Illustrate Business Ethics, Social Issues, and Responsibility
Less than 20% plagiarism please
As a business professional, assume you have been invited as a guest speaker for the next managerial meeting for your organization. Senior leadership has expressed concerns about corporate social responsibility and how this may influence appropriate ethical business practices.After reading and viewing this weeks required resources, develop a PowerPoint presentation for senior leadership that addresses the following:
Analyze the concept of corporate social responsibility (CSR).
Discuss at least three arguments for CSR.
Discuss at least three arguments against CSR.
Illustrate the differences and similarities between the three CSR strategies: 1) corporate philanthropy, 2) social entrepreneurship, and 3) sustainability.
Provide examples of three corporations or companies that are making a positive social impact. Identify the corporation or business, the product(s) or service(s), the recipients, and the benefits.
Define and explain what business ethics is. Document an example of a breach of business ethics that has occurred and been publicized recently. It can be a major firm or a firm you recently heard or read about in your local community. Unfortunately, examples will not be hard to find.
Summarize the lessons your organization (the one you are making for this presentation) can learn from the elements and examples you have just presented.
Be sure to deliver your presentation in the order presented above and have at least one slide per topic. For example, you probably will have a slide that introduces the topic of CSR strategies, and then have one slide for each of the three strategies.Incorporate appropriate animations, transitions, and graphics as well as speaker notes for each slide. The speaker notes may be comprised of brief paragraphs or bulleted lists and should cite material appropriately. Add audio to each slide using the Media section of the Insert tab in the top menu bar for each slide.Support your assignment with the items in the Books and Resources for this Week. In addition to these specified resources, other appropriate scholarly resources, including seminal articles, should be included.Length: 12-15 slides (with a separate reference slide) Notes Length: 100-150 words for each slideBe sure to include citations for quotations and paraphrases with references in APA format and style where appropriate. Save the file as PPT with the correct course code information.
SAGE Brief Guide to Corporate Social
Responsibility
Strategic Philanthropy
Contributors: By: SAGE Publications
Book Title: SAGE Brief Guide to Corporate Social Responsibility
Chapter Title: “Strategic Philanthropy”
Pub. Date: 2012
Access Date: August 19, 2020
Publishing Company: SAGE Publications, Inc.
City: Thousand Oaks
Print ISBN: 9781412997225
Online ISBN: 9781452243986
DOI: http://dx.doi.org/10.4135/9781452243986.n3
Print pages: 15-22
2012 SAGE Publications, Inc. All Rights Reserved.
This PDF has been generated from SAGE Knowledge. Please note that the pagination of the online
version will vary from the pagination of the print book.
http://dx.doi.org/10.4135/9781452243986.n3
Strategic Philanthropy
Strategic philanthropy
Strategic philanthropy is an approach by which corporate or business giving and other philanthropic
endeavors of a firm are designed in such a way that it best fits with the firm’s overall mission, goals, and
values. This implies that the business has a carefully articulated strategy and that it understands how to
integrate its philanthropic initiatives with this strategy in actual practice. A major characteristic of strategic
philanthropy is that the motivation is not solely altruistic. To understand how strategic philanthropy has
become an everyday practice, it is useful to trace this concept as it has unfolded in business history.
Beginnings of Corporate Philanthropy
The concept of philanthropy evolved through business history even before the broader corporate social
responsibility movement had taken shape. The concept of business responsibility that prevailed in the United
States during most of its history was fashioned after the traditional, or classical, economic model of the firm.
Dominant in the late 1800s and early 1900s, the economic model of the firm thought of the marketplace as the
primary determinant of what business firms did in their communities and in society. The pattern of corporate
philanthropy in Europe and other parts of the Western world paralleled its development in the United States.
Unfortunately, though the marketplace did a reasonably good job in deciding what goods and services should
be produced, it did not fare as well in ensuring that business always acted generously, fairly, and ethically.
In addition, business created many social problems and the view was developing that business had some
responsibility for these social problems that extended beyond just producing goods and services.
