This document provides a summary of an internship report examining the impact of anchoring on charitable contributions and corporate social responsibility (CSR) spending. The report is divided into three parts: 1) an overview of CSR including benefits to firms, 2) a literature review on anchoring effects showing their robust influence on judgments, and 3) a description of two experiments conducted that confirm charitable donations and CSR spending are contaminated by anchors. The internship aimed to study how anchoring may impact companies meeting the minimum 2% CSR spending limit imposed by Indian law.
The document outlines recommendations to address issues with the Project Aerial case study. It proposes establishing an Advanced Technology Council and coaching for Emma to improve decision making. Cross-functional teams would be created and a new meeting structure implemented with a focus on building communities, leadership skills, and transparent decision making. A timeline roadmap outlines hiring coaches and project managers before implementing the recommendations.
BUS 890: Culminating Experience in Strategic Management, FALL 2010
The culminating project is an in-depth case analysis of Suntech Power Holdings Co., Ltd. The analysis includes multiple concepts from the course to help explain the strategies, actions and performance of the company.
The panel discussion on sustainability making business sense saw industry leaders discuss how sustainability has moved beyond compliance and is now essential for business success. Key points included:
1) Companies need to refine their core purpose to ensure it is not in conflict with environmental protection. This requires a mindset shift towards more transparency.
2) Sustainability is no longer a choice but a requirement as consumers, employees, and investors increasingly demand responsible practices.
3) Capital is moving towards more sustainable companies, with actions by pension funds and investors influencing stock prices of hard-to-abate industries. Collaborative global action is also increasing pressure on companies to integrate sustainability across R&D, supply chains, and operations.
This document discusses the challenges of managing large-scale organizational change at Simmons. It explores problems like lack of vision and units competing. Culture, quality, and economic shocks are driving needed changes. The implementation of the Great Game of Life program aims to improve communication, build trust through teamwork, and resolve issues to realize staff potential. CEO Eitel made decisions like investing in new mattresses that increased sales 25%. The GGOL uses phases to encourage participation, establish trust, identify disparities, and solve problems as the company adapts.
IBM is facing declining performance in its growth markets, with revenue from this segment declining 9%. Revenue from China accounted for almost half the decline as IBM missed its revenue expectations by $1 billion. The Systems and Technology segment generating $3.2 billion in revenue, down 17% from 2012, with much of the hardware decline coming from China as the government waited for new economic policies. However, investors should still trust IBM management and business model as the company has ambitious goals and a clear roadmap to achieving $20 EPS by 2015 through strategic initiatives focusing on growth areas like cloud, analytics, smarter planet, and business transformation.
The document lists the names of five individuals: M.Ridwan, Machadi Dhana, M. Khadafi, Pedro Putu Wirya, and Seto Kusparyanti. It also lists the name Yuliani Dewi.
The document discusses responsible investing (RI), which considers environmental, social and governance factors in investment decisions. It provides background on stockholders and their objectives to generate returns. RI aims to achieve social or ethical objectives in addition to financial returns. The document outlines the history and typical processes of RI funds, including commonly used screens to identify companies aligned with environmental and social values. It also discusses indices used to measure RI performance and findings that RI funds do not typically outperform or underperform conventional funds.
This presentation provides an overview of e-waste management strategies. It defines e-waste as discarded electrical and electronic equipment, which is one of the fastest growing waste streams. E-waste contains hazardous materials like lead, cadmium, and mercury, which can damage human health and pollute the environment if not properly managed. The presentation outlines guidelines for proper e-waste collection, sorting, transportation, and recycling to reduce environmental and health impacts. It also discusses the roles and responsibilities of industries, citizens, and governments in promoting sustainable e-waste management.
The document outlines recommendations to address issues with the Project Aerial case study. It proposes establishing an Advanced Technology Council and coaching for Emma to improve decision making. Cross-functional teams would be created and a new meeting structure implemented with a focus on building communities, leadership skills, and transparent decision making. A timeline roadmap outlines hiring coaches and project managers before implementing the recommendations.
BUS 890: Culminating Experience in Strategic Management, FALL 2010
The culminating project is an in-depth case analysis of Suntech Power Holdings Co., Ltd. The analysis includes multiple concepts from the course to help explain the strategies, actions and performance of the company.
The panel discussion on sustainability making business sense saw industry leaders discuss how sustainability has moved beyond compliance and is now essential for business success. Key points included:
1) Companies need to refine their core purpose to ensure it is not in conflict with environmental protection. This requires a mindset shift towards more transparency.
2) Sustainability is no longer a choice but a requirement as consumers, employees, and investors increasingly demand responsible practices.
3) Capital is moving towards more sustainable companies, with actions by pension funds and investors influencing stock prices of hard-to-abate industries. Collaborative global action is also increasing pressure on companies to integrate sustainability across R&D, supply chains, and operations.
This document discusses the challenges of managing large-scale organizational change at Simmons. It explores problems like lack of vision and units competing. Culture, quality, and economic shocks are driving needed changes. The implementation of the Great Game of Life program aims to improve communication, build trust through teamwork, and resolve issues to realize staff potential. CEO Eitel made decisions like investing in new mattresses that increased sales 25%. The GGOL uses phases to encourage participation, establish trust, identify disparities, and solve problems as the company adapts.
IBM is facing declining performance in its growth markets, with revenue from this segment declining 9%. Revenue from China accounted for almost half the decline as IBM missed its revenue expectations by $1 billion. The Systems and Technology segment generating $3.2 billion in revenue, down 17% from 2012, with much of the hardware decline coming from China as the government waited for new economic policies. However, investors should still trust IBM management and business model as the company has ambitious goals and a clear roadmap to achieving $20 EPS by 2015 through strategic initiatives focusing on growth areas like cloud, analytics, smarter planet, and business transformation.
The document lists the names of five individuals: M.Ridwan, Machadi Dhana, M. Khadafi, Pedro Putu Wirya, and Seto Kusparyanti. It also lists the name Yuliani Dewi.
The document discusses responsible investing (RI), which considers environmental, social and governance factors in investment decisions. It provides background on stockholders and their objectives to generate returns. RI aims to achieve social or ethical objectives in addition to financial returns. The document outlines the history and typical processes of RI funds, including commonly used screens to identify companies aligned with environmental and social values. It also discusses indices used to measure RI performance and findings that RI funds do not typically outperform or underperform conventional funds.
This presentation provides an overview of e-waste management strategies. It defines e-waste as discarded electrical and electronic equipment, which is one of the fastest growing waste streams. E-waste contains hazardous materials like lead, cadmium, and mercury, which can damage human health and pollute the environment if not properly managed. The presentation outlines guidelines for proper e-waste collection, sorting, transportation, and recycling to reduce environmental and health impacts. It also discusses the roles and responsibilities of industries, citizens, and governments in promoting sustainable e-waste management.
