#1 rethinking the new philanthropy


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#1 rethinking the new philanthropy

  1. 1. Good Morning<br />
  2. 2. SBMJC-CME<br />PGDM+MBA (2011-13)<br />Email : 8apples.2@gmail.com<br />
  3. 3. Moni Ankita Das<br />Ankur Sharma<br />RakeshKumar Sahoo<br />Yogesh Kumar Singh<br />Bharathkumar G Soni<br />Pankaj Choudhary<br />Tausif Iqbal <br />Twinkle Patel<br />Members in the presentation:<br />
  4. 4. Rethinking the new Corporate Philanthropy<br />Craig M. Sasse, Ryan T. Trahan<br />
  5. 5. Profit making is not the only objective of a business.<br />CSR helps the society in the achievement of their objective.<br />Absorption of CSR by public as well as media.<br />Expansion and compulsion of CSR.<br />CSR as weapon to increase profit.<br />CSR as necessary evil.<br />1. The expanding corporate social responsibility bundle<br />
  6. 6. “ A corporation is a legal entity managed by people who act as agents for the firm’s owners, the shareholders.”<br />-What is the purpose of obligations of the corporation?<br />-What boundaries does the law set in seeking these purposes?<br />2. Legal Obligations of the Corporation<br />
  7. 7. 1811, The New York Legislature approves the Manufacture Act.<br />1856, the world’s then leading economic power, Britain takes lead in the corporation development by passing the Joint Stock Co. Act.<br />London based Muscovy Co., the first Joint Stock Co. (Micklethwait & Woolridge, 2003)<br />2.1 Early History of Corporations<br />
  8. 8. “ My ambition is to employ still more men; to spread the benefits of this industrial system to the greatest number, to help them build up their lives and their homes. To do this, we are putting the greatest share of our profits back into the business.” - Henry Ford.<br />2.2 Dodge v. Ford Motor Company: shareholder primacy (1919)<br />
  9. 9. 2.3 Nexus of contracts and business judgement doctrine<br />Corporation v Open market<br />Decision regarding choice of business organization and extent of participation.<br />Decision regarding allocation of resources and activities within the rules of the game.<br />Subordination of executive interest to profit maximization.<br />
  10. 10. 3. Strategic management: Models for using CSR(3.1) Making social charity a part of business<br />CSR and shareholders’ interest, two sides of a same coin.<br />Importance of CSR<br />Inclusion of CSR in business strategy<br />
  11. 11. Stakeholder theory<br />The theory supports the strategic CSR<br />CSR acts as a shield against negative impacts that the firm may have on stakeholders <br />Reality check: Walsh (2005)<br />CSR and stakeholder theory are closely related<br />3.2 Stakeholder Capitalism<br />
  12. 12. Termination of Berkshire’s Charitable Trust<br />Donation<br />Conflict between the company and its stakeholders<br />Philanthropy or conversion<br />4. Unintended results from corporate philanthropy<br />
  13. 13. Problems regarding quantitative measures<br />Lack of knowledge about competent product and services<br />Lack of decision making<br />4.1 Using corporate resources inefficiently<br />
  14. 14. Drucker in 2001 warned against managerial actions in areas where measurement is difficult and said it takes people out of this area of competence. <br />His suggested measures:<br />Proper measure regarding business additional problem<br />Focus on profit objective<br />Effective utilization of resources on their respective areas<br />
  15. 15. Need for long term profits degrade the importance of charitable programs<br />Non-business goals cannot satisfy the needs of stockholders<br />Too much involvement in CSR activities may lead to reduced aid in the future<br />4.2 Charity at the mercy of market<br />
  16. 16. CSR as public stunt<br />High expectation from CSR<br />More of CSR activities hide the business’s pivotal roles<br />CSR as a weapon to build relationship with Govt.<br />4.3 Tradeoffs when private and public roles are blurred<br />
  17. 17. Increased social problems enhance the importance of CSR<br />Legal dictates and management priorities prevent the organization from getting too much into CSR activities<br />Difficulty in determining the price when there is involvement of social areas<br />Over estimation regarding the benefits of CSR activities may create cynicism instead of goodwill<br />Decision regarding amount of funds for CSR<br />Consideration of stake holders’ interest <br />4.4 Executive decisions on CSR<br />
  18. 18. ~Apple<br />