For Baking Company, Inc., a privately owned corporation, 2015 was a terrific yea
ID: 1109524 • Letter: F
Question
For Baking Company, Inc., a privately owned corporation, 2015 was a terrific year, by far and away the best year in its history. Its cakes and cookies, which were initially sold locally, are now sold internationally and are flying off the shelves. It seems people especially favor sweets as a relatively inexpensice treat in a tough economy. Baking Company's three owners -- Hugh, Doug, and Kathy, friends from college -- inform the Baking Company's Directors that they want $300,000.00 of th ecorporation's 2015 revenues to be given back to the community in some appropriate way. They ask the Directors for proposals and for rationales for their proposals. In respone, the Directors come up with the following two proposals:
Proposal 1: Spend the entire $300,000.00 to pay the sponsorship fee for being a 2017 sponsor of a popular Walk Away Hunger fundraising event. In exchange for the sponsorship fee, Baking Company's name will be used in all of the event's massive promotional and advertsing materials.
Proposal 2: Make 10 gifts of $30,000.00 each to local, national, and international organizations with proven track records of getting food to those who need it most. Little, if any, publicity will result form this alternative, but the company could be certain that hungry people were being fed with its money.
You are the director tasked with explaining to the owners the ethical implications of each of the above proposals. In your answer, focus on a discussion of the rival views of corporate social responsibility and of the proponents of these views, as well as a discussion of which proposal you would recommend and why.
Be careful that you don't just give your opinion or answer this question solely from a marketing point of view.
Explanation / Answer
The baking company which used to sell in local market has expanded to the national and international arena. This has led to masive raise in the profits. Now the company want to give back to the society. The Two proposals are being put forward by the directors. It is to be reminded that the company is into food business and wants wider acceptance across borders.
Proposal 1:
To spend for the walkaway hunder fund raiser which will give wide publicity to the company.
Pros:
a) It will give wider publicity to the company.
b) It will increase the good will among the people and creates positive perception among people.
c) As it is hunger walkathon, it further raises the funds whihc can be used for hunger reduction. This will achieve the intended social responsibilities of the company.
d) company is helping to creating awareness among citizens on hunger.
The rival views of corporate social responsibility propounds that the companies have already providing goods and services for the society. There by there is no need for Special CSR activities. Companies need to promote themselves for wider visibility thus spreading their services. In this context the walkathon is a better opportunity for the company.
Cons:
a) company has global foot prints while the walkathon is limited to a location.
b) The concerns of the company to help the society is not met directly.
c) The markets beyond the location of walkathon may not know the companies activities. this will not fulfill companies objectives.
d) the publicity and creation of good is limited to only certain geographical area.
CSR need to seen in a ethical perspectives where there is obligation for each entity to give back to society. For the success or patronage they received from society. This obligation has to go beyond balance sheets and marketing strategies. So companies need to do what matters for the people as a part of CSR.
Proposal 2:
Make 10 gifts of $30,000.00 each to local, national, and international organizations with proven track records of getting food to those who need it most. Little, if any, publicity will result form this alternative, but the company could be certain that hungry people were being fed with its money.
Pros:
1) The company is fulfilling the ethical responsibilty towards society.
2) It is directly adressing the issue.
3) It will have impact on several hunder ridden people. This will help in empowering the people there by energyzing the societies.
4) The company will have good will beyond borders.
5) Genuine apprecialtion will be pondered once this activity of the company is known.
Cons:
1) Very little publicity for the company.
2) In marketing perspective return on investment is very low and may not increase the sales in short run.
After careful examination of the two proposals it is advisable for the company to consider Proposal 2. Because the company has genuinely considering the CSR activity to help the needy. The activity is spread across borders. This will help in creating good will about company internationally. The company will be respected and was considered responsible. This will help in sustainability of the company in long run. which eventually leads to success of the company.
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