Applying Archie Carroll's pyramid of corporate social responsibility, when a firm closes due to financial mismanagement and bankruptcy, it has not met its ______.
A)economic responsibility
B)legal responsibility
C)ethical responsibility
D)discretionary responsibility

Question

Quizplus · Accepted Answer

The pyramid of corporate social responsibility, developed by Archie Carroll, suggests that firms have four responsibilities: economic, legal, ethical, and discretionary. Economic responsibility is the most basic, and is met when a firm is profitable and generates wealth for its stakeholders. If a firm closes due to financial mismanagement and bankruptcy, it has failed to meet this economic responsibility. Legal responsibility is the second level of the pyramid and involves following the laws and regulations that govern business activities. While a firm may face legal consequences for financial mismanagement, bankruptcy itself is not necessarily a result of violating laws or regulations. Ethical responsibility is the third level and involves behaving in a morally responsible way, beyond mere compliance with legal requirements. While financial mismanagement may be considered unethical, its contribution to bankruptcy is primarily related to economic responsibility. Finally, discretionary responsibility is the highest level and involves voluntarily taking actions that benefit society or the environment, beyond what is required by law or expected by stakeholders.

Applying Archie Carroll's Pyramid of Corporate Social Responsibility, When a Firm