IBM Strategy and Values: (1) Focus on open technologies and high- value solutions, (2) Deliver integration and innovation to clients, (3) Become the premier Globally Integrated Enterprise.
HP is a large multinational technology company headquartered in Palo Alto, California. It was founded in 1939 by Bill Hewlett and Dave Packard in a Palo Alto garage. Today it employs over 349,000 people worldwide and has a presence in over 170 countries. HP is a leader in printers and PCs and also provides servers, storage, networking and cloud computing services.
IBM was founded in 1911 and emerged as a superpower by the 1950s, but faced structural problems in the early 1990s that led to $16 billion in losses. Lou Gerstner was hired in 1993 to rescue IBM. He took several steps, including layoffs of 40,000-50,000 employees, cost reductions of $6.8 billion through expense cuts and selling non-core businesses. Gerstner also restored line manager accountability, reorganized IBM into one global organization, refined sales processes, and focused on services as hardware stagnated. These strategies secured IBM's core competencies, provided an outside perspective to address real problems, and dismantled a collegial culture, driving financial results. However,
As managing ESG and sustainability issues have become mainstream business practice, there is no doubt in the minds of corporate leaders that ESG/sustainability issues should be a top priority agenda in boardrooms. However, it is still challenging to integrate ESG/sustainability considerations fully into business practices due to the difference between short-term financial goals and longer-term ESG/sustainability performance. Thus, top executives usually give weight to the shorter-term financial metrics when trade-offs between financial and ESG/sustainability performance come into focus. How can companies achieve short-term profits and ESG/sustainability goals at the same time?
Agenda
ESG/Sustainability Imperative v. Conundrum
Stakeholder Capitalism v. Purpose
Sustainable Economic GrowthValue Innovation for Sustainable Economic Growth
Business Model Innovation for Profitable and Sustainable Business
Sustainability Balanced Scorecard for TBL
Industry/Business Specific Cases
AIC Systems is a Taiwanese electronics manufacturer that began producing printed circuit boards and has expanded into consumer electronics. They were facing problems with low productivity on their netbook assembly lines due to inconsistent operations, bottlenecks, and a spike in production demands. To address this, they implemented several solutions including adopting a batch manufacturing process with gravity feed shelves to reduce re-stocking times, assigning dedicated floaters to each line, and improving material, machine, and capital productivity metrics to better utilize existing resources and boost output.
The document summarizes IBM's leadership and changes under three CEOs from the early 1990s to present:
1) Louis Gerstner transformed IBM's organizational structure in the 1990s from mechanistic to organic and customer-centric, removed bureaucracy, centralized product development, and focused on market trends over internal rules.
2) Under Sam Palmisano from 2004-2011, IBM decentralized power and had thousands of leaders work collaboratively globally. ValuesJam encouraged independent thought among employees.
3) Virginia Rometty since 2011 has enhanced growth markets, bolstered services, and outsourced jobs to India, while acquiring Green Hat for $20 billion with no change in strategy.
This document summarizes the key differences between Vitality Health's previous performance management systems: PMET 1 and PMET 2. PMET 1 aimed to identify low performers using 13 rating categories but resulted in homogeneous ratings. PMET 2 aimed to retain top performers using 5 rating categories but still had a small number of top performers. The document also outlines issues with both systems and recommends changes Hoffman should make, including introducing mid-year reviews, evaluating performance based on KPI achievements, dividing criteria into business and strategic categories, and allowing for employee self-ratings.
Dell's Corporate Social Responsibility RecommendationsErica Swallow
As a final presentation at Professor Aline Wolff's Organizational Communications course at NYU Stern, Jacob Aryeh, Robert Gee, Dhruva Kaul, Diana Shen and Erica Swallow presented their recommendations for Dell's Corporate Social Responsibility initiatives.
Their vision for Dell's Corporate Social Responsibility was to partner with customers to focus on strategic CSR initiatives and align these initiatives with Dell's business strategy, allowing the company to obtain a competitive edge and regain market share.
1) The document describes Interpretive Structural Modeling (ISM), which is used to identify and summarize relationships among variables that define a problem or issue. 2) The objective of ISM is to identify and rank variables, establish relationships among them, and discuss managerial implications. 3) The ISM methodology involves listing variables, developing a Structural Self-Interaction Matrix, a Reachability Matrix, partitioning the matrices into levels, and forming a hierarchy of variables.
This document discusses electronic waste (e-waste), its sources and characteristics. It notes that e-waste is the fastest growing waste stream and is composed of both valuable and hazardous materials. The document outlines the Indian e-waste scenario, noting that e-waste generation is expected to significantly increase by 2020 and that most e-waste management is currently unorganized. It concludes by stressing the need for a national e-waste policy and framework in India to properly manage increasing e-waste in an environmentally sound manner.
General electric medical systems, 2002Sahil Chopra
This document provides an overview of healthcare systems and medical equipment companies globally. It then focuses on General Electric Medical Systems (GEMS):
- GEMS is a $8 billion division of GE and the largest medical equipment company with 50% market share. It grows around 16% annually.
- 60% of GEMS' revenue comes from equipment sales and 40% from services. It spends 7-9% of sales on R&D and has an operating margin of 18%.
- The document also discusses various models of international organization structures and the characteristics of multinational, global, international, and transnational companies.
Environgard Corporation, a manufacturer of air pollution equipment, needs $34 million to develop new equipment and remodel existing products. It is considering raising this capital through common stock, bonds, or preferred stock. The document analyzes the financial impact of each option using various metrics like earnings per share, debt ratio, times interest earned coverage, and fixed charge coverage. It finds that bond financing provides the highest EPS of $2.91 per share, while maintaining debt ratios and coverage metrics close to or above industry averages. Overall, bond financing appears to be the best option to maximize the company's stock price.
- Major spinoff of GE's business portfolio and geographic redistribution of focus and resources is required. Divesting the insurance and consumer/industrial businesses and focusing on energy, healthcare, and consumer finance in markets like China, India, Brazil and South Africa is recommended.
- Investing in alternative energy in India and the healthcare sector in China presents good opportunities due to high growth. Porter's 5 forces analysis shows the alternative energy sector in India has low competition and high profitability.
- Strategic initiatives around quality, green technology, innovation, and customer focus can help strengthen GE's core competencies within its businesses.
1. Founded in 1968, Intel Corporation began as a microprocessor company and later entered the DRAM business in the 1980s. However, Intel exited from DRAM production in the 1990s due to high costs and increasing competition from Japanese manufacturers.
