Ch 2, Instructor’s Manual, Business & Society, Carroll 10e
Chapter 2
Corporate Social Responsibility, Citizenship, and Sustainability
LEARNING OUTCOMES
After studying this chapter, you should be able to:
1. Describe some early views of corporate social responsibility (CSR). Explain how CSR
2. Articulate the traditional arguments both against and for CSR. Explain how the business
case for CSR has strengthened the concept’s acceptance.
4. Summarize how corporate social performance (CSP) became more popular. Describe how
it is different than CSR. Elaborate on how it differs from corporate social responsiveness.
5. Describe how corporate citizenship is a valuable way of thinking about CSR. Explain its
7. Explain how sustainability is a broad concept that embraces profits, people, and the planet.
Describe how the triple bottom line is a vehicle for implementing sustainability.
9. Describe and characterize the socially responsible investing movement. Differentiate
between negative and positive screens that are used in investment decisions.
TEACHING SUGGESTIONS
INTRODUCTION – This chapter explores several different aspects of the CSR topic and
provides some insights into what CSR means and how businesses are carrying it out. An entire
chapter is devoted to CSR concepts because it is a core idea that underlies most of the material in
the textbook. This chapter also focuses on the concept of corporate citizenship.
KEY TALKING POINTS – In some ways this may be a difficult chapter to teach, since the
instructor will be laying the foundation for future discussions that will more directly involve
analyzing and evaluating corporate social performance. The current chapter focuses on the
analytical tools we will be using rather than actually using those tools. In some ways this
distinction can be likened to a teenager learning how the steering wheel, brake, and accelerator
Ch 2, Instructor’s Manual, Business & Society, Carroll 10e
requires the simultaneous execution of economic, legal, ethical and philanthropic
responsibilities. Many students may struggle with the concept that these responsibilities need to
be addressed concurrently by firms, since previous exposure to the concept may have focused on
the idea that CSR is the culmination of the ethical and/or philanthropic activities of firms rather
than the culmination of all four responsibilities. Consequently, students in your class may not be
as anxious to delve into the intricacies of corporate citizenship, including corporate social
PEDAGOGICAL DEVICES – In this chapter, instructors may utilize a combination of:
Cases:
1-Wal-Mart- The Main Street Merchant of Doom
2-The Body Shop (A) – Pursuing Social and Environmental Change
3-The Body Shop (B) – Reputation is Tarnished
4-The Body Shop (C) – Into the New Millennium
7-Using Ex-Cons to Teach Business Ethics
12-Banned if You Do, Banned if You Don’t
19-Should Directors Shine Light on Dark Money?
Ethics in Practice Cases:
The Socially Responsible Shoe Company
Burgers with a Soul—Fresh, Local, Sustainable
Spotlight on Sustainability:
Sustainability’s Stock is Rising
Ch 2, Instructor’s Manual, Business & Society, Carroll 10e
Myths about Sustainability
Power Point slides:
LECTURE OUTLINE
I. CORPORATE SOCIAL RESPONSIBILITY (CSR) AS A CONCEPT
A. Historical Perspective on CSR
B. Adaptations of the Economic Model
C. Evolving Meanings of CSR
D. A Four-Part Definition of CSR
1. Economic Responsibilities
3. Ethical Responsibilities
4. Philanthropic Responsibilities
E. The Pyramid of Corporate Social Responsibility
1. Pyramid as a Unified Whole
3. Ethics Permeates and Global Applications
F. CSR in Practice
2. Rise of CSR Exemplar Firms
II. TRADITIONAL ARGUMENTS AGAINST AND FOR CSR
A. Arguments against CSR
B. Arguments in Support of CSR
C. The Business Case for CSR
III. AGES AND STAGES OF CSR
IV. CSR GREENWASHING
V. POLITICAL CSR
VI. CORPORATE SOCIAL RESPONSIVENESS
VII. CORPORATE SOCIAL PERFORMANCE
VIII. CORPORATE CITIZENSHIP
A. Broad and Narrow Views
B. Stages of Corporate Citizens
C. Global Corporate Citizenship
D. CSR and Corporate Citizenship Awards by Business Media
Ch 2, Instructor’s Manual, Business & Society, Carroll 10e
IX. THE SOCIAL PERFORMANCE AND FINANCIAL PERFORMANCE RELATIONSHIP
A. Three Perspectives on the Social-Financial-Reputation Relationship
1. Perspective 1: Socially responsible firms are more financially profitable.
3. Perspective 3: There is an interactive relationship between and among social
performance, financial performance, and corporate reputation.