Years later, when laws began to be passed constraining business practices, it might be said that a legal model
emerged. Society’s expectations of business changed from being strictly economic in nature to encompassing
issues that previously had been at business’s discretion. Over time, a social model of the firm emerged. What
this social model did, in effect, is embrace both the economic and legal emphases and add yet another layer
of expectations by society that business would assume some role in addressing social problems and issues
that had arisen.
In the late 1800s and early 1900s, initial indications of business’s willingness to contribute to the community
were localized efforts toward meeting community needs through philanthropy, or business giving, and
paternalistic practices. It is evident that businesspeople did engage in philanthropy contributions to charity
and other worthy causeseven during the periods that were dominated by the traditional economic view.
Voluntary activities to improve, beautify, and uplift the community were evident. One very early example of
this was the cooperative efforts between the railroads and the Young Men’s Christian Association immediately
after the Civil War to provide community services in areas affected by the railroads. These initiatives, in
hindsight, can now be seen as early examples of strategic philanthropy, because they benefited both the
communities and the railroads.
The emergence of large corporations during the late 1800s played a major role in hastening the movement
away from the strict classical economic model of the firm in society. As the economy transitioned away from
one dominated by small, powerless companies to large corporations with more concentrated power, questions
of business responsibility began to be raised. By the 1920s, community service had become much more
important for business. The most visible example of this was the Community Chest movement, which received
its impetus from business.
One example of early progressive business ideology was reflected in Andrew Carnegie’s 1889 essay The
Gospel of Wealth. Carnegie asserted that business must pursue profits but that business wealth should also
be used for the benefit of the community. Philanthropy turned out to be one of the best ways in which firms
could benefit the community. A prime example of this was Carnegie’s funding and building of more than 2,500
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libraries for communities.
Corporate philanthropy continued to grow into the 20th century and by the late 20th century had become one
of the institutionalized ways by which businesses could aid communities, the growing number of nonprofit
organizations, and other national and international groups. Today, corporate philanthropy is considered to be
one of the foremost means by which companies fulfill their social responsibilities and come to be regarded as
good corporate citizens.
Philanthropy Defined
Before developing the concept of strategic philanthropy further, it is useful first to examine the concept of
philanthropy itself. The word philanthropy has generally been defined as a concern for or love of humankind.
Philanthropy has been linked to efforts to demonstrate this fondness or concern for humankind through
charitable gifts, aid, or donations. Though most people would not philosophically disagree with the concept
of philanthropy, throughout history some have. Friedrich Nietzsche, for example, objected to it as a concept
of universal good because he thought it represented the weak parasitically living off the strong. Ayn Rand is
another major philosopher who held a similar view. Political views on philanthropy have also been present.
Most governments have been supportive of philanthropic efforts on the part of companies and individuals and
have supported these efforts through tax incentives and tax breaks. Though the term philanthropy seems to
imply some altruistic expression, as in love of humankind, today the concept more nearly refers to the giving
of resources for the benefit of others.
Conceptually, today, philanthropy may be seen as a part of companies’ corporate social responsibility or
corporate citizenship initiatives. Archie Carroll has argued that philanthropy fulfills businesses’ discretionary
responsibilities to be good corporate citizens. These philanthropic activities are voluntary, guided only by
businesses’ desire to engage in social activities that are not mandated, not required by law, and not generally
expected in an ethical sense. Philanthropy is desired/expected in most societies. The public has an
expectation that business will engage in philanthropy, in part because it has become so much a part of
business tradition and in part because many believe it is part of the social contract between business and
society, especially between business and the local community. Others believe business should engage in
philanthropy to partially offset some of the social harm or social problems business has engendered.