2. Intel adapted to changes in the semiconductor industry and the rise of personal computers and the Internet. Under Andy Grove's leadership, Intel shifted its focus to microprocessors and worked closely with customers and suppliers.
3. Factors contributing to Intel's success included large investments in research and development, manufacturing technology, and developing relationships within the semiconductor industry cluster in Silicon Valley. Upgrading technology and gaining competitive advantages through proprietary standards also helped Intel sustain its leadership in microprocessors
GE case study two decade transformation Jack Welch's LeadershipAnkush Goel
Jack Welch transformed GE over two decades through relentless restructuring, acquiring and divesting businesses, and developing a culture of continuous improvement. Under his leadership, GE became one of the world's most diversified and profitable companies, with annual shareholder returns of 23%. Welch instituted a "fix, sell, or close" policy for businesses and cut layers of management. He globalized operations significantly and placed strong emphasis on developing leaders and continuous improvement efforts like Six Sigma. By the time of his retirement, GE had become a global industrial powerhouse focused increasingly on services in addition to products.
RSH, an investment banking firm, needs to replace its top semiconductor analyst Peter Thompson who resigned. Stephen Connor must decide whether to promote Peter's junior analyst Rina Shea internally or hire an outside candidate. Several candidates are considered including Gerald Baum, David Hughes, Sonia Meetha, Seth Horkum, and Rina Shea. Each candidate is evaluated based on their experience, skills, reputation, and fit with RSH's culture.
Alex Zolotorevskiy Strategic Planning Analysis of Embraer Masters ThesisAlex "Z" Zolotorevskiy
Embraer is the third largest aircraft manufacturer in the world. This document analyzes Embraer's strategic planning across its four divisions: business aviation, commercial aviation, agricultural aviation, and defense/security. The analysis examines Embraer's mission/vision, corporate social responsibility, external/internal environments using models like PESTE, Porter's Five Forces, SWOT, and financial performance using ratios. Overall, the study finds Embraer has a strong mission/vision and CSR policies. It enjoys financial health and leadership in regional jets. Embraer should continue expanding its businesses and pursue developing its defense/security division and entry into the space industry.
Greg James at Sun Microsystems, Inc. (A)
Greg James, a global manager at Sun Microsystems
To resolve a serious customer system outage as required by a service agreement
Sets out to meet with his entire member in customer implementation team spread across India, France, UAE, and US
Rather than finding a immediate solution to the rapidly escalating customer situation that motivated his trip, he finds himself facing distributed work.
Interpersonal Conflict and management issues in global collaboration are threatening to unravel his team.
Greg James at Sun Microsystems, Inc. (B)
This case updates the steps Greg James took to solve the problems that instigated the crisis.
Greg James solves the problems involved in his team's breakdown and creates team cohesion to help them function together effectively.
VERGE 22: Electrifying Charging Solutions and the Need for InnovationGreenBiz Group
This document discusses the need for innovation in electric vehicle charging solutions. It highlights that while the EV market is growing rapidly, infrastructure is lagging behind and current chargers rely too heavily on centralized networks, making them unreliable. Several companies are working on solutions like distributed networks and self-reliant protocols to increase reliability. Workforce training is also needed to properly maintain charging infrastructure and ensure high uptime.
The document summarizes the career crisis of Thomas Green, a senior market specialist, due to office politics at his company Dynamic Displays. It describes how Green was promoted quickly but struggled to adapt to his new managerial role. His independent work style and challenges to his boss Frank Davis's forecasts created conflicts. Davis came to perceive Green negatively and tried to get him fired. The document also analyzes the personalities and behaviors of Davis, Green, and their boss Shannon McDonald that contributed to the political situation. It concludes with suggested actions for Green like self-evaluation and understanding others' perspectives to improve his working relationships.
Term Paper: Towards a Definition of Organizational SustainabilityAntony Upward
This term paper for York University Master of Environmental Studies course ES/ENVS5150 Perspectives on Green Business (Fall 2010, Prof. Brian Milani) develops a working definition of organizational sustainability and explores the implications for the reporting of organizational performance.
This paper got a positive review from Prof. Milani who said the paper was "interesting and thoughtful".
Corporate Social Responsibility and Profitability in the Banking Sector: The ...Dr. Amarjeet Singh
In this article, we explore the relationship between corporate social responsibility and profitability with particular reference to Ethiopian financial industry. In line with this, the paper investigated the practice of corporate social responsibility and its impact on profitability in two private banks in Ethiopia. The study used two sampling phases. The first one is to sample out the two banks among the sixteen private banks operated in the country and the second phase is to select number of respondents within the selected banks. According to National Bank of Ethiopia, (NBE, 2020) annual report among the sixteen private commercial banks operated in the country, six of them were operated in the industry for more than 20 years and two banks namely Dashen and United banks were randomly selected for the study. The study used questionnaires as an instrument for data collection and the Cronbach alpha test was used to test the reliability of the instrument. Correlation analysis was carried out to identify the nature of strength and direction of the relationship between the independent variables (philanthropic, ethical, legal and economic responsibilities) and the dependent variables (profitability), regression analysis was also employed to determine the degree in which the dependent variable can be predicated or explained from the independent variables. The finding reveals that ethical, philanthropic, legal and economic responsibilities of CSR dimension have a positive and significant impact on profitability of the banks. Furthermore, the overall finding of the study suggested that CSR practice of banks has a significant impact on the level of their profitability. The study recommends that banks should improve their efforts exerted towards their CSR practice in order to enhance their profitability.
IBM Strategy and Values: (1) Focus on open technologies and high- value solutions, (2) Deliver integration and innovation to clients, (3) Become the premier Globally Integrated Enterprise.
HP is a large multinational technology company headquartered in Palo Alto, California. It was founded in 1939 by Bill Hewlett and Dave Packard in a Palo Alto garage. Today it employs over 349,000 people worldwide and has a presence in over 170 countries. HP is a leader in printers and PCs and also provides servers, storage, networking and cloud computing services.
IBM was founded in 1911 and emerged as a superpower by the 1950s, but faced structural problems in the early 1990s that led to $16 billion in losses. Lou Gerstner was hired in 1993 to rescue IBM. He took several steps, including layoffs of 40,000-50,000 employees, cost reductions of $6.8 billion through expense cuts and selling non-core businesses. Gerstner also restored line manager accountability, reorganized IBM into one global organization, refined sales processes, and focused on services as hardware stagnated. These strategies secured IBM's core competencies, provided an outside perspective to address real problems, and dismantled a collegial culture, driving financial results. However,
As managing ESG and sustainability issues have become mainstream business practice, there is no doubt in the minds of corporate leaders that ESG/sustainability issues should be a top priority agenda in boardrooms. However, it is still challenging to integrate ESG/sustainability considerations fully into business practices due to the difference between short-term financial goals and longer-term ESG/sustainability performance. Thus, top executives usually give weight to the shorter-term financial metrics when trade-offs between financial and ESG/sustainability performance come into focus. How can companies achieve short-term profits and ESG/sustainability goals at the same time?
