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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

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

By

Juliana Muñoz and Dr. Johnny Snyder

Mesa State College

abstract
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
Introduction: The Events
  • The terrorist attacks of 9/11
  • The Asian Tsunami of 2004
  • Hurricane Katrina in 2005
  • The South Asian Earthquake of 2005
who was there to help
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
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
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
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
The Key Element of Embedded Corporations

A direct impact on a

community, society and

economy surrounding a corporation

defining corporate social responsibility csr
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
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
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
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
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.

the question
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
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
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
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
pure play companies contribute
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
Users Want to Donate

Search term on Google Trends “Hurricane Katrina Donate”

Google Trends, 2006

online contributions
Online Contributions

Pearlstein (2006, February)

contributions of pure play sites
Contributions of Pure-Play Sites

Pearlstein (2006, February)

increased page views
Increased Page Views

Rank Spikes due to Hurricane Katrina

Alexa (2006)

the effect on pure play sites
The Effect on Pure-play Sites

Hurricane Katrina

Post Holiday Slow down

South Asian Earthquake

Alexa (2006)

costs
Costs?
  • Search engine placement: $500.00
  • Click through advertising: $2.15/click
  • A button on Google’s home page:

- priceless

conclusion
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
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
Thanks!
  • Thanks for coming to the talk.
  • Questions?
references
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
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
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