X. SUSTAINABILITY—PROFITS, PEOPLE, PLANET
XI. SOCIALLY RESPONSIBLE, SUSTAINABLE, ETHICAL INVESTING
XII. SUMMARY
SUGGESTED ANSWERS TO DISCUSSION QUESTIONS
Students should recognize that their answers to these discussion questions should be well
reasoned and supported with evidence. Although some answers will be more correct than others,
students should be aware that simplistic answers to complex questions, problems, or issues such
as these will never be “good” answers.
1. Question: Explain the Pyramid of Corporate Social Responsibility> Provide several
examples of each “layer” of the pyramid. Identify and discuss some of the tensions among
the layers or components. In what sense do the different layers of the pyramid “overlap”
with each other?
Answer: The Pyramid of Corporate Social Responsibility is a graphic representation of
Carroll’s four-part definition of CSR. According to Carroll, society has four expectations
Ch 2, Instructor’s Manual, Business & Society, Carroll 10e
2. Question: In your view, what is the single strongest argument against the idea of corporate
social responsibility? What is the single strongest argument for corporate social
responsibility? Briefly explain.
Answer: There are few, if any, legitimate arguments against CSR. The closest one could
come to making a logical argument is that corporations should not be required to “fill the
gaps” in social policy. That is, corporations should not be held responsible for providing
3. Question: Differentiate between corporate social responsibility and corporate social
responsiveness. Give an example of each. How does corporate social performance relate
to these terms? Where do corporate citizenship and sustainability fit in?
Ch 2, Instructor’s Manual, Business & Society, Carroll 10e
Answer: Carroll’s four–part definition of corporate social responsibility is “The social
responsibility of business encompasses the economic, legal, ethical, and discretionary
4. Question: Analyze how the triple bottom line and the Pyramid of CSR are similar and
different. Draw a schematic that shows how the two concepts relate to one another.
Answer: The Triple Bottom Line provides results of operations in three inter-related
5. Question: Compare and contrast the socially oriented concepts: CSR, corporate
citizenship, sustainability, creating shared value, and conscious capitalism. Do these
represent different forms of the business and society relationship or do they represent how
and why companies respond in a socially conscious manner?
Answer: Corporate Social Responsibility (CSR) can be boiled down to a company’s
actions and how they affect society. This is a more board concept whereas the others are a
6. Question: Does socially responsible, sustainable, or ethical investing seem to you to be a
legitimate way in which the average citizen might demonstrate her or his concern for
CSR? Why is it also called impact investing? Discuss.
Answer: On the one hand, socially responsible investing seems to send the message that
GROUP ACTIVITY
Have students establish the parameters for a social screen for investments. Specifically, ask
students to identify the criteria for socially responsible investments. Once the class establishes
the “social screen” as a group, divide the students into groups of four to five students.
Each group will be given a theoretical account with $500 to invest in firms that meet the criteria
established by the entire class. Each group should be given a week to research firms for potential
investment. Each group should provide a summary sheet to the instructor allocating the $500
among socially responsible investments that meet the class criteria. Each group should track the
return on their investments through the end of the semester and report the value of their portfolio
at that time. Opportunity should be given to discuss why certain investments were made.
Instructors may want to provide some type of reward for the group with the greatest return on
investment. Groups that select companies that do not meet the class social screen should be
disqualified.
INDIVIDUAL ASSIGNMENT
Have students read the June 14, 2012 Wall Street Journal article entitled “The Case Against
Corporate Social Responsibility,” by Dr. Aneel Karnani (see