Download The Corporate Social Responsibility of Pure-Play Sites vs Brick

The Corporate Social
Responsibility of
Pure-Play Sites
versus
Brick-and-Mortar Corporations
By
Juliana Muñoz and Dr. Johnny Snyder
Mesa State College
Abstract


The goal of this paper is to begin to
compare the relationships between brickand-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



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The terrorist attacks of 9/11
The Asian Tsunami of 2004
Hurricane Katrina in 2005
The South Asian Earthquake of 2005
Introduction: Frequency
EM-DAT (2006)
Who was there to help?
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
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
So?

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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?

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.

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
A direct impact on a
community, society and
economy surrounding a corporation
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
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
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

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?
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.
Carroll’s
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

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
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Focus shifted from
profit making
Possible
dissatisfaction of
shareholders
Could be seen as
utilizing misfortune
for press
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Buttons divert
traffic from site
Customer focus is
shifted from buying
Could be seen as
utilizing misfortune
for press
Benefits
Brick-and-Mortar vs. Pure-Play
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Helps employees
Helps community
in which embedded
Promotes company
name in positive
manner
Giving entails:
• Employee time
• Cash contributions
• In-kind
contributions
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Promotes company
name in positive
manner
Giving entails:
• Employee time
(minimal)
• Addition of a button
to a web site
• Web page space
(minimal)
Largest Corporate Contributors to
Katrina
Alexa (2006)
Pure Play Companies Contribute
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By enabling the e-consumer to
contribute
By facilitating easy payment options
• Pay-Pal
• Credit Card
• eGold
• gBuy
Users Want to Donate
Search term on Google Trends “Hurricane Katrina Donate”
Google Trends, 2006
Online Contributions
How Much Charities Raised Online
Millions of US$
3500
3000
3000
2500
1900
2000
1435
1500
1025
1000
500
525
192
0
1999
2000
2001
2002
2003
2004
Year
Pearlstein (2006, February)
Contributions of Pure-Play Sites
American Red Cross Disaster Fundraising
60%
1670
1600
50%
Millions of US$
1400
1200
1078
40%
1000
30%
800
568
600
20%
400
10%
200
Percent Raised Online
1800
8.3
0
0%
2001 - 9/11
Terrorist Attacks
2004 - Asian 2005 - Hurricane 2005 - South
Tsunami
Katrina
Asian
Earthquake
Year - Disaster
Pearlstein (2006, February)
The Effect on Brick-and-Mortar
Websites
Alexa (2006)
Increased Page Views
Rank Spikes due to Hurricane Katrina
Alexa (2006)
News – Before and After
Hurricane Katrina
Site
8/22 Unique
Audience (000)
8/29 Unique
Audience (000)
Growth
Advance Internet
516
1395
170%
ABCNews Digital
486
1102
127%
MSNBC
3181
6532
105%
WorldNow
558
1086
95%
Fox News
1106
2037
84%
Weather Channel
4482
7736
73%
AOL News
1833
3126
71%
AccuWeather
622
961
55%
Internet Broadcasting
1474
2140
45%
CNN
4817
6917
44%
Nielsen//NetRatings (2005).
The Effect on Pure-play Sites
Hurricane Katrina
Post Holiday Slow down
South Asian Earthquake
Alexa (2006)
Costs?
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Search engine placement: $500.00
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Click through advertising: $2.15/click
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A button on Google’s home page:
- priceless
Google’s Pioneering Effort
Conclusion
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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)
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“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 for coming to the talk.
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Questions?
References
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Alexa (2006). Alexa Web Search. Retrieved 7/3/2006 from:
http://www.alexa.com/#
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Bhatnagar, P. (2005). Wal-Mart closes 123 stores from storm.
CNN Money.com.
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Retrieved January 21, 2005 from
http://money.cnn.com/2005/08/30/news/fortune500/katrina_reta
ilers/?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.
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EM-DAT (2006). Trends and relationships for the period 1900 – 2005.
Retrieved June 16, 2006 from: http://www.emdat.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
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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-katrinacorporate-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 Cont.
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Porter, M. (2001). Strategy and the Internet. Harvard Business Review
79(3), 63-78.
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Porter, M. & Kramer, M. (2002). The competitive advantage of corporate
philanthropy. Harvard Business Review, 80(12), 56-68.
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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
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Turban, E., King, D., Viehland, D., & Lee, J. (2006). Electronic Commerce
2006: A Managerial Perspective. Upper Saddle River, NJ: Prentice Hall.
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Vise, D. & Malseed, M. (2005). The Google Story. New York: Delacorte
Press.
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Wood, D. (1991). Corporate social performance revisited.
of Management Review, 16, 691-718
The Academy