Agenda
ESG/Sustainability Imperative v. Conundrum
Stakeholder Capitalism v. Purpose
Sustainable Economic GrowthValue Innovation for Sustainable Economic Growth
Business Model Innovation for Profitable and Sustainable Business
Sustainability Balanced Scorecard for TBL
Industry/Business Specific Cases
AIC Systems is a Taiwanese electronics manufacturer that began producing printed circuit boards and has expanded into consumer electronics. They were facing problems with low productivity on their netbook assembly lines due to inconsistent operations, bottlenecks, and a spike in production demands. To address this, they implemented several solutions including adopting a batch manufacturing process with gravity feed shelves to reduce re-stocking times, assigning dedicated floaters to each line, and improving material, machine, and capital productivity metrics to better utilize existing resources and boost output.
The document summarizes IBM's leadership and changes under three CEOs from the early 1990s to present:
1) Louis Gerstner transformed IBM's organizational structure in the 1990s from mechanistic to organic and customer-centric, removed bureaucracy, centralized product development, and focused on market trends over internal rules.
2) Under Sam Palmisano from 2004-2011, IBM decentralized power and had thousands of leaders work collaboratively globally. ValuesJam encouraged independent thought among employees.
3) Virginia Rometty since 2011 has enhanced growth markets, bolstered services, and outsourced jobs to India, while acquiring Green Hat for $20 billion with no change in strategy.
This document summarizes the key differences between Vitality Health's previous performance management systems: PMET 1 and PMET 2. PMET 1 aimed to identify low performers using 13 rating categories but resulted in homogeneous ratings. PMET 2 aimed to retain top performers using 5 rating categories but still had a small number of top performers. The document also outlines issues with both systems and recommends changes Hoffman should make, including introducing mid-year reviews, evaluating performance based on KPI achievements, dividing criteria into business and strategic categories, and allowing for employee self-ratings.
Dell's Corporate Social Responsibility RecommendationsErica Swallow
As a final presentation at Professor Aline Wolff's Organizational Communications course at NYU Stern, Jacob Aryeh, Robert Gee, Dhruva Kaul, Diana Shen and Erica Swallow presented their recommendations for Dell's Corporate Social Responsibility initiatives.
Their vision for Dell's Corporate Social Responsibility was to partner with customers to focus on strategic CSR initiatives and align these initiatives with Dell's business strategy, allowing the company to obtain a competitive edge and regain market share.
1) The document describes Interpretive Structural Modeling (ISM), which is used to identify and summarize relationships among variables that define a problem or issue. 2) The objective of ISM is to identify and rank variables, establish relationships among them, and discuss managerial implications. 3) The ISM methodology involves listing variables, developing a Structural Self-Interaction Matrix, a Reachability Matrix, partitioning the matrices into levels, and forming a hierarchy of variables.
This document discusses electronic waste (e-waste), its sources and characteristics. It notes that e-waste is the fastest growing waste stream and is composed of both valuable and hazardous materials. The document outlines the Indian e-waste scenario, noting that e-waste generation is expected to significantly increase by 2020 and that most e-waste management is currently unorganized. It concludes by stressing the need for a national e-waste policy and framework in India to properly manage increasing e-waste in an environmentally sound manner.
General electric medical systems, 2002Sahil Chopra
This document provides an overview of healthcare systems and medical equipment companies globally. It then focuses on General Electric Medical Systems (GEMS):
- GEMS is a $8 billion division of GE and the largest medical equipment company with 50% market share. It grows around 16% annually.
- 60% of GEMS' revenue comes from equipment sales and 40% from services. It spends 7-9% of sales on R&D and has an operating margin of 18%.
- The document also discusses various models of international organization structures and the characteristics of multinational, global, international, and transnational companies.
Environgard Corporation, a manufacturer of air pollution equipment, needs $34 million to develop new equipment and remodel existing products. It is considering raising this capital through common stock, bonds, or preferred stock. The document analyzes the financial impact of each option using various metrics like earnings per share, debt ratio, times interest earned coverage, and fixed charge coverage. It finds that bond financing provides the highest EPS of $2.91 per share, while maintaining debt ratios and coverage metrics close to or above industry averages. Overall, bond financing appears to be the best option to maximize the company's stock price.
- Major spinoff of GE's business portfolio and geographic redistribution of focus and resources is required. Divesting the insurance and consumer/industrial businesses and focusing on energy, healthcare, and consumer finance in markets like China, India, Brazil and South Africa is recommended.
- Investing in alternative energy in India and the healthcare sector in China presents good opportunities due to high growth. Porter's 5 forces analysis shows the alternative energy sector in India has low competition and high profitability.
- Strategic initiatives around quality, green technology, innovation, and customer focus can help strengthen GE's core competencies within its businesses.
1. Founded in 1968, Intel Corporation began as a microprocessor company and later entered the DRAM business in the 1980s. However, Intel exited from DRAM production in the 1990s due to high costs and increasing competition from Japanese manufacturers.
2. Intel adapted to changes in the semiconductor industry and the rise of personal computers and the Internet. Under Andy Grove's leadership, Intel shifted its focus to microprocessors and worked closely with customers and suppliers.
3. Factors contributing to Intel's success included large investments in research and development, manufacturing technology, and developing relationships within the semiconductor industry cluster in Silicon Valley. Upgrading technology and gaining competitive advantages through proprietary standards also helped Intel sustain its leadership in microprocessors
GE case study two decade transformation Jack Welch's LeadershipAnkush Goel
Jack Welch transformed GE over two decades through relentless restructuring, acquiring and divesting businesses, and developing a culture of continuous improvement. Under his leadership, GE became one of the world's most diversified and profitable companies, with annual shareholder returns of 23%. Welch instituted a "fix, sell, or close" policy for businesses and cut layers of management. He globalized operations significantly and placed strong emphasis on developing leaders and continuous improvement efforts like Six Sigma. By the time of his retirement, GE had become a global industrial powerhouse focused increasingly on services in addition to products.