By the first decade of the 2000s, philanthropic initiatives include corporate giving, matching programs in
which companies match contributions given by their employees, product and service donations, employee
volunteerism, partnerships with local governments and other organizations, and any other kind of community
involvement on the part of the organization and its employees. These philanthropic initiatives are in response
to ongoing needs in the community in areas such as education, culture and the arts, health/human services,
and civic and community activities. In addition, special needs arise due to emergencies such as the tsunami
in Southeast Asia in 2004 and Hurricanes Katrina and Rita in the United States in 2005.
Strategic Philanthropy Takes Shape and Evolves
The concept of strategic philanthropy has evolved out of traditional forms of business giving. Early on,
corporate giving was more focused on the needs that had arisen in the community and so philanthropy
was more altruistic in naturemore focused on an exclusive consideration of the needs of others. With the
passage of time and the heightened competition and cost pressures that have characterized the business
community in the past several decades, corporate executives have begun looking more carefully at the kinds
of impacts philanthropic efforts might have. It has become evident that business can not only help others but
help itself at the same time, and this germ of thought is what has produced the modern strategic philanthropy
emphasis. At the same time, corporate giving has become institutionalized and professionalized, and as it has
been turned over to professional managers, top management has come to view the giving function as one that
should deliver more specific, direct benefits to the company, and thus, the idea of strategic philanthropy has
been born and cultivated in a business climate that has been more driven by profitability and accountability
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toward the bottom line.
Strategic philanthropy is an approach to business giving that seeks to achieve goals for the community or
recipient of the giving and for the business itself as well. Strategic philanthropy is more focused. It does not
just address any legitimate need in the community but rather focuses on those needs or issues that are
consistent with or aligned with the firm’s overall mission, objectives, programs, or products/services. A classic
example of strategic philanthropy is the Ronald McDonald Houses sponsored by McDonald’s hamburger
chain. The Ronald McDonald Houses are facilities usually built near children’s hospitals to help families who
want to be close to their children who may be receiving longer-term treatment at the hospital. The Ronald
McDonald House Charities maintains more than 200 houses in 44 countries around the world where families
can stay together for free when traveling for a sick child’s treatment and 48 rooms within hospitals for the
same purpose. McDonald’s, which has long viewed children as one of its target markets, thus is able to
generously contribute to children and their families, thus enhancing its own interest or strategy at the same
time. The children and their families win and McDonald’s as a corporation wins. It should be clarified that
McDonald’s, as a company, initiated and sponsors the Ronald McDonald House Charities, but many other
companies also contribute to the charity. In addition, each chapter also relies on individual contributions. In a
sense, then, this is an ideal example of strategic philanthropy in that McDonald’s gets high name recognition
and publicity for the charity, even though the company is just one of the many supporters of the charity.
In using strategic philanthropy, companies strive to align their corporate giving or community relations
initiatives with their own goals, objectives, or markets. The idea is to have a double impacta positive impact
on the recipients of the philanthropy and some kind of positive impact on the businesses’ bottom lines or
strategies. Two other examples are worthy of mention. The first is Novartis’ creation of its nonprofit, Novartis
Research Institute for Tropical Diseases. The nonprofit Institute allows it to focus on the discovery of new
drugs for treating neglected diseases. The company benefits and the victims of neglected diseases benefit.
Second is IBM’s On Demand Community Program. This program permits IBM employees around the world
to share the company’s technology and other resources with the agencies where they sign up for volunteer
service. Both parties benefit.
Strategic management expert Michael Porter has argued that the term strategic philanthropy has begun to
be used to explain virtually any type of charitable giving that has some definable theme, focus, or approach
that builds bridges between the businesses that are giving and needs in the community. Porter has been
critical of strategic philanthropy, arguing that the link between the companies and the charities are often
weak, tenuous, or semantic. He suspects that most of these initiatives really do not have anything at all to
do with corporate strategy but are aimed at achieving positive publicity or goodwill for the companies and for
improving employees’ morale. His belief is that for strategic philanthropy to be viewed as genuine or valid,
it needs to effectively integrate social and economic goals in such a way so as to produce legitimate social
impact in the community. Of course, his criticisms may be broadened to include any corporate citizenship
initiatives on the part of business, not just philanthropy.
