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Posted Thursday, March 15, 2007 2:29 PM


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Social Responsibilty


I saw this article on Microsoft donating money and thought it would be an interesting poll. If you use Live Messenger (formerly MSN IM), then Microsoft will donate a percentage of the ad revenue.


Actually even if you don't, they've agreed to donate $100,000 as a minimum. It's a marketing trick, but it's also a good thing that they don't have to do. I haven't seen much press on this (and I've been looking), and given Mr. Gates generosity, I think this is just a socially responsible thing by Microsoft. It doesn't substantially impact their shareholders and it's a good way to help others in the world.


So given this is Friday ...



Should a company be socially responsible?


A corporation is defined as an entity separate from its members with its own liabilities and powers. It has a number of rights to function as a member of society (appoint agents, sign contracts, etc.) and the ability to exist beyond the lifetimes of its owners.


It's also often said that a corporation exists to pursue profit. That can be true, but there are non-profit corporations. Corporations primarily exist to limit liabilities. You cannot lose more money than you put into the corporation, unlike other types of businesses. Corporations exist to meet a charter, which is something its founders create and register.


Google has an interesting philosophy, which is similar. JD Edwards had a ten part vision that was similar (sorry, can't find a link), but one that was mounted on a fountain outside and in which employees took pride. Microsoft has a Global citizenship initiative. I think lots of companies have something similar.


I think that a corporation should embody the values of its founders, but as it matures, it should be socially responsible. There is more to this life than our own selfish pursuits. Those exist, but just as most of us help others when we can, so should a corporation. Our compassion, mercy, feelings, and charity should be a part of the workplace.

Post #351943
Posted Thursday, March 15, 2007 3:03 PM


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I can't speak for what corporations should or shouldn't do because in the end, it all comes down to what people should or shouldn't do.  In some cases those people run, or invest in, corporations. 

I do know that one of the reasons I work for the Bank is that there is a strong ethic here to give back to the community. It's part of everyone's performance evaluation.  The first thing we did when we went public is use part of the capital raised to form a foundation which responds to health and education needs in the Tacoma area.  We regularly contribute more money to the United Way campaign than institutions many times our size, and we have great fun doing it.

That level of commitment is a strong draw for me. The type of culture that such a commitment engenders in the employees and management benefits not only the community, but our employees and our customers, because, first and foremost, we treat each other as real people.

We need to keep in mind that corporations are composed of people, and people have a broader scope of responsibility than filling their wallets.

 





And then again, I might be wrong ...
David Webb
Post #351953
Posted Friday, March 16, 2007 6:31 AM
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Just throwing this in for your amazement or amusement...

Wikipedia's definition of Corporate Social Responsibility: http://en.wikipedia.org/wiki/Corporate_social_responsibility

Post #352044
Posted Friday, March 16, 2007 6:32 AM
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I agree that companies should be socially responsible in their community and when a company becomes global as Microsoft has it should be globally responsible.  I'm going to take this rant on one branch of the global responsibility tree that affects a lot of us.

It's no secret that the Bill and Melinda gates Foundation has done and does more across the globe than their share.  Microsoft, the company, enjoys a lot of good-will from their philanthropic efforts.  I applaud them and feel that they have a global obligation.  Oprah Winfrey falls into the same category with me.  She's become a Global presence and she's benefiting from a lot of benefit in the press from her new schools.  I don't begrudge her a bit and respect and applaud her efforts too.

However it's also a cost benefit model of philanthropy.  Where will the most benefit be for the least amount of investment?  That will not be inside the United States.  At least not until 2027 http://www.informationweek.com/shared/printableArticle.jhtml?articleID=198001218 .

Countries who make a commodity out of intellectual property will aid in flattening the earth's markets.  (China, Korea, India, Hungary) Unfortunately, and I'm paraphrasing the words of Tom Friedman in his book "The World Is Flat" America's dirty little secret is that we've allowed the last several decades of our public education to allow children to dictate what they should learn and how much "homework is fair".  In America if you're one in a Million you stand out.  In China, if you're "One in a million" there are 1,300 people just like you."