RSH, an investment banking firm, needs to replace its top semiconductor analyst Peter Thompson who resigned. Stephen Connor must decide whether to promote Peter's junior analyst Rina Shea internally or hire an outside candidate. Several candidates are considered including Gerald Baum, David Hughes, Sonia Meetha, Seth Horkum, and Rina Shea. Each candidate is evaluated based on their experience, skills, reputation, and fit with RSH's culture.
Alex Zolotorevskiy Strategic Planning Analysis of Embraer Masters ThesisAlex "Z" Zolotorevskiy
Embraer is the third largest aircraft manufacturer in the world. This document analyzes Embraer's strategic planning across its four divisions: business aviation, commercial aviation, agricultural aviation, and defense/security. The analysis examines Embraer's mission/vision, corporate social responsibility, external/internal environments using models like PESTE, Porter's Five Forces, SWOT, and financial performance using ratios. Overall, the study finds Embraer has a strong mission/vision and CSR policies. It enjoys financial health and leadership in regional jets. Embraer should continue expanding its businesses and pursue developing its defense/security division and entry into the space industry.
Greg James at Sun Microsystems, Inc. (A)
Greg James, a global manager at Sun Microsystems
To resolve a serious customer system outage as required by a service agreement
Sets out to meet with his entire member in customer implementation team spread across India, France, UAE, and US
Rather than finding a immediate solution to the rapidly escalating customer situation that motivated his trip, he finds himself facing distributed work.
Interpersonal Conflict and management issues in global collaboration are threatening to unravel his team.
Greg James at Sun Microsystems, Inc. (B)
This case updates the steps Greg James took to solve the problems that instigated the crisis.
Greg James solves the problems involved in his team's breakdown and creates team cohesion to help them function together effectively.
VERGE 22: Electrifying Charging Solutions and the Need for InnovationGreenBiz Group
This document discusses the need for innovation in electric vehicle charging solutions. It highlights that while the EV market is growing rapidly, infrastructure is lagging behind and current chargers rely too heavily on centralized networks, making them unreliable. Several companies are working on solutions like distributed networks and self-reliant protocols to increase reliability. Workforce training is also needed to properly maintain charging infrastructure and ensure high uptime.
The document summarizes the career crisis of Thomas Green, a senior market specialist, due to office politics at his company Dynamic Displays. It describes how Green was promoted quickly but struggled to adapt to his new managerial role. His independent work style and challenges to his boss Frank Davis's forecasts created conflicts. Davis came to perceive Green negatively and tried to get him fired. The document also analyzes the personalities and behaviors of Davis, Green, and their boss Shannon McDonald that contributed to the political situation. It concludes with suggested actions for Green like self-evaluation and understanding others' perspectives to improve his working relationships.
Term Paper: Towards a Definition of Organizational SustainabilityAntony Upward
This term paper for York University Master of Environmental Studies course ES/ENVS5150 Perspectives on Green Business (Fall 2010, Prof. Brian Milani) develops a working definition of organizational sustainability and explores the implications for the reporting of organizational performance.
This paper got a positive review from Prof. Milani who said the paper was "interesting and thoughtful".
Corporate Social Responsibility and Profitability in the Banking Sector: The ...Dr. Amarjeet Singh
In this article, we explore the relationship between corporate social responsibility and profitability with particular reference to Ethiopian financial industry. In line with this, the paper investigated the practice of corporate social responsibility and its impact on profitability in two private banks in Ethiopia. The study used two sampling phases. The first one is to sample out the two banks among the sixteen private banks operated in the country and the second phase is to select number of respondents within the selected banks. According to National Bank of Ethiopia, (NBE, 2020) annual report among the sixteen private commercial banks operated in the country, six of them were operated in the industry for more than 20 years and two banks namely Dashen and United banks were randomly selected for the study. The study used questionnaires as an instrument for data collection and the Cronbach alpha test was used to test the reliability of the instrument. Correlation analysis was carried out to identify the nature of strength and direction of the relationship between the independent variables (philanthropic, ethical, legal and economic responsibilities) and the dependent variables (profitability), regression analysis was also employed to determine the degree in which the dependent variable can be predicated or explained from the independent variables. The finding reveals that ethical, philanthropic, legal and economic responsibilities of CSR dimension have a positive and significant impact on profitability of the banks. Furthermore, the overall finding of the study suggested that CSR practice of banks has a significant impact on the level of their profitability. The study recommends that banks should improve their efforts exerted towards their CSR practice in order to enhance their profitability.
Effect of corporate social responsibility information disclosure on financial...Alexander Decker
This study analyzed the effect of corporate social responsibility (CSR) information disclosure on financial performance and firm value in banking companies listed on the Indonesia Stock Exchange between 2008-2011. The study found that CSR disclosure positively affected three measures of financial performance (return on assets, return on equity, return on sales) and firm value as measured by Tobin's Q. Additionally, return on assets and return on equity positively influenced firm value, but return on sales did not. The study used quantitative methods including descriptive analysis and path analysis to test the relationships between CSR disclosure, financial performance, and firm value.
This document summarizes research on the relationship between corporate social responsibility (CSR) and financial performance. It reviews definitions of CSR from various scholars, with no universally agreed upon definition. It also examines factors that contribute to CSR like community involvement, employee treatment, and environmental initiatives. The document discusses theories on the relationship between CSR and financial performance, citing literature that argues for both positive and negative relationships. It analyzes several studies that have attempted to empirically test the relationship but have found mixed or inconclusive results.
This document summarizes an article from the International Journal of Management that examines the relationship between corporate social responsibility and financial performance. The article reviews definitions of CSR from various scholars, noting there is no universally agreed upon definition. It examines factors that contribute to CSR and explores how CSR may impact financial performance based on a company's contributions in its industry. The article also reviews research techniques used in similar studies. The summary provides context on the journal, identifies the topic and objectives of the article, and briefly discusses what information it contains to give an overall understanding of the document.
This document summarizes an article from the International Journal of Management that examines the relationship between corporate social responsibility and financial performance. The article reviews definitions of CSR from various scholars, noting there is no universally agreed upon definition. It examines factors that contribute to CSR and explores how CSR may impact financial performance based on a company's contributions in its industry. The article also reviews research techniques used in similar studies. The summary provides key definitions and concepts discussed in the document to give an overview of the topic and goals of the article.
This document discusses factors that affect firm value for public manufacturing firms in Indonesia, including social responsibility, corporate governance, company size, and profitability. It provides background on the relationship between these factors and firm value based on prior literature. Theoretical frameworks discussed that may explain these relationships include agency theory, stakeholder theory, legitimacy theory, positive accounting theory, and signaling theory. The purpose of the study is to develop a new model of the relationships between these exogenous, intervening, and endogenous variables based on these theories and prior empirical research.
