An Analysis of Corporate Social Responsibility Models and Theories

This report provides an in-depth analysis of Corporate Social Responsibility (CSR) and its significance in modern business practices. It explores various tools and models, including the Friedman vs. Freeman Theory, the Triple Bottom Line Approach, the CSR Pyramid, and the EFQM Excellence Model. The report contrasts and compares these theories, providing real-world examples to illustrate their applications and benefits, such as enhanced sustainability and improved brand image. The analysis emphasizes the importance of fulfilling responsibilities towards society, the environment, and stakeholders, highlighting how organizations can implement these tools to improve their processes, products, and services. The report concludes that integrating CSR principles is crucial for long-term organizational success and sustainability.

SOCIAL
RESPONSIBILITY
OF BUSINESS

EXECUTIVE SUMMARY
The following report will talk about importance of corporate social responsibility in an
organisation with the help of applying different tools and models in their practise. The report will
also cover different tools and models such as EQFM Model, Triple Bottom Line Approach, CSR
Pyramid and Friedman vs. Freeman Theory. From all of these models, it has been derived that
fulfilment of responsibilities by an organisation towards society, environment and themselves is
at utmost preferences. Along with this, companies could also make implementation of these tools
and techniques for making improvements in their processes, products and services as well.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
Friedman vs. Freeman Theory....................................................................................................4
Triple Bottom Line Approach.....................................................................................................5
CSR Pyramid...............................................................................................................................6
EFQM Excellence Model............................................................................................................7
CONCLSUION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Social Responsibility is an important concept for every organisation to consider and work
upon to contribute something to society and community in which it is established and is making
use of their resources as well. Corporate Social Responsibility is an essential part which makes
an organisation liable towards the society, people and environment and makes them to fulfil their
responsibilities towards them (Definitions of corporate social responsibility - What is CSR?,
2019). The assignment will focus on presenting, comparing and contrasting of different theories
and models and their applications along with specific examples which provides companies with
different benefits such as sustainability, good brand image and many more from the application
of these tools in working of different organisations.
MAIN BODY
Friedman vs. Freeman Theory
Friedman Theory Freeman Theory
The following theory was proposed by Milton
Friedman, an American Economist during the
period of Great Depression in between 1867-
1960s. This theory is also stated as
Shareholders Theory.
This theory was proposed by Edward Freeman
which was named as Stakeholders Theory.
This theory was founded in the year 1984.
This theory was related to money not to other
factors such as output, incomes or prices.
Friedman was totally focused on money as
from his perspective nothing was more
important than money (Moratis and Cochius,
2017).
On the other hand, the consideration of
Freeman was related to considering every
factor which was affected by the working of an
organisation. The focus was not only on the
money but there were also other factors which
were important more than and equals to money
depending upon the situation.
The following economist sees money in two
forms only of which one is medium for
exchange and the second is an asset.
This economist considers money in many
forms such for making profit, for survival and
growth, satisfaction of shareholders,
contribution to society, environment and

people as well.
It includes only money. No other factor is
considered here.
On the other hand, the following theory
considers about customers, suppliers, political
action groups, local communities, governments
and many more.
On the basis of above discussion, the recommendation is provided about Freeman's
Theory which has made its focus on not only on one concept but on different aspects considering
the future as well. Looking on today's world, the best will be this theory because in today's
world, not only money is important but there are many other factors which provides an
organisation with sustainable competitive advantage. For example, BMW deals in luxurious cars
so in case, it consider only money aspect and ignores the legal factors such as government than
in this case, there will be negative impact on its working due to government intervention. This
will also destroy brand image of business in the marketplace and minds of customers as well.
Triple Bottom Line Approach
The following framework or theory recommends an organisation about making their
focus on social, environmental likewise they do on economical concepts. In other words, it can
also be said that Social Approach shows people and community, Environmental Approach shows
consideration related to planet and Economical Approach considers about Profit of an
organisation (Leipziger, 2017). The explanation has been provided as under:
Social Approach: This approach focuses on betterment and consideration by an organisation to
their employees, community and people at their first preference. For example, Google should
firstly focus on people, community and employees such as by providing services according to the
need of people, contribution towards community in which it is established and salary and
incentives along with good working environment to their employees. This will help in making
business sustainable.
Environmental Approach: This approach focuses on protection of environment also at an
important preference. As there are increasing issues with environment so the importance of
consideration of this factor also increases because of issues such as global warming, pollution,
emission of harmful gases and many more impacting negatively on the environment. For

