Models of Responsible Business in a Social Context
Various attempts are being made to model the concept of CSR in order to facilitate the practical implementation of its theoretical assumptions. One of the models assuming moral values first, and only then social and economic, is the before profit obligation model developed by Kang and Wood (1995). In this model, the key element is the moral responsibility of individual people (owners, employees, customers, and other stakeholders) in terms of ethical behavior and choices. They should all be guided by ethical and social norms generally applicable in a given economic system. At the second organizational level, only companies that meet social expectations of a moral nature and are practically feasible (taking into account the needs and expectations of stakeholders) deserve to function. Only the last level shows the economic aspect of the organization - if an economic entity contributes to the preservation and strengthening of social and economic order (implemented at the above-mentioned levels), then it has the right to generate income and profit.
A very interesting model approach to social responsibility was created by Davis (1975). This model contains five suggestions on how enterprises should behave in order to realistically implement the concept of responsible business in their activities and at the same time effectively take actions that bring economic, ethical, and ecological benefits to the whole society. Davis mainly indicates that social responsibility must always take into account the elements of impact on the whole society, that is, all stakeholders and the organization should implement this in two directions, creating an open system. When making key decisions related to launching production or services, social benefits and costs must always be analyzed in a wide scope and at least in part they should be borne by the consumers (clients) themselves.
It is also important that in addition to the basic scope of activity, every economic operator must engage in additional activities if it wants to be considered a responsible company. All proposals presented by Davis (1975) in the above model are connected to some extent. Due to the fact that enterprises have a very strong impact on the environment or employment structure, they should carefully analyze social expectations and contribute to raising the level of social well-being.
Due to the need for enterprises to design and implement social input strategies, models have also been created that determine socially responsible behavior of business entities.
The most common proposals in this area include models of Wartick and Cochran (1985) as well as Wood (1991). The first model assumes focusing on the company’s social contract as a “good citizen” and identifying the social problems that arise, analyzing them and preventing them from arising. The organization should also minimize unexpected activities and create social policy with the highest efficiency, mainly at the economic entity level.
In turn, Wood (1991) in his model assumes implementation of the principles of social responsibility at the individual level (ethical decisions of the manager), organizational level (responsibility toward stakeholders), and the institutional level, that is, legal obligations and sanctions. He proposes to achieve social influence in the area of the organization’s operation, to create social programs in cooperation with all stakeholders, and to integrate the developed social policy system with the strategy of the entire organization.
In the case of the rules proposed in both models, we can see clear differences. The Carroll pyramid was used in the Wartick and Cochran (1985) model - the authors of the model treated this model as principles and also recognized that the economic issue is fundamental, and only then the economic entity should strive to achieve other aspects of its activity. In implementing these principles, owners should be guided by the philosophy of the organization and remember to fulfill the role of a “good citizen.” In turn, Wood (1991) indicates that the organization should be guided by three key principles, except that the first one applies to individuals making decisions and actions, which are treated as its moral agents and at the same time affecting the whole society (Karpacz, 2017).
At the level of social reaction processes itself, some similarities can be seen in these models. They assume that management on behalf of stakeholders, taking into account their needs and expectations, should be oriented toward shaping a social policy adequate to changes in the environment, and the ability to predict and prevent emerging social problems. In addition, Wood (1991) also indicates aspects of the assessment and monitoring of the state of the environment in his model that takes into account the environmental conditions of the organization.
It seems that it is worth mentioning the 3C-SR model developed by Meehan et al. (2006). It consists of three key elements, into which the authors include the so-called social sources (SR):
- • Ethical and social commitments of the enterprise (commitments).
- • Relations with business stakeholders forming a network of values (connections).
- • Timeless consistency in confidence building (consistency).
"Die basic assumption of this model is fulfillment by the enterprise of all three elements called social sources. Obligations mean formal provisions that will be binding in the organization (ethical codes or accepted standards), and in this way, they will create the image of a socially responsible enterprise, with the assumption of compliance and respect, of course. In turn, relationships relate to the need to build effective business connections with all of the company’s stakeholders, that is, employees, clients, contractors, and suppliers, by developing common social or economic solutions. In connection with these activities, consistency in their planning, implementation, and improvement is very important; this is exactly what confirms the credibility of undertaken activities and submitted declarations (Meehan et al., 2006).
The LBG - the London Benchmarking Group model — is one of the most proven management methodologies in the world of management, measuring and reporting the effectiveness of corporate social involvement. On February 9, 2011, the official inauguration of the LBG Polska network took place. The LBG methodology was developed in 1994 in the United Kingdom on the initiative of the Corporate Citizenship consultancy organization in cooperation with a group of companies that wanted to have access to a practical approach and tools to increase the efficiency of managing business social activities (LBG Guidance manual, 2014).
Globally, this model is currently used by over 300 companies, among others Vodafone, Unilever, Adidas, Coca-Cola, Heineken, GSK, 3M, Deloitte, PwC, IBM, Intel, Toyota, Skanska, Aviva, Axa, and many more. All these companies recognize the benefits of implementing this model to the full extent. The LBG model allows an accurate and comprehensive calculation of the value of the overall social commitment of the organization, thus expressing in monetary terms the total costs that the company incurs in connection with the implementation of socially responsible activities (LBG Guidance manual, 2014).