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The Corporate Social Responsibility of Pure-Play Sites versus Brick-and-Mortar Corporations By Juliana Muñoz and Dr. Johnny Snyder Mesa State College Abstract

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The Corporate Social Responsibility of Pure-Play Sites versus Brick-and-Mortar Corporations

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The corporate social responsibility of pure play sites versus brick and mortar corporations l.jpg

The Corporate Social Responsibility of Pure-Play Sites versus Brick-and-Mortar Corporations

By

Juliana Muñoz and Dr. Johnny Snyder

Mesa State College


Abstract l.jpg

Abstract

  • The goal of this paper is to begin to compare the relationships between brick-and-mortar companies and pure-play companies in a socially conscious setting.

  • This comparison will be made utilizing a model known as Carroll’s Pyramid and the business standards that have been set out for brick-and-mortar companies.


Introduction the events l.jpg

Introduction: The Events

  • The terrorist attacks of 9/11

  • The Asian Tsunami of 2004

  • Hurricane Katrina in 2005

  • The South Asian Earthquake of 2005


Introduction frequency l.jpg

Introduction: Frequency

EM-DAT (2006)


Who was there to help l.jpg

Who was there to help?

  • Brick-and-Mortar corporations such as Wal-Mart, GM, and many others.

  • Pure-play sites such as Amazon.com, and other Internet corporations like eBbay, Yahoo, and many others


Slide6 l.jpg

So?

  • Brick-and-Mortar companies are expected to fulfill certain social responsibilities by the communities that surround them.

  • For amazon.com and other Internet sites, there are no such expectations due to the lack of a surrounding physical community.


What s the difference l.jpg

What’s the Difference?

  • A Brick-and-Mortar Corporation:

    - has all their resources (buying,

    selling, shipping, services, and all

    other functions), put into one or

    several physical locations

    - is surrounded by a community of some kind

    - probably has some Web presence (don’t be

    fooled)

    - most importantly, has a direct impact on the

    community which surrounds it

    Example: Wal-Mart


What s the difference cont l.jpg

What’s the Difference? Cont.

  • A Pure-Play organization:

    - has physical building which serves only to

    house employees, an IT infrastructure,

    and/or products for shipping

    - conducts all day-to-day transactions and

    activities via the Internet

    - has far less of an impact on the community

    that surrounds it’s physical building

    Example: Amazon.com


The key element of embedded corporations l.jpg

The Key Element of Embedded Corporations

A direct impact on a

community, society and

economy surrounding a corporation


Defining corporate social responsibility csr l.jpg

Defining Corporate Social Responsibility (CSR)

Generic definition of CSR-

“the concept that business should be

actively concerned with the welfare of

society at large”

(Brigham, 2004, p.16)


The three roles of brick and mortar corporations l.jpg

The Three Roles of Brick-and-Mortar Corporations

Wood (1991)

1. As an institution in society

2. As a particular corporation, or organization in society

3. As individual managers who are

moral actors within the

corporation (p. 695)


Wal mart example l.jpg

Wal-Mart Example

According to CNNmoney.com, after

Hurricane Katrina, one hundred and

twenty three Wal-Mart stores were

closed in the gulf coast region.

Wal-Mart offered all affected employees jobs at other Wal-Mart stores…philanthropic behavior.

Bhatnagar, P. (2005)


Csr on the web l.jpg

CSR on the Web

  • After Katrina and the Asian Tsunami the pure play corporations were quick to install buttons on their sites (home pages) to aid the consumer in donating to these relief causes.

  • Note that as “best practices” are created, rivals tend to copy them quickly (Porter, 2001)


Justification l.jpg

Justification?

The Humanist says, “Philanthropy”

The Skeptic says, “PR ploy”

The business person turns to a model that could help better explain the possible logic behind such a move for both brick-and-mortar and pure-play sites.


Carroll s l.jpg

Carroll’s


The question l.jpg

The Question

Why should Pure-Play sites care?

One answer could be in Porter’s model, the rivalry among existing competitors (for page views).

(Porter, 2001)


The debate to give or not to give brick and mortar vs pure play l.jpg

The Debate:To Give or Not to GiveBrick-and-Mortar vs. Pure-Play

  • Against:

    • Business fundamentals = maximize profits

      “social policy is the jurisdiction of governments, not business” (Sexty, 2004, p. 4)

  • For:

    - Society (consumers), fuel corporations, in turn a corporation should serve society

    - “social responsibility is in the stockholder's interest…Corporate virtue is good for profits” (Sexty, 2004, p. 3).