So where does this put social responsibility for a corporation?  Remember there's an economy in hiring the kid next door too.  Not only do you educate locally but the moving expenses are less.  I believe that social responsibility includes education.  If we teach little Johnny and Mary the skills to compete in a global market, perhaps we won't be bailing them out when their company outsource to a lower cost labor market.

But the social responsibility goes both ways.  If you're going to get the good-will for what you're doing abroad you should also be responsible locally for the consequences of your actions.  This past week Bill Gates sat before a congressional committee asking to do away with H-1B restrictions.  While this would avail him of lower cost labor it also would allow easier displacement of some of the last 20 years of computer science majors.

http://www.boston.com/business/technology/articles/2007/03/08/gates_end_limits_on_h_1b_visas/

I believe that large corporations have taken on the convenient part of the adage "Think locally, act globally".  Social responsibility entails more than just throwing money at a problem.

Bob Lee

 

Post #352045
Posted Friday, March 16, 2007 7:01 AM
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There are two general types of areas typically included in the term 'social responsibility'. One is not doing harm to one's locality, staying well within the law on safety, pollution, financial dealings, etc. The answer to this is obviously yes.

Regarding doing extended 'good deeds' , however, a corporation should be following its charter. Period.

If that charter includes 'philanthropic' works, fine. Individuals can always invest in charitable corporations/charities as they desire. But a corporation should be minding it's own business.

 

 



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Post #352053
Posted Friday, March 16, 2007 7:17 AM
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As was posted above, I think a company should follow it's charter. I personally would prefer to invest in a company that spent no money at all on charity and whatnot. The money they aren't spending on charity could then be paid to the shareholders who could use the money as they see fit. I could send it to the charity of my choice rather than the charity chosen by the board of directors.
Post #352059
Posted Friday, March 16, 2007 7:37 AM
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Don't make this too complicated by personifying our human altruism into some sort of corporate "personailty". There is no ethic for a company other than what is required by law, what will maximize it's profit for shareholders, and what is contained in its corporate charter. If the corporation is doing anything outside this boundary it is being unethical in that it is violating the trust of its investors.

If corporate officers want to give money away because it makes them feel good and it has no direct or indirect benefit to the company and it is not contained in the corporate charter, this is unethical theivery. Let them give their own money away to make themselves feel good.

Now, it could easily be argued, and I think successfully, that targeted giving is of direct benefit to the company in that it makes for a more committed customers. Additionally, some companies have matching plans where the employee donates money to a charity and the company matches it 1 for 1 or at some other ratio. This has the effect of promoting employee dedication to the company - something that is a big benefit for the company. We've seen evidence of this in a previous posting.

Thus, for Microsoft to be giving money away, either its corporate charter says it has a corporate purpose in doing so or its management has determined that giving this money away will maximize its profit for shareholders by getting positive PR and increasing product usage. Don't however mistakenly personify their altruism beyond these goals.

Post #352068
Posted Friday, March 16, 2007 7:40 AM


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Social Responsibility can and does save the "life" of a corporation. I don't think there is any question what would have happened with Johnson & Johnson had they not had a corporate code of ethics and followed it when the Tylenol crisis hit in 1982.

For the younger folks, here's a link if you aren't familiar with the incident:
The Tylenol Crisis: How Effective Public Relations Saved Johnson & Johnson



Bryant E. Byrd, BSSE MCDBA MCAD
Business Intelligence Administrator
MSBI Administration Blog
Post #352070
Posted Friday, March 16, 2007 7:47 AM
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What better, more socially responsible function can a company perform than to give somebody a job?
Post #352074
Posted Friday, March 16, 2007 7:58 AM
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Martin,

I'm going to dance with your words a bit here to reinforce my post above.

I prefer to consider it an exchange of value for service rather than the "gift" of a job.  Maybe too many years as a contractor but I think that you exchange labor for compensation at a company and Jobs are not something to be given.

Companies who give a job to an individual must not expect anything in return or it's not a gift. 

What I'm talking about are Companies reinvesting in the educational institutions of their local communities.   This improves the value of the community, the compositeness of the people who work and live near their place of employment, increases property values etc...  US companies are investing more in foreign philanthropy because there's more bang from the buck.

 

 

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