The Levels of Corporate Social Responsibility

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  • 0:01 Corporate Social…
  • 0:54 Level One: Economic…
  • 1:43 Level Two: Legal…
  • 2:26 Level Three: Ethical…
  • 3:14 Level Four:…
  • 3:53 Lesson Summary
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Lesson Transcript
Instructor: Jennifer Lombardo
Most companies do not start as socially-responsible companies. In fact, the path to embracing corporate social responsibility consists of four different levels that companies progress through that will benefit their stakeholders.

Corporate Social Responsibility

And the winner of the most socially-responsible company in the world is… Pear Products. Pear Products is a global manufacturer and retailer for products, such as tablets, laptops, desktops and smartphones. Should Pear Products be excited about this honor? Yes! Companies need to gain customer respect, differentiate themselves from the competition and nurture their stakeholder relationships. This is accomplished by companies through the adaptation of corporate social responsibility (CSR), which is the use of a business's resources to help solve social problems and achieve social goals.

In this lesson, you will learn the levels of corporate social responsibility through the case study of Pear Products. Let's see how Pear Products began the journey.

Level One: Economic Responsibility

Pear Products was not always known for stellar socially-responsible programs. In fact, the early years found the company struggling to just survive. The first level of corporate social responsibility begins with economic responsibility, which focuses on a company's obligation to fulfill consumers' needs with products and services.

In addition, a company has a duty to provide the goods and services at a fair price and produce a profit. Pear Products' initial foray into the technology industry was a difficult one, as many consumers did not trust their proprietary operating systems and futuristic-looking products. The company could not be tasked with helping society when they could barely help themselves make a profit.

Level Two: Legal Responsibility

The next step of CSR focuses on legal responsibility in which Pear Products is expected by customers, society and the government to adhere to national and state competitive, taxation and employment laws. Pear Products was slowly able to initiate sales their first few years as consumers grew to love the quality and innovation of their products. At times, the company faced challenges in abiding by legal responsibilities, but in order to remain ethical, they knew it was expected. For example, the company never used factories with child labor, did not offer deceptive products and practiced fair hiring of employees.

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