paying it forward” lead to Alodia “paying it back”?

A professional photo of Alodia's founder Dr. Chambers-Harris.

Alodia is a hair-care brand founded by Dr. Isfahan Chambers-Harris. With a background in Biomedical Sciences and a passion for healthy hair, she combined her skills and knowledge into the creation of Alodia. Dr. Chambers –Harris earned her Bachelor of Science degree in Biology from City University of New York – Medgar Evers College in 2004. She then went on to complete her Ph.D. in Biomedical Sciences at the Cardiovascular Research Institute at Morehouse School of Medicine in Atlanta, Georgia.

Dr. Chambers-Harris’ personal hair journey began several years ago. Suffering from damage, breakage and dryness, Dr. Chambers-Harris decided to go natural. During the transition stage, she began crafting products in her kitchen that would help grow, nourish, and condition her multi-textured hair.

After consistently testing her products and seeing the amazing results she achieved with her own hair – she knew she was onto something and decided to bring her formulations to the masses. To that end, Alodia worked to become an approved vendor at Target. After much hard work, Alodia received their first purchase order from the retail giant. But this was 2021 in the middle of the pandemic, when supply-chain issues constrained the production of Alodia’s products to the point of not being able to fulfill the Target order.

As a private, black-owned company, Alodia found it difficult to secure additional funding from investors to purchase alternate materials. But then a game-changer: Alodia received a $250,000 award from the Pharrell Williams Black Ambition competition. This funding from Pharrell Williams’ foundation gave Alodia the capital it needed to begin a successful business relationship with Target.

Today, the company is an international brand that offers luxury hair care products and services that are naturally, medically and nutritionally sound. The core of the business focuses on 3 areas: individual hair products, hair product kits, and scalp consultations. Dr. Chambers-Harris is working to expand Alodia’s offering to natural, sustainable skin care and baby care products.

Another area that Dr. Chambers-Harris is extremely passionate about is philanthropy and humanitarian issues. Alodia will align itself with non-profits who deal with causes/diseases that resonate with Dr. Chamber-Harris’ personal mission to heal and help those in need around the world.

Currently, she is collaborating with the Sisters Network for Breast Cancer Survivors (DC Chapter), where she has given seminars on how to grow healthy hair after chemo. She is also interested in working with disadvantaged youth that have an interest in the science, technology, engineering and math (STEM) professions.

By “paying it forward”, we make it possible for others to “pay it back”. This is true not just for individuals, but for businesses large and small.



100+ Black-owned businesses to support in 2022 and beyond. www.nbcnews.com/select/shopping/black-owned-business-guide-ncna1258948. Accessed May 26, 2022.

Alodia: meet the owner. www.alodiahaircare.com/pages/from-the-owner. Accessed May 26, 2022.

The concept of CSR has enlarged in recent years, with CSR being defined more broadly to encompass the full range of responsibilities a business has to society. For example, you will find multiple descriptions of CSR as a commitment to managing the social, environmental and economic effects of a business which is, of course, the working definition of sustainability. Indeed, Business News Daily describes CSR as “an evolving business practice that incorporates sustainable development into a company’s business model.”[3]

Ultimately, it doesn’t matter whether you approach corporate responsibility from a sustainability perspective or as a CSR initiative that incorporates sustainability. What’s important is to understand the context and the business relevance of CSR. As with sustainability, CSR activities help businesses cultivate a positive perception (brand image) with employees, consumers, the community and NGO and regulatory organization. As Investopedia notes, “CSR activities can help forge a stronger bond between employee and corporation; they can boost morale and can help both employees and employers feel more connected with the world around them.”[4]

  1. Carroll, Archie B. "The Pyramid of Corporate Social Responsibility: Toward the Moral Management of Organization Stakeholders." 1991. Accessed July 18, 2019.
  2. Ibid.
  3. Schooley, Skye. "What is Corporate Social Responsibility?" Business News Daily. April 22, 2019. Accessed July 18, 2019.
  4. Chen, James. "Corporate Social Responsibility (CSR)." Investopedia. February 11, 2019. Accessed July 18, 2019.