Cause-Related Marketing
One of the shapes or variations that strategic philanthropy has taken on is that of cause-related marketing, or
cause marketing. Many critics claim that this is more marketing than philanthropy, but others have held that it
is an extreme form of strategic philanthropy in that the link between the businesses’ interest and some social
or public cause is tightly tied together. In cause marketing, each time a consumer uses a service or buys
a product, a donation is given by the company to the charity. Thus, cause marketing has sometimes been
referred to as quid pro quo philanthropy.
One of the earliest examples of cause-related marketing was in the early 1980s when American Express
Company introduced a program whereby it would contribute 1 cent to the restoration of the Statue of Liberty
each time one of its credit cards was used to make a purchase. This initiative generated $1.7 million for
the restoration of the historical monument and a substantial increase in the use of the company’s cards.
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Today, American Express coordinates its philanthropic and marketing efforts with its community business
program and cause-related-marketing campaign to help small business owners acquire access to the credit
and resources they need to start or grow their businesses. So the company now gives a portion of credit
card charges to three national nonprofit organizations specializing in community economic development when
American Express Community Business Card customers use their cards. Today, many different companies
have linked using their products or services to the amount they would then donate to some worthy charitable
cause.
Just as Porter has been critical of strategic philanthropy, he has especially been critical of cause-related
marketing. He thinks these efforts are more targeted toward improving the companies’ reputations than doing
good in the community and, thus, fail as authentic efforts toward strategic philanthropy. In his view, the best
way to maximize philanthropy’s value is to follow a path that effectively combines pure philanthropy with pure
business in such a way that genuine social and economic values are created.
The Business Case for Strategic Philanthropy
The impetus behind the movement toward strategic philanthropy has been the expectation by CEOs and top
echelon executives that for corporate giving to continue, the business case for it has to be established.
The business case is the argument or rationale as to how the business is specifically benefiting from the
philanthropic endeavors. It is the explication of reasons why business is believed to be benefited by the
philanthropy. One of the leading business groups supporting the idea of strategic philanthropy is Business
for Social Responsibility (BSR), a nonprofit association of firms and executives who support the idea of
integrating business’s social role with its economic objectives. BSR has assembled research that indicates
that companies, through their philanthropic giving, may
increase customer loyalty and enhance brand image,
strengthen employee loyalty and productivity,
enhance corporate reputation, and
expand into emerging markets.
In short, specific business advantages that strengthen the companies’ bottom lines are achievable through
carefully designed philanthropic initiatives.
An interesting aspect of strategic philanthropy is that two firms in the same industry may decide to pursue
divergent philanthropic projects and initiatives while both are focusing on the bottom-line benefits to the
company as well as helping the community. In the home improvement/products industry, for example, The
Home Depot supports sustainable forestry, community impact grants, and volunteerism, while Lowe’s, its
major competitor, supports Habitat for Humanity, sponsorship of American Red Cross disaster relief, and
community college scholarships. Executives in these two firms made strategic choices to engage different
philanthropies but with doubtless similar objectives in terms of strategic impact on the company’s profitability
and reputation.
Since strategic philanthropy is a part of corporate social responsibility initiatives, it follows that these same
benefits accrue due to these efforts. Also, it can readily be seen that most of these reasons are business
related, not philanthropy related. Thus, the business case is strengthened. Finally, it is worth noting that
Paul Godfrey has developed and presented an analysis of literature and research that supports the idea
that (a) corporate philanthropy can generate positive moral capital among stakeholders and communities, (b)
this moral capital can provide business owners with insurance-like protection for a firm’s relationship-based
intangible assets, and (c) this protection contributes to shareholder wealth. Thus, through logic and research,
he has added to the business case for corporate philanthropy, especially strategic philanthropy.
Archie B.Carroll
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Further Readings
Burlingame, D. F., & Young, D. R. (Eds). (1996). Corporate philanthropy at the crossroads. Bloomington:
Indiana University Press.
