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ACCA Strategic Professional · Strategic Business Leader · Stakeholder analysis and organisational social responsibility

Kestrel Retail sets up a charitable foundation that funds school libraries in the regions where it trades. The chairman says the aim is simply to be a good corporate citizen. Shareholders ask where this sits in Carroll's pyramid and how it ranks. Which statement is correct?

Funding school libraries is philanthropic responsibility, the top layer of Carroll's pyramid. It is discretionary and desired by society rather than expected as a moral or legal obligation, so a firm failing to do it is not considered unethical, unlike failing at the lower layers.

  1. AIt is philanthropic responsibility, desired by society but not expected as a moral norm, and sits at the top of the pyramidCorrect
  2. BIt is ethical responsibility, because society expects every company to fund education
  3. CIt is legal responsibility, because charitable giving attracts tax relief
  4. DIt is economic responsibility, because the foundation must be profitable to continue

Explanation

Philanthropy, the top layer, is discretionary contributions to community welfare. Society desires but does not require it, unlike the ethical layer, which is expected. Tax relief does not make giving a legal duty.

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