Government is also interested in socially responsible actions of companies and provides some convenience in terms of legal issues, like taxes or financing, to ethical and socially responsible companies.
Corporations are considered as powerful social actors, who must use their power as well as their resources in a responsible manner in the society. Corporations are deeply rooted in the society and hence have the responsibility to consider the interests and goals of the society. They create impact on the society for which they are liable and cannot escape responsibility. Carroll (1991) explains his “Four Part Model of Corporate Social Responsibility” which focuses on the types of social responsibilities which a business has. As per Carroll (1991), CSR is a multi-layered concept that comprises of economic (i.e. to be profitable), legal (i.e. to obey the law), ethical (i.e. being ethical in operations) and philanthropic responsibilities (which pertains to being a good corporate citizen). These are not isolated, but interrelated activities. He further represents these responsibilities as various layers of the pyramid (known as The Pyramid of Corporate Social Responsibility) and summarizes that true social responsibility calls for the meeting of all four levels in a consecutive manner. The primary benefit of Carroll’s model is that, it helps to provide a structure of social responsibilities in various dimensions. However, it does not provide an explanation for social responsibility in case of pressure on the corporation to be both profitable and ethical. It is equally important to consider the manner in which corporations respond to various social problems and expectations.