Disclosure Guidelines and Best Practice

NotesQuizObjective Test

Best Practice

Carroll's Four Part Model

  1. Economic

    The economic responsibility must be achieved in order to attain higher level responsibilities. 

    This is the highest responsibility of the organisation. 

    This relates to the organisation being able to stay in business and therefore provide for its stakeholders. 

    For example, shareholders requiring a return on their investment and employees to be provided with safe, fairly paid jobs and customers being able to obtain good quality products at a fair price.

  2. Legal

    This responsibility implies that an organisation will following the laws of the country that it is in. 

    Not complying with the law results in a lack of social responsibility. 

    For example, anti-competitive behaviour and price fixing by collusion.

  3. Ethical

    This responsibility relates to what is expected by society from organisations, therefore an organisation doing what is right vs only doing what is legal. 

    For example, a company deciding to limit carbon emissions below the legal maximum - so that it can be seen as acting in the interest of society.

  4. Philanthropic

    This relates to the desired actions of organisations rather than those required by organisations. 

    For example, making donations to charities, providing sports facilities to employees and sponsoring a school fair.

Social Responsiveness refers to the capacity of the corporation to respond to social pressure and the manner in which it does so.

Carroll suggests four possible strategies, reaction, defence, accommodation and proaction.

NotesQuizObjective Test