7FNCE044W Predictive Analysis For Decision Making.docxsdfghj21
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revenue, reduced incident rate reduction had positive significance effect on revenue and water recycling has
negative insignificant effect on revenue. In the future researches, larger samples of companies form diverse sectors
and subsectors should be studied to broaden the research on company performance especially the non-financial
aspect.
An Exploratory Study of Factors Influencing Corporate Sustainability on busin...AkashSharma618775
This study evaluates the effect of corporate sustainability on business performance of manufacturing
industries in USA, from 2012 to 2015. These Manufacturing industries are listed in Corporate Social
Responsibility Hub (CSRHub), Morning Star and Global Reporting Initiative (GRI). All data used in this report
were extracted from 37 manufacturing companies’ Sustainability, corporate social responsibility (CSR) and
annual reports. These companies are of diverse sectors such as Automobile, Health care, consumer goods, food,
beverages and technology. Quantitative method of research is used in this study; this also includes the use of
explanatory and descriptive research design. The main issues to be discussed in this study are Donation, Incident
rate reduction and Water Recycled as the independent variables, while Revenue is the dependent variable. Data
analysis was carried out using the regression analysis, descriptive statistics and correlation. E-views software
generated the data for further analysis. The findings imply that donation has a positive insignificance effect on
revenue, reduced incident rate reduction had positive significance effect on revenue and water recycling has
negative insignificant effect on revenue. In the future researches, larger samples of companies form diverse sectors
and subsectors should be studied to broaden the research on company performance especially the non-financial
aspect.
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
1. Internship Report
The Impact of Anchoring on Charitable Contributions and CSR Spending
SUBMITTED BY:
Jatan Gogri
Second Year UG, Economics & Finance
UoLIP-the LSE
jatangogri@gmail.com
MENTOR:
Dr. Naman Desai
Finance & Accounting Area
Indian Institute of Management, Ahmedabad
namand@iimahd.ernet.in
4. PREFACE
This report aims to summarize my internship study wherein fundamental
objective was to examine the potential consequences of the Anchoring effect on
charitable contributions and CorporateSocial Responsibility (CSR) spending in
the context of the minimum CSR spending limits imposed by the Companies
Act (2013), in India.
The report is divided into three parts. Part 1 summaries the various benefits
gained by firms who indulge in CSR activities and new 2% rule. Providing
literature review of the Anchoring effect and its possible application to the 2%
rule is the main theme of part 2. Part 3 presents the two experiments I assisted
in, wherein the results confirm contamination of the charitable donation amount
and CSR spending by an anchor.
More importantly, I would like to thank my mentors, Dr. Naman Desai and
Dr.Viswanth Pingali, for providing a free space to chase my own curiosities,
and in turn, experience grow. Thanks, again!
Jatan Gogri
5. 1 | P a g e
PART 1
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Introduction
There is no single universally accepted definition of CSR. It can be defined as
“discretionary business practices and contributions of corporate resources intended to
improve societal well-being” (Kotler & Lee, 2005) Not to ignore the fact, this is just one of
myriad interpretations of CSR. However, the key elements incorporated in most of the
definitions for CSR; in recent literature are: First, CSR refers to corporate actions that respect
and consider the interests of stakeholder groups; other than their shareholders and debt
holders. Second, those corporate actions go beyond the interests of the firm and that which
are required by law. In the Indian context, the World Bank Council for Sustainable
Development states CSR as a tool to improve overall human development and social
inclusion. More specifically, the World Bank envisions CSR as an activity that will ensure
that corporations will work with government, civil society, and community to improve the
lives of the underprivileged people of India by making growth more inclusive (World Bank,
2013).
Benefits of indulging in CSR
Theodore Levitt authored the HBR article “The Dangers of Social Responsibility,” in
which he cautions that “government’s job is not business, and business’s job is not
government” (1958, p. 47). Free-market propagandist Milton Friedman (1970) expressed the
same sentiment and added that the mere existence of CSR was a signal of an agency problem
within the firm. An agency theory perspective implies that CSR is a misuse of corporate
resources that would be better spent on valued-added internal projects or returned to
shareholders. However, recent research has suggested several economic and strategic benefits
accruing to companies that invest in CSR activities. For instance, there has been substantial
6. 2 | P a g e
evidence indicating that companies with a good CSR spending record, and voluntarily
disclosure of their CSR activities enjoy a significantly reduced cost of capital in comparison
to similar corporate houses that have a poor CSR performance record (Ghoul et al., 2011;
Dhaliwal et al., 2011; Richardson & Welker, 2001). Research also suggests that, CSR
activities can also lead to better financial performance by; improving the firm’s reputation
among customers which results in increased sales, improvement in the firm’s reputation with
regulators which helps in receiving more favorable treatment from such regulators,
improvement in ability to attract, retain and motivate employees, etc. (Dhaliwal et al., 2012;
Modi & Mishra, 2013; Korschun et al., 2014).
Research in the field of marketing indicates that there is a positive association
between a company’s CSR activities and consumers’ attitudes towards the company and its
products (Brown & Dacin, 1997; Creyer & Ross, 1997; Ellen, Mohr & Webb, 2000). Positive
CSR also raises the degree of brand loyalty, which in turn can make consumers less prone to
attitude change and reduce the effectiveness of competitors’ persuasion attempts (Krasnikov
et al., 2009). Additionally, Minor & Morgan (2011) indicate that a company’s CSR activities
can provide some insurance to the company against loss of reputation during turbulent
circumstances.
The 2% Rule
The Indian government became the first regulator in the world to mandate a minimum
CSR spending. In India, the concept of CSR is governed by clause 135 of the Companies Act,
2013, which was passed by both Houses of the Parliament, and had received the assent of the
President of India on August 29, 2013. The CSR provisions within the Act are applicable to
companies (publicly listed as well as private) with an annual turnover of 1,000 crore INR and
more, or a net worth of 500 crore INR and more, or a net profit of five crore INR and more.
These companies are mandated to annually spend 2% of average net profit of past three years
on certain approved CSR activities; the eligible activities have been specified under Schedule
VII of the Act. Additionally, the new Companies Act requires the board of the company to
disclose its CSR spending in their financial statements and in a separate individual CSR
report and publish the details on the company’s official website. If the company fails to spend
the prescribed amount, the board, in its report, shall specify the reasons. Through its disclose-
7. 3 | P a g e
or-explain mandate, the state encourages that all corporate bodies contribute transparently to
the betterment of the society as a whole, which in turn would make corporate growth more
inclusive and sustainable.
