Three Models of Corporate Social Responsibility

Three models of Corporate Social Responsibility:

Economic model: A company's primary duty is to preserve its economic model. According to this model, a company requires being primarily concerned with making a profit. If a company does not make a profit, it won't be able to endure, and stakeholders will be affected. Any philanthropic activity done by the company is considered as stealing from shareholders wealth.

Stakeholders model: It states that a company is obliged to perform a duty to a comprehensive group of stakeholders, other than only the shareholders. A stakeholder is defined as any group which can affect or can be affected by the actions of a business. It includes employees, customers, suppliers, creditors, government and even the broader community and rivals.  In addition to earning a profit, this model includes consideration of the effect on significant stakeholders when making a decision.

Philanthropic Model:  This model says a company can give back to its community through monetary and non-monetary donations such as time, expertise and tangible goods like medicine, food, etc. Companies can contribute to charities and nonprofits by giving straight from the company's cash or resources, fundraising through its employees and others. If a company can satisfy its principal responsibilities, it can do philanthropic responsibilities.

For Wal-Mart's social responsibility, I want to opt for the economic model. The company is definitely following the definition of Economic Model. The company is making a vast amount of value for the stakeholders. They are cost cutting through various ways like adopting almost no health benefits for the employees, involving child labors, employing illegals, etc. They go after small communities to capture the market without thinking of its effects upon local community-based businesses. They do not care if their act is ruthless or not as long as they are making money. In this way, they are doing nothing but fulfilling their core duty that is maximizing the profit of the shareholders.

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