POM Case 6

1. 1
CASE STUDY – 6
THE UNITED WAY OF COMPENSATING
EXECUTIVES
Submitted to,
Prof. Abhilash G N
Submitted by,
Nivin Vinoi
P14199
PGDM - B
Submitted in: 14/07/2014

2. 2
EXECUTIVE SUMMARY
The main essence of this case is that the president
of United Way of America (UWA) the largest
charity organization in US got into allegations of
misuse of funding. Due to this president has been
resigned and for retrieving its image UWA
introduced certain restrictions regarding the
utilization of fund.
(Word count: 50)
ANALYSIS
United Way of America is a non-profitable charity
organization which works on public funding. They
can’t exit without the support of public.
Considering such an organization they have to take
care certain Environment factors. They are,
1. Donations
2. Transparency in money handling
3. Goodwill
These type of non-profitable organizations
depends upon the donors. So it is the organizers
responsibility to make sure that the money given

3. 3
to them reach the real beneficiaries. If the
transparency on utilizing the donation is lost, the
relationship between the donors and organizers
will get worse. And it will result in diminishing
public trust and thereby decline in public funding.
Donors always have the right to look that their
donations that these money doesn’t end up in
wrong hands. If the donor ask about the money it
is the duty of organizer to respond it with proper
answer. Medias reporting about presidents lavish
spending of money by travelling in first class and
using limousine services and trans-Atlantic flights
made this critical situation. This ended up in an
decline of 2.5% of donation. Goodwill and
credibility are the main two driving factors that
runs such organizations. If public starts to doubt on
its credibility and goodwill it will even affect the
existence of organization.
As a non-profitable entity it is
their responsibility to say no to extravagance. If
extravagance is done by the organizers, it will
affect the organization as a whole. UWA was a very
big organization. So Due to this extravagance they

4. 4
president of UWA was forced to resign. Before
joining this organization he may surely had lot of
job opportunities. But he choosed to join UWA. So
choosing to be in a non-profitable organization it is
his responsibility to follow certain rules and
policies of the organization. And also while
recruiting to key posts of this type of organizations
the organizers should look after that the person
recruited should have a good intention and a clear
understanding about the organization he is going
to work.
The stakeholders here is the donors. The external
factors here is the environmental factors like donation,
transparency, goodwill etc. Due to this factors there will
be certain policy outcomes. Through this new policies
they aimed at recovering from all the allegations of
misuse of funding and excessive compensation. As an
outcome of this policy they suspended the president’s
STAKEHOLDER INTERESTS
EXTERNAL FACTORS
POLICY OUTPUT

5. 5
retirement package. UWA conducted an investigation
and published a report that detailed numerous financial
abuses by its management during the prior 5 years.
Managers are held responsible for their budgets and are
monitored monthly by senior vice-presidents. Coach
travel is mandated for all business trips and a daily meal
allowance has been set. As a result of all these new
policies they expected good outcome. They became
more transparent. Goodwill and credibility againstarted
to rise. These all resulted in creating more donors
thereby it increased the funds. Thus UWA who lost their
face due to this scandal finally recovered with the help
of stakeholders and external environmental factors.
(Word count: 500)