Introduction
Many businesses operations have embraced the concept of corporate social responsibility and this has attracted attention of many researchers. The aim of this review is to study the work of one such researcher, Caroll Archie, and rate her article, The Pyramid of Corporate Social Responsibility: toward the Moral Management of Organizational Stakeholders (1991), in the contemporary business setting. In her article, she outlines the major aspects of Corporate Social Responsibility (CSR). These include its four major components and their relationship in business. The four components embody economic, legal, ethical and philanthropic responsibilities of a business to its stakeholders with emphasis on the role of moral ethics in decisions and actions of the business management. This paper explores the components as well as their relevance in the contemporary business community.
Main body
Historians argue that in the ancient world the most important goal for business organizations was profit-making. This perception has changed over the decades. Besides adherence to the rules and regulations that control business in a given state, the business’ impact to the society is an important factor that the management in any business organization has to put into consideration while making decisions. Ethical and moral considerations play a pivotal role in ensuring that business activities cause no harm to its stakeholders. In some instances, business organizations fulfill the basic legal and ethical requirements besides formulating humanitarian programs. The programs benefit the society in different ways. For instance, some organizations give financial support to needy students as well as children with special needs in children homes. This paper seeks to find out how effective Archie’s approach is in integrating the various aspects that business organizations need to meet and still remain fruitful not only to their major stakeholders but also to the entire society.
In her article, Archie gives a detailed account of the social responsibility of business organizations. According to her, CSR has undergone different phases in trying to enable business activities to yield the desired positive impact to the society. Initially, the major concern of businesspeople was to make profit thus showed little or no concern to the society. To them, a nation’s rules and regulations pertaining business activities were a barrier in their efforts to meet their business goals. Later on, most states demanded that business organizations should adhere to the set laws as they strive to meet their economic goals. The society expects business decisions and actions portray justice to the society. To do this, business management systems should not only follow the set rules and regulations but also societal expectations-ethical guidelines. The author acknowledges that some organizations engage in humanitarian activities out of good will for the wellbeing of the society. Archie notes that these are part of the philanthropic responsibilities of an organization. Though not the part of the societies’ expectations for business organizations, such activities improve the image of the business-competitive advantage. To make sure that organizations meet these responsibilities, Archie notes that it is important to set up a good relationship between the business management and the stakeholders. The stakeholder’s legitimacy and power should act as the basis for decision-making in business. She postulates a matrix to guide business management systems towards achieving this goal. Building on earlier works on the topic, Archie discusses the three types of ethical approaches in business-immoral, amoral, and moral management approaches. She concludes that a moral management approach is fundamental in ensuring a fruitful relationship between stakeholders and the management.
For any business organization with the aim of achieving its economic goals, Archie’s article would be very instrumental. The author not only presents the major components of CSR but also their inter-relatedness, which increases people’s understanding of the subject. Another aspect that makes the article relevant in the contemporary business society is that the author offers a guide to management systems on how to enhance a fruitful relationship with the stakeholder groups while putting into consideration stakeholder legitimacy and power. Archie postulates a matrix that can act as a guide to proper management of any business organization. Researchers have to link their work with the works of others in the field for people to consider their work relevant. The author has helped to expound on the work of Milton Friedman by adding philanthropic responsibilities to the other three components that Friedman had established. This increases cohesion of her work with those of other researchers. Additionally, Archie builds up on the three major ethical types and gives her stand on this subject. A relevant example of the impact of failure to adhere to CSR is the 2010 BP oil spill, which led to low sales for the company because of ignoring its ethical responsibility to the society. The article’s weakness is that it gives no solution to immoral and amoral management approaches as a measure of ensuring that all business management systems practice the moral management approach.
Conclusion
Caroll Archie’s article, The Pyramid of Corporate Social Responsibility: toward the Moral Management of Organizational Stakeholders (1991), provides relevant information to business organizations in the contemporary society. It provides a detailed account of corporate social responsibility-its major components as well as how to apply them. It also outlines the place of morality as an important aspect in business management.