8. 4 | P a g e
PART 2
THE INEVITABLE ANCHORING EFFECT
Introduction
Cognitive Scientist Herbert Simon (1957) originally proposed the idea that human
judgements are based on Heuristics. Heuristics can be defined as the, “judgmental shortcuts
that generally get us where we need to go – and quickly – but at the cost of occasionally
sending us off course.” (Gilovich & Savitsky, 1996) The Seminal paper, Judgement under
uncertainty: heuristics and biases (Tversky & Kahneman, 1974) described three heuristics
that are employed to assess probabilities and to predict values; which lead to systematic bias.
Adjustment and anchoring (1974) being one of them. Anchoring is a judgemental heuristic
wherein the final estimate is contaminated by an exposure to an explicit (Cervone & Peake,
1986; Tversky & Kahneman, 1974; Strack & Mussweiler, 1997) or an implicit (Northcraft &
Neale, 1987; Wilson, Houston, Etling, & Brekke, 1996) anchor. The classic experiment to
demonstrate anchoring, conducted by Amos Tversky and Daniel Kahneman goes on
following lines…Subjects were asked two questions. First, whether the percentage of African
nations in the United Nations (UN) is higher or lower than an arbitrary number-the anchor
that had ostensibly been determined by spinning a wheel of fortune (65 percent or 10
percent). Participants were then asked to give their best estimate of this percentage. Absolute
judgments were assimilated to the provided anchor value. The mean estimate of those who
saw 10 and 65 were 25 percent and 65 per cent, respectively.
Literature Review
Anchoring effect is one most the most robust and easily replicable phenomenon in the
field of experimental psychology. Anchoring effects pervade a variety of judgments, from the
trivial; estimating the mean temperature in Antarctica (Strack & Mussweiler, 1999) to the
apocalyptic; estimating the likelihood of nuclear war (Plous, 1989). In particular, they have
been observed in a broad array of different judgmental domains such as: General knowledge
questions (Strack & Mussweiler, 1997), Price estimates (Strack, Mussweiler, & Pfeiffer,
2000; Northcraft & Neale, 1987), Estimates of self-efficacy (Cervone & Peake, 1986),
Probability assessments (Plous, 1989), Evaluations of lotteries and gambles (Chapman &
9. 5 | P a g e
Johnson, 1994), Legal judgement (Chapman & Bornstein, 1996; Englich & Mussweiler,
2001), and Negotiation (Galinsky & Mussweiler, 2001). This could be the reason why first
offers may influence the final negotiation outcome, because they serve as judgmental anchors
to which the final outcome is assimilated.
Not only is this heuristic pervasive in a plethora of laboratory and real-world settings,
its influence is also remarkably robust. Surprisingly, anchoring is independent of many
potentially moderating variables. For one thing, anchoring occurs even if the anchor values
are clearly uninformative for the critical estimate (Tversky & Kahneman, 1974; Strack &
Mussweiler, 2000). Further, anchoring remains uninfluenced by the extremity of the anchor
(Chapman & Johnson, 1994; Strack & Mussweiler, 1997) so that even extremely implausible
starting points yield an effect. For instance, in one of the studies (Strack & Mussweiler, 1997)
estimates for Mahatma Gandhi’s age were assimilated to an unreasonably high anchor value
of 140 years. Furthermore, the Anchoring effect appears to be independent of participants’
motivation (Wilson, Houston, Etling, & Brekke, 1996). Specifically, there was an
unsuccessful attempt to improve accuracy by awarding a prize for the best estimate. In
addition, it has been demonstrated that anchoring occurs independently of participants’
expertise (Englich & Mussweiler, 2001; Northcraft & Neale, 1987). For example, study in the
legal domain (Englich & Mussweiler, 2001) wherein experienced judges and inexperienced
law students were both influenced by the anchor sentencing demand given by a computer
science student to similar degrees. Furthermore, anchoring effects are characterized by an
exceptional temporal robustness and persist over fairly long periods of time. In one study,
anchoring effects were still apparent one week after the anchor value had been considered
(Mussweiler, 2001).
Another striking demonstration of the robustness of the phenomenon, stems from
research demonstrating that explicit instructions to correct for a potential influence of an
anchor do not mitigate the effect (Wilson et al., 1996). Even explicitly forewarning judges
about the potential distortion and informing them about its direction does not diminish the
effect. The literature clearly indicates that anchoring is a ubiquitous and highly robust
phenomenon; difficult to escape. Some research (Mussweiler, Strack, Pfeiffer, 2000) has been
conducted to overcome this inevitable anchoring effect. This real world setting study
demonstrated that de-bias effect can be achieved by applying a consider-the-opposite
strategy; generating reasons why an anchor is inappropriate.
10. 6 | P a g e
“The terms Anchor and Anchoring effect have been used in the psychological
literature to cover a bewildering array of diverse experimental manipulations and results,
ranging from the effects of unjudged a stimuli on psychological states (Helson, 1964) to early
bids and offers in negotiations (Neal & Bazerman, 1991)” (Jacowitz & Kahneman, 1995) For
this report, an anchor is an arbitrary value which is considered by the subject before making a
numerical estimate.
Possible Implications of the 2% rule owing to the Anchoring effect
For long, the Anchoring effect had rather remained the enigmatic Anchoring effect.
“In current psychological research, few phenomena are easier to demonstrate and harder to
explain than the so-called anchoring effect.’’(Strack & Mussweiler, 1997) Earlier experiments
focused on either verifying or demonstrating the Anchoring effect in various scenarios, or
were inconclusive about the psychological mechanisms that underlie anchoring. However,
Daniel Kahneman suggests in his book, Thinking, Fast and Slow (2011); the psychology of
the Anchoring effect has finally been understood. The agenda of this study as conceived by
my mentors, Dr. Naman Desai and Dr. Vishwanath Pingali, is to examine the prevalence of
the Anchoring effect during charitable donations and possible implications of the 2% rule. A
potential problem with the 2% rule is that large companies, who usually spend more than 2%
of their profits on CSR related activities, could “anchor” their CSR spending on the minimum
stipulated limits which, in turn, could actually reduce their CSR spending. Such a result
would be contrary to the objectives of establishing such a minimum limit. Hence, we examine
the impact of anchoring on charitable contributions, and on the CSR spending of companies.
Two experiments were conducted to examine our primary research questions. The
first experiment was conducted to establish the effects of reference points on decisions related
to charitable giving. The experiment result suggests that participants did anchor on the
minimum stipulated limit while deciding on the amount of charitable contribution. The
second experiment was conducted to examine if anchoring specifically affected CSR
investment decisions. The results of the experiment indicated that the amount of reported
CSR spending was lower when the minimum 2% rule was imposed versus when it was not.
Furthermore, the results also indicate that when the 2% rule was not imposed the participants
appeared to anchor on the overall financial requirement of the CSR activity.
