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The Community and the Corporation

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Title: The Community and the Corporation


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2
The Community and the Corporation
Chapter
17
  • The Business-Community Relationship
  • Community Relations
  • Corporate Giving
  • Corporate Giving in a Strategic Context
  • Building Collaborative Partnerships

3
The firm and its communities
Figure 17.1
  • Site community
  • Geographic location of a companys operations,
    offices, or assets
  • Fence-line community
  • Immediate neighbors
  • Cyber communities
  • People who use the Internet to learn about the
    company
  • Communities of interest
  • Groups that share a common interest with the
    company
  • Employee community
  • People who work near the companys facilities

4
What the community and business want from each
other
Figure 17.2
  • Business Participation Desired by Community
  • Pays taxes
  • Provides jobs and training
  • Follows laws
  • Supports schools
  • Supports the arts and cultural activities
  • Supports local health care programs
  • Supports parks and recreation
  • Assists less advantaged people
  • Contributes to public safety
  • Participates in economic development
  • Community Services Desired by Business
  • Schoolsquality educational system
  • Recreational opportunities
  • Libraries, museums, theaters, and other cultural
    services
  • Adequate infrastructure
  • Adequate transportation systems
  • Effective public safety services
  • Fair and equitable taxation
  • Streamlined permitting
  • Quality health care services
  • Cooperative problem-solving approach

5
The business case for community involvement
  • Civic engagement
  • The active involvement of businesses and
    individuals in changing and improving
    communities.
  • Reasons for community involvement
  • To act in a socially responsible way.
  • To win local support for business activity.
  • Helps to build social capitalthe norms and
    networks that enable collective action.

6
The importance of community relations
  • Center for Corporate Citizenship study
  • 80 of companies now include a statement in
    their annual report on their commitment to
    community relations.
  • 78 of companies have a written policy or
    mission statement for their community relations
    program.
  • 65 of companies factor community involvement
    into their overall strategic plan.

7
The 10 most critical social issues facing
communities
Figure 17.3
  1. Education (K-12)
  2. Economic development
  3. Health care
  4. Environmental issues
  5. Literacy
  6. Education (higher)
  7. Transportation
  8. Housing/job training (tie)
  9. Child care
  10. Unemployment

Source Kathleen Witter, Community Involvement
Index 2003 (Boston Center for Corporate
Citizenship at Boston College, 2003), p.2
8
Corporate involvement in the community
  • Economic development
  • Crime abatement
  • Housing
  • Welfare-to-work job training
  • Aid to minority enterprises
  • Disaster, terrorism, and war relief

9
Three kinds of corporate philanthropy
  • Cash
  • In-kind contributions
  • Volunteer time

10
Philanthropy in the United States (by source of
gift, 2002)
Figure 17.4
5.1
11.2
7.5
76.3
Total 240 billion
Source AAFRC Trust for Philanthropy, Giving USA
2003, p. 8.
11
Corporate contributions in the United States(as
a percentage of pretax net income, 1964-2002)
Figure 17.5
12
Priorities in corporate giving (percentage of
corporate cash and in-kind contributions to
various sectors)
Figure 17.6
16.5
8
12
81.9
31.6
Source Sophia A. Muirhead, Corporate
Contributions in 2001 Executive Summary (New
York The Conference Board, 2002), p.8.
13
Strategic philanthropy
  • Strategic philanthropy
  • Corporate giving that is linked directly or
    indirectly to business goals and objectives. In
    this approach, both the company and society
    benefit from the gift.

14
Strategic contributions
  • Areas in which corporate contributions are most
    likely to enhance a companys competitiveness
    (Harvard Business Review study)
  • Factor conditionssuch as the supply of trained
    workers, physical infrastructure, and natural
    resources.
  • Demand conditionsthat affect demand for a
    product or service.
  • Context for strategy and rivalry. Company
    donations sometimes can be designed to support
    policies that create a more productive
    environment for competition.
  • Related and supporting industries. Charitable
    contributions that strengthen related sectors of
    the economy may also help companies.

15
Strategies to help companies get the most benefit
from their contributions
  1. Draw on the unique assets and competencies of the
    business.
  2. Align priorities with employee interests.
  3. Align priorities with core values of the firm.
  4. Use hard-nosed business methods to assess the
    impact of gifts.
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