Deck 16: Business and Community Stakeholders

Question 1

Outline the essential steps involved in developing a community action program.

Answer 1

The essential steps involved in developing a community action plan are (1) know the community, (2) know the company's resources, (3) select the projects to support, and (4) monitor the projects you support.

Question 2

Explain the pros and cons of community involvement and corporate philanthropy, provide a brief history of corporate philanthropy, and explain why and to whom companies give.

Answer 2

Community involvement and corporate philanthropy benefit companies in a number of ways. First, they add a positive light to the organization. Second, it provides a direct outlet for employees to give back to their communities and lift their self-esteem. Third, as an incentive for corporate giving, the government provides tax deductions for firms who donate.
There are also two major downsides to community involvement and corporate philanthropy. First, involvement in the community and corporate giving can cost the company both time and money that they could be using to grow the business. Second, if the project/charity that a firm gives to fails, or behaves unethically; the firm risks bad publicity by association.
The earliest forms of corporate philanthropy began around the 1920s. Levels of participation varied, with large firms being able to give large sums of money to causes all across the nation, to small firms investing heavily in the community where they resided. From 1918 to 1929, the Community Chest movement dominated corporate giving. Between 1929 and 1935 there was an attempt to allow businesses a small tax deduction for corporate giving. Corporate philanthropy stagnated during the years of the Great Depression and World War II, but began expanding again from 1945 to 1960. Modern corporate giving has become more strategic; as companies now look align their philanthropic goals with their business needs.
Companies give in order to be charitable, to invest in their community, or to benefit their own business.
Companies give to four sectors of non-profit projects: health and human services, education, civic and community activities, and culture and the arts. Additionally, in times of crises, corporations also often give to the communities or nations involved.

Question 3

Different among community partnerships, strategic philanthropy, cause- related marketing, and cause branding. Providing an example of each not discussed in the text.

Answer 3

A community partnership is a cooperative arrangement between a for-profit business and a non-profit organization. An example of a community partnership is Nike's affiliation with the LIVESTRONG Foundation.
Cause-related marketing is the direct linking of a business' product or service to a specified charity. An example of this is Chegg's promise to plant a tree for every book rented through the American Forest Global Releaf Foundation.
Strategic philanthropy is an approach by which corporate giving and other endeavors of a firm are designed best fit the firm's overall mission. Disney is currently developing a strategic philanthropy philosophy of focusing on helping children and families and encouraging creativity through specific projects.

Question 4

Identify and discuss briefly what you think are the major trade-oils that firms face as they think about offshore outsourcing, offshoring, or plant closings. When substantial layoffs are involved, what are firms' responsibilities to their employees and their communities?

Question 5

In your opinion, why does a business have a responsibility to employees and community stakeholders in a business-closing decision? Enumerate what you think are the major reasons.