Business for Social Responsibility. (2005). Issue brief: Philanthropy. Retrieved from http://www.bsr.org
Carroll, A. B., & Buchholtz, A. K. (2006). Business and community stakeholders. In Business and society:
Ethics and stakeholder management (6th ed., pp. 471504). Mason, OH: South-Western.
Epstein, K. (2005). Philanthropy, Inc.: How today’s corporate donors want their gifts to help the bottom line.
Stanford Social Innovation Review, Summer, 2127.
Godfrey, P. C. (2005). The relationship between corporate philanthropy and shareholder wealth: A risk
management perspective. Academy of Management Review, 30(4), 777798.
Logsdon, J., Reiner, M., & Burke, L. (1990). Corporate philanthropy: Strategic responses to the firm’s
stakeholders. Nonprofit and Voluntary Sector Quarterly, 19(2), 93109.
Porter, M. E., & Kramer, M. R. (2002). The competitive advantage of corporate philanthropy. Harvard
Business Review, December, 5768.
Saiia, D. H., Carroll, A. B., & Buchholz, A. K. (2003). Philanthropy as strategy: When corporate charity begins
at home.Business & Society, 42(2), 169201. http://dx.doi.org/10.1177/0007650303042002002
Smith, C. (1996). The new corporate philanthropy. Harvard Business Review, 72(3), 105115.
strategic philanthropy
philanthropy
corporate philanthropy
cause-related marketing
corporate social responsibility
charities
social responsibility
http://dx.doi.org/10.4135/9781452243986.n3
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http://www.bsr.org/
http://dx.doi.org/10.1177/0007650303042002002
http://dx.doi.org/10.4135/9781452243986.n3
SAGE Brief Guide to Corporate Social Responsibility
Strategic Philanthropy
Strategic Philanthropy
Beginnings of Corporate Philanthropy
Philanthropy Defined
Strategic Philanthropy Takes Shape and Evolves
Cause-Related Marketing
The Business Case for Strategic Philanthropy
Further Readings skip to main content
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Section 3: Entrepreneurship, Innovation, Ethics, and Social Responsibility
Week 6
Books and Resources for this Week
Delmas, M. (Academic). (2016). Business and the environment [Video file].
Delmas, M. (Academic). (2016). Business and the environment [Video file].
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Last Visited Aug 19, 2020 7:58 PM 258Governance Directions June 2018
Trends & special topics Trends & special topics
Ethics: Why it starts at the top in business
by DR MARK HARVEY Corporate Management Consultant, Vaxa Group
There has been a lot of talk about ethics around Australia recently. In this article the author
looks at what ethics are and why establishing your firms ethical base starts at the top.
Ethics is a word which has received a lot of attention in Australia in the past couple of months as media
coverage of our sporting stars and financial institutions equally have many asking: where have ethics
gone?
A clue may be that as a society, we seem to accept the need for people to be trained in some things and
not others. In the corporate world and the Public Sector, we send people to training so they can
understand their leadership style or even their own personality.
As a society, we also seem to recognise the need for people in specific roles to be trained in specific
skills.
And yet despite this, we continue to view workplace training to combat misconduct and encourage
Research shows that misconduct within the workplace can be avoided when staff are taught and
practise how to respond to pressure to behave unethically.
Leaders can adopt strategies to address misconduct, encourage professionalism and avoid the brand
damage that comes from poor corporate and employee behaviour.
This article provides five steps companies can undertake to instil misconduct resistance among staff.
professionalism, as something which is not considered worthy of hands-on, tailored training.
Is it that we have become so accustomed to cookie-cutter, one-size-fits-all, ineffective ethics training
sessions that we think this is the only way to do it? And is the perception in business that ethics training is
sadly a waste of time?
Ethics: What it means
According to Australian non-profit The Ethics Centre, ethics are at the core of everyday life: Ethical
beliefs shape the way we live what we do, what we make and the world we create through our
choices.