example, the pollution caused due to use of BMW Cars pollutes the environment, so the solution
to this problem could be related to improvements in the technology that could cause low
emission of gases or the use of electric cars so that environmental protection could be done.
Economical Approach: The following approach is considered as the bottom approach which
should be fulfilled at the last stage or on the fulfilment of above stated approaches only. It is
related to earning of profit by the companies for their survival and growth and for their incomes
as well (Grayson and Hodges, 2017). But along with this, the consideration about the
preservation of environment and tastes and preferences of customers should also needed to be
taken into consideration. For example, Logo company can make their utmost preference to
society and environment and after that it should consider to their profit. With the help of this
policy and working, it will be possible for the company to gain faith of people, contribution
towards environment and society and will be able to build a good brand image of the company in
the market.
CSR Pyramid
The development of following Pyramid was done by Archie Caroll and provided the
pyramid with its focus on four main responsibilities of the business which are Economical,
Legal, Ethical and Discretionary. The development of this pyramid has been done on the basis of
looking over the situations of current business environment. It is because in today's world,
people, society, government all are concerned and have proper knowledge about the market,
companies, environment and all other factors. Customer is the kind of the market in today's
world. So only by considering these aspects by the organisation, their survival could be possible
in the business environment. In the current times, companies are required to come forward and
work for the growth and the betterment of society as well by contributing a part of their earnings
and profits (McWilliams, 2015). The explanation of different concepts covered under this
Pyramid is provided as under:
The first component of the framework is regarding the economic responsibility of the
company which is related to earning sufficient profits for the growth and survival of their relative
organisations.
In the second component, the consideration is related to legal factors where an
organisation is required to follow rules and regulations and follow legal compliances set by
society so as to prevent themselves indulging in government and legal issues impacting

negatively upon their performance, brand image and goodwill of the company. Sometimes, these
issues may end to end of the organisation also.
The third component of this pyramid links to ethical responsibility of companies under which
they are require to make their activities, business operations in an ethical manner, such as
Microsoft could provide their high quality services to their customers at affordable prices,
fulfilment of social responsibility, presenting their real financial statements and records in front
of people are counted under Ethical responsibilities of an organisation.
The forth component is the discretionary responsibility of the business under which the
involvement of an organisation in their contribution towards the development, betterment and
growth of society is counted. For example, BMW could develop some new people awareness
programs towards environment or could also make some new schools or colleges for children are
all covered under Discretionary Responsibilities of an organisation.
EFQM Excellence Model
EFQM stands for European Foundation for Quality Management. It was founded in the
year 1988 and the main objective of the establishment is related to providing companies with the
ways that could help them in improving their performance on continuous basis (Spence, 2016).
In accordance with this model, it explains about the quality management model that
focuses on the improvement in the overall quality, efficiency and sustainability in the business so
that better services could be provided to their customers along with fulfilling their obligations
towards society, environment and government as well. The following model is based on Total
Quality Management (TQM) Approach. Both of the concepts are focused on continuous
improvement in the overall quality of their products and services. The following model has been
divided into Five Enablers and Four Results which are also been discussed. The Five Enablers
are listed as under:
 Leadership
 People
 Policy & Strategy
 Partnerships & Resources
 Processes
The Four Result Indicators are also listed as under:
 People Result

 Customer Result
 Society Result
 Key Performance Results
The following model is a continuous process with the help of which the focus is made on
finding new ways of making improvement in the products and services of an organisation. With
the help of above provided diagram, it has been shown about the areas of focus of organisation as
what can be achieved and what cannot be? The following model provides the organisation with a
chance to know about their own place that where they are standing currently in the quality
management process (Quarshie, Salmi and Leuschner, 2016). The improvements in the quality
processes starts with knowing about the results or performance of their employees. On the very
basis, there have been specified five development stages and they are listed as under:
Activity Oriented:
In the first stage, the focus of the organisation is being made on the activities which are
performed in the organisation, on the basis of the rules and regulations which are being made by
the professionals.
Process Oriented:
Overlooking and controlling the processes are the key elements of process stage under
which power, duties and responsibilities are clearly defined. After this, improvements in the
processes are made only after the evaluation of the performance of organisation.

System Oriented:
Controls of the processes is related to controlling the processes of company internally as
well as externally.
Chain Oriented:
In this stage, the focus is made on the overlooking on the processes of the company as
well as on the relationship of the company with their customers, suppliers and other partners in
the key chain of the company (Safwat, 2015).
With the help of focusing and application this model in their working, it will be possible
for companies such as BMW, Microsoft, Logo, Google and many more to make good
improvements in their products and services for the betterment and growth of their organisation.
CONCLSUION
From the above assignment, it has been concluded that corporate social responsibility is
an important concept with the help of which the growth and survival of organisation in the
market is made possible. In addition to this, it has also been concluded that the application of
different tools and models will also help in delivering good performances and improvements in
the organisation's performance. Further, the conclusion has been drawn about the importance of
environment and people above the profits of the company as without people and environment
survival is not possible and profit could only be earned with the help of people so their
satisfaction should be kept by companies at utmost preference.

REFERENCES
Books and Journals
Moratis, L. and Cochius, T., 2017. ISO 26000: The business guide to the new standard on social
responsibility. Routledge.
Leipziger, D., 2017. The corporate responsibility code book. Routledge.
Grayson, D. and Hodges, A., 2017. Corporate social opportunity!: Seven steps to make
corporate social responsibility work for your business. Routledge.
McWilliams, A., 2015. Corporate social responsibility. Wiley encyclopedia of management,
pp.1-4.
Spence, L. J., 2016. Small business social responsibility: Expanding core CSR theory. Business
& Society. 55(1). pp.23-55.
Quarshie, A. M., Salmi, A. and Leuschner, R., 2016. Sustainability and corporate social
responsibility in supply chains: The state of research in supply chain management and
business ethics journals. Journal of Purchasing and Supply Management. 22(2). pp.82-
97.
Safwat, A. M., 2015. Corporate social responsibility: Rewriting the relationship between
business and society.
Online
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