  • Pitfalls brick and mortar vs pure play l.jpg

    Focus shifted from profit making

    Possible dissatisfaction of shareholders

    Could be seen as utilizing misfortune for press

    Buttons divert traffic from site

    Customer focus is shifted from buying

    Could be seen as utilizing misfortune for press

    PitfallsBrick-and-Mortar vs. Pure-Play


    Benefits brick and mortar vs pure play l.jpg

    Helps employees

    Helps community in which embedded

    Promotes company name in positive manner

    Giving entails:

    Employee time

    Cash contributions

    In-kind contributions

    Promotes company name in positive manner

    Giving entails:

    Employee time (minimal)

    Addition of a button to a web site

    Web page space (minimal)

    BenefitsBrick-and-Mortar vs. Pure-Play


    Largest corporate contributors to katrina l.jpg

    Largest Corporate Contributors to Katrina

    Alexa (2006)


    Pure play companies contribute l.jpg

    Pure Play Companies Contribute

    • By enabling the e-consumer to contribute

    • By facilitating easy payment options

      • Pay-Pal

      • Credit Card

      • eGold

      • gBuy


    Users want to donate l.jpg

    Users Want to Donate

    Search term on Google Trends “Hurricane Katrina Donate”

    Google Trends, 2006


    Online contributions l.jpg

    Online Contributions

    Pearlstein (2006, February)


    Contributions of pure play sites l.jpg

    Contributions of Pure-Play Sites

    Pearlstein (2006, February)


    The effect on brick and mortar websites l.jpg

    The Effect on Brick-and-Mortar Websites

    Alexa (2006)


    Increased page views l.jpg

    Increased Page Views

    Rank Spikes due to Hurricane Katrina

    Alexa (2006)


    News before and after hurricane katrina l.jpg

    News – Before and After Hurricane Katrina

    Nielsen//NetRatings (2005).


    The effect on pure play sites l.jpg

    The Effect on Pure-play Sites

    Hurricane Katrina

    Post Holiday Slow down

    South Asian Earthquake

    Alexa (2006)


    Costs l.jpg

    Costs?

    • Search engine placement: $500.00

    • Click through advertising: $2.15/click

    • A button on Google’s home page:

      - priceless


    Google s pioneering effort l.jpg

    Google’s Pioneering Effort


    Conclusion l.jpg

    Conclusion

    • Pure play corporations are becoming more mainstream

    • Pure play corporations are concerned with their “public image”

    • Pure play corporations can react faster than brick-and-mortar corporations


    Conclusion 2 l.jpg

    Conclusion (2)

    • “Donate Here” buttons do not cost much for the pure play corporation

    • “Donate Here” buttons seem to benefit the pure play corporation in the arena of Web metrics

    • Will it continue? Unfortunately we have to wait to see…


    Thanks l.jpg

    Thanks!

    • Thanks for coming to the talk.

    • Questions?


    References l.jpg

    References

    • Alexa (2006). Alexa Web Search. Retrieved 7/3/2006 from: http://www.alexa.com/#

    • Bhatnagar, P. (2005). Wal-Mart closes 123 stores from storm. CNN Money.com.

    • Retrieved January 21, 2005 from http://money.cnn.com/2005/08/30/news/fortune500/katrina_retailers/?cnn=yes

    • Brigham, E. (2004). Fundamentals of Financial Management. China: Thomson South-Western.

    • Carroll, A. (1991). The pyramid of corporate social responsibility: toward the moral management of organizational stakeholders. Business Horizons, 34(4), 39-49.

    • Carroll, A. (2000). Ethical challenges for business in the new millennium: corporate social responsibility and models of management morality. Business Ethics Quarterly, 10(1), 33-42.


    References cont l.jpg

    References Cont.

    • EM-DAT (2006). Trends and relationships for the period 1900 – 2005. Retrieved June 16, 2006 from: http://www.em-dat.net/disasters/trends.htm

    • Google Trends (2006). Google Trends Labs. Retrieved October 10, 2006 from: http://www.google.com/trends?q=hurricane+katrina&ctab=1&geo=all&date=all

    • Internet Archive (2006). The Wayback Machine. Retrieved June 12, 2006 from: http://www.archive.org/web/web.php

    • Money (2006). Corporate giving for Katrina reaches 547 million. Retrieved 7/3/2006 from: http://www.usatoday.com/money/companies/2005-09-12-katrina-corporate-giving_x.htm

    • Nielsen//NetRatings (2005). Hurricane Katrina drives concerned web users online to web sites for Red Cross, NOAA, news and weather, according to Nielsen//NetRatings. Retrieved 7/6/2006 from: http://www.nielsen-netratings.com/pr/pr_050901.pdf

    • Pearlstein, J. (2006, February) “Click Here to Donate: Disaster relief efforts spur growth in online fundraising”. Wired Magazine, 54.


    References cont38 l.jpg

    References Cont.

    • Porter, M. (2001). Strategy and the Internet. Harvard Business Review 79(3), 63-78.

    • Porter, M. & Kramer, M. (2002). The competitive advantage of corporate philanthropy. Harvard Business Review, 80(12), 56-68.

    • Sexty, R. (2004). Corporate Social Responsibility: The Concept. Retrieved December 5, 2005, from http://www.ucs.mun.ca/~rsexty/business8107/CSocialR.htm

    • Stiner, Ina. (2005). eBay Donates $1 Million to eBay Sellers Affected by Hurricane Katrina. Auctionbytes.com. Retrieved on January 5, 2005 from http://www.auctionbytes.com/cab/abn/y05/m09/i12/s01

    • Turban, E., King, D., Viehland, D., & Lee, J. (2006). Electronic Commerce 2006: A Managerial Perspective. Upper Saddle River, NJ: Prentice Hall.

    • Vise, D. & Malseed, M. (2005). The Google Story. New York: Delacorte Press.

    • Wood, D. (1991). Corporate social performance revisited. The Academy of Management Review, 16, 691-718


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