We ask ethical questions whenever we think about how we should act. Being ethical is a part of what
defines us as human beings. We are rational, thinking, choosing creatures. We all have the capacity
to make conscious choices although we often act out of habit or in line with the views of the crowd.
We could all make conscious and conscientious ethical choices if we wanted to.
Embracing practical, scenario-based, interactive training which is relevant to the workplace has been
proven to provide employees with the necessary skills to address misconduct and encourage
professional workplace conduct.
Workplace research has shown time and again that misconduct within the workplace can be avoided
when staff are taught and practise how to respond to pressure to behave unethically. This training and
practice, to be effective, must include guidance in understanding the reasons and rationalisations
colleagues and superiors may have to justify their own poor behaviour or inappropriate behaviour they
expect of employees.
Commensurately, if we train our leaders to understand and value the competitive advantage which results
from skilling and encouraging leaders and employees to embrace good governance, they will also
understand the brand damage which can result from misconduct.
Advertisement
The business case for ethics: If you need one
Unethical conduct is a critical risk to any business because it damages the trust of clients and partners
while also reducing efficiency and productivity.
It can also lead to reduced profits and a reduction in employee and customer engagement, including the
crucial ability to recruit the best candidate and so position an organisation for the future to reflect the
diversity of the customer base.
There are several strategies leaders can use to address misconduct, encourage professionalism and
259
Trends & special topics
professionalism, as something which is not considered worthy of hands-on, tailored training.
Is it that we have become so accustomed to cookie-cutter, one-size-fits-all, ineffective ethics training
sessions that we think this is the only way to do it? And is the perception in business that ethics training is
sadly a waste of time?
Ethics: What it means
According to Australian non-profit The Ethics Centre, ethics are at the core of everyday life: Ethical
beliefs shape the way we live what we do, what we make and the world we create through our
choices.
We ask ethical questions whenever we think about how we should act. Being ethical is a part of what
defines us as human beings. We are rational, thinking, choosing creatures. We all have the capacity
to make conscious choices although we often act out of habit or in line with the views of the crowd.
We could all make conscious and conscientious ethical choices if we wanted to.
Embracing practical, scenario-based, interactive training which is relevant to the workplace has been
proven to provide employees with the necessary skills to address misconduct and encourage
professional workplace conduct.
Workplace research has shown time and again that misconduct within the workplace can be avoided
when staff are taught and practise how to respond to pressure to behave unethically. This training and
practice, to be effective, must include guidance in understanding the reasons and rationalisations
colleagues and superiors may have to justify their own poor behaviour or inappropriate behaviour they
expect of employees.
Commensurately, if we train our leaders to understand and value the competitive advantage which results
from skilling and encouraging leaders and employees to embrace good governance, they will also
understand the brand damage which can result from misconduct.
Advertisement
The business case for ethics: If you need one
Unethical conduct is a critical risk to any business because it damages the trust of clients and partners
while also reducing efficiency and productivity.
It can also lead to reduced profits and a reduction in employee and customer engagement, including the
crucial ability to recruit the best candidate and so position an organisation for the future to reflect the
diversity of the customer base.
There are several strategies leaders can use to address misconduct, encourage professionalism and
260Governance Directions June 2018
avoid the brand damage that comes from poor corporate and employee behaviour.
This begins with understanding those you lead in an organisation, training and skilling company leaders
to embrace positive conduct and avoid misconduct, and importantly driving proactive and reactive
measures to assure good governance and a misconduct-resistant organisation.
Understanding your workforce means identifying what motivates your staff and what opportunities those
motivators represent.
This calls for a mind shift; we tend to think only in terms of financial reward whereas research consistently
shows there is a lot more to employee motivation including the desire to help the community and be
proud of the products and services a company offers.
It also means being keenly aware at all times of the behaviours being modelled for staff by senior
leaders.
While whole sectors can be tarred with the same brush once leaders in any particular profession