11. 7 | P a g e
PART 3
EXPERIMENTS
Hypothesis
Despite the several strategic benefits already available to companies investing in CSR
activities (Malik, 2014), the Indian Government decided to impose minimum CSR spending
limits on companies. This minimum spending limit does have the potential of increasing the
number of companies investing in CSR activities. However, certain large companies whose
CSR related spending were in excess of 2% of their profits could start anchoring on the
minimum 2% limit, in turn, reducing their investment in social causes. Additionally, once the
2% rule takes effect, it might be difficult for the company’s management to explain any CSR
spending in excess of 2% to the shareholders.
Formally stated:
H1: Individuals and companies subject to minimum spending limits on social causes will
anchor on the stipulated minimum limits, and as a result, invest less in such social causes than
individuals and companies which are not subject to such minimum spending limits.
There could be other variables which could act as anchors in the absence of minimum
spending limits. One such factor could be the total requirement of a CSR project. If a
company decides to finance a CSR activity only partially, then, in the absence of a minimum
spending limit, it is possible that the total financial requirements of a CSR activity could act
as an anchor while deciding on the amount of CSR investment in a particular activity.
Formally stated:
Q1: In the absence of a minimum CSR spending limit would the amount of CSR spending be
anchored on the total funding requirement of a CSR activity?
12. 8 | P a g e
Experiment Design
Two between-subjects experiments were conducted to test our hypotheses. The first
experiment was conducted to investigate if the donors were anchoring themselves to a
reference point. The experiment was conducted on undergraduate students in their last year of
study (before graduating) with the average age of 20.34 years. The participants were divided
in two treatments and were asked to answer 10 (multiple choice) quantitative aptitude
questions within a time limit of 15 minutes.1 The participants were paid 50 INR for every
correct answer and no penalty was imposed for inaccurate answers. Participants who were
unable to answer two questions (or less) correctly were still paid 100 INR for participating in
the study. After the pay outs were determined, participants in one treatment (control group)
were asked to voluntarily contribute a portion of their winnings to a charity of their choice.
The second treatment (treatment group) was similar to the first except that in this treatment a
minimum contribution limit of 5% was imposed on all winnings, and then the participants
had the option to voluntarily contribute any additional amount to a charity of their choice.2
The second experiment was conducted to examine how company executives react to
minimum CSR spending limits while deciding on the amount to be spent on a particular CSR
activity. The second experiment was a 2x2 between-subjects experiment where the presence
or absence of minimum spending limit and the total requirement of a CSR project (50 crores
INR versus 250 crores INR) were manipulated across treatments. All the participants of this
experiment were middle and top level company executives; who reported an average work
experience of 18.45 years. In this experiment the participants were provided with a brief
company description, the abbreviated financial statements of a company and a potential CSR
opportunity (improving schools’ infrastructure for the underprivileged). They were then asked
to determine the amount of CSR spending that would be committed on behalf of the company
on that particular project. This experiment was conducted to specifically examine if the
participants would anchor on the 2% minimum while deciding on their CSR spending.
Additionally, we also examined if the executives would anchor on the total requirements of
the social cause when no minimum spending limits were imposed.
1 The questions were selected from various GMAT practice tests.
2 The minimum 5% of contribution was also given to a charity of the participants’ choice.
13. 9 | P a g e
Results
The descriptive statistics in Table 1 indicate that, participants in the first experiment
contributed significantly more to a charity of their choice when no minimum contribution
limit was imposed, compared to when their earnings were subject to a 5% minimum
contribution (38.5% versus 24.9%).3
The results of the first experiment strongly indicate that
anchoring affects participants’ decision making related to charitable contributions.
Table 1: Descriptive Statistics for Experiment 1 (Indicating Charitable Contributions as
a Percentage of Total Earnings)
Treatment N Mean Std. Dev. Minimum Maximum
1 42 0.385 0.176 0.04 0.80
2 41 0.249 0.145 0.05 0.53
Total 83 0.318 0.174 0.04 0.80
Treatment 1 = no mandatory contribution
Treatment 2 = 5% mandatory contribution
The second experiment was conducted to examine if the anchoring effects observed in
the context of charitable contributions actually extend to individuals making CSR spending
decisions. The descriptive statistics in Table 3 indicate that the CSR spending was higher
when no minimum was stipulated compared to conditions where a 2% minimum spending
limit was imposed. This result holds true irrespective of the overall requirement of the social
project (32.12 versus 25.42 and 28.49). Additionally, the CSR spending is the highest (42.40)
for the condition where fund requirement is relatively high (INR 250 crores versus INR 50
crores) and where no minimum CSR spending limits are imposed.
3 The contributions were significantly greater than the minimum 5% because of two primary
reasons. First, the 5% of total earnings might have appeared to be too less in absolute numbers (For e.g.
5% of Rs 200 is only Rs 10 which is a very small and insignificant amount in India. Second, the currency
denomination is such that participants would have found it difficult to contribute exact percentages and
hence they may have rounded up or down to multiples of 10, 20 or 100 which are the most commonly
used currency notes in India.
14. 10 | P a g e
Table 2: Descriptive Statistics for Experiment 2 Indicating Amount of CSR Spending
Mean (Std. Dev) Mean (Std. Dev)
Project Requirement 50 crores Project Requirement 250 crores
Minimum 2% 25.42 (2.44) 28.49 (8.00)
No Minimum 32.12 (10.67) 50.90 (38.88)
Conclusion
The results of this study have important implications for policy makers and regulators. While
the setting of a minimum CSR spending potentially increases the number of companies
investing in CSR activities, the minimum spending limit could actually act as an anchor and
potentially reduce the amount of CSR spending of certain large companies which spend more
than 2% of their profits on such activities which they are not legally obliged to. Therefore,
before stipulating any minimum limits regulators should clearly understand the implications
of such limits and also conduct a detailed analysis before deciding on the magnitude of any
minimum spending limit. Additionally, experiment results clearly suggest that corporate
bodies could ignore the strategic benefits gained through positive CSR investment and
instead anchor themselves solely on the minimum stipulated spending limit. This is consistent
with the past empirical evidence, which have persistently proved Anchoring effect to be a
robust, almost inescapable phenomenon.
More interestingly, our results also indicate that in the absence of minimum CSR spending
limits, the CSR spending appeared to be driven by the total requirement of the CSR project. If
such an anchoring leads to greater CSR spending than regulators should try and increase
awareness about the requirements of various CSR activities rather than imposing minimum
spending limits on corporations. Any such spending limit should be set strategically,
systematically and thoughtfully.
15. 11 | P a g e
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