Corporate social responsibility

Case study

Suzanne Valentine had been noticing an increasing number of businesses asking their customers to donate to charities when they make a purchase, a practice known as checkout charity or point of sale fundraising. One example was the Shoppers Drug Mart “SHOPPERS LOVE. YOU” campaign, which encourages customers to purchase a leaf for $1, a butterfly for S5, an apple for $10 or a bird for $100. All proceeds go directly to the women’s health organizations chosen by each Associate-owner, best reflecting local community needs. Over the past five years, $57 million has been contributed to local, regional and national women’s health initiatives.

Many other corporations have similar programs including Indigo, Loblaw, Walmart, and McDonald’s. Even former Governor General David Johnston’s “My Giving Moment” encourages participating in such programs.

Suzanne was directly affected by this type of corporate social responsibility fundraising. She worked part-time as a cashier at her neighbourhood grocery store where the owner established a donation scheme, “Pennies for Pets.” The owner was a strong supporter of animal causes and the donations were to support the local animal shelter. All cashiers were instructed to ask customers if ther wanted to donate $1 or $2 to the shelter.

Suzanne followed instructions but she had several reservations about the scheme. She felt awkward asking customers for the donation, particularly those who looked like they could not afford it. Some customers might be intimidated by the request and she did not believe that they should be put on the spot to say yes or no. Some customers may not wish to support this particular charity. As well, she was not convinced that the particular shelter deserved funding, as there had been some articles in the media about its poor management and treatment of animals. Lastly, she was not sure how much of the money collected was forwarded to the charity, and whether or not the owner matched the customer donations.

Questions

  1. What are the ethical implications in this example of corporate social responsibility?
  2. What information should the company provide to Suzanne and its customers?
  3. Carroll has identified four corporate social responsibilities: economic, legal, ethical, and philanthropic. Which responsibilities are involved in “Pennies for Pets” or similar fundraising schemes?
  4. How should Suzanne resolve her personal ethical dilemma?
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Sample Answer

The ethical implications in this example of corporate social responsibility are complex. On the one hand, it is commendable that the grocery store owner is supporting a local animal shelter. However, there are several ethical concerns that need to be considered.

First, it is important to ensure that customers are not being pressured to donate. This is especially important for customers who may be on a tight budget or who may not wish to support the particular charity. The company should make it clear that customers are not obligated to donate and that they can decline without any pressure.

Second, the company should provide clear information about the charity that is being supported. This includes information about the charity’s mission, its track record, and how the money will be used. Customers should be able to make an informed decision about whether or not to donate based on this information.

Third, the company should ensure that a significant portion of the donations are actually forwarded to the charity. There have been cases in the past where companies have pocketed a large portion of the donations, leaving very little for the charity. The company should be transparent about how much of the donations are going to the charity and how much is being used for administrative costs.

 

Full Answer Section

In terms of Carroll’s four corporate social responsibilities, “Pennies for Pets” or similar fundraising schemes involve both economic and ethical responsibilities. The economic responsibility is to ensure that the company is making a profit. The ethical responsibility is to ensure that the company is operating in a way that is fair and just. In this case, the company needs to ensure that customers are not being pressured to donate and that the donations are actually going to the charity.

Suzanne should resolve her personal ethical dilemma by speaking to the grocery store owner about her concerns. She should explain that she feels uncomfortable asking customers for donations, especially those who look like they cannot afford it. She should also express her concerns about the charity’s reputation. If the owner is not willing to address her concerns, Suzanne may need to decide whether or not she can continue working at the grocery store.

Here are some additional information that the company should provide to Suzanne and its customers:

  • The name and contact information of the charity that is being supported.
  • The charity’s mission statement.
  • The charity’s track record.
  • How the money will be used.
  • The percentage of donations that will go to the charity and the percentage that will be used for administrative costs.
  • A way for customers to opt out of the donation request.

By providing this information, the company can help to ensure that customers are making informed decisions about whether or not to donate.

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