Corporate philanthropy is the act of promoting welfare of others by an organization generally through charitable donations of time and funds (Muller et al., 2014). It is an extremely important business function, which assists in supporting community, fostering employee engagement and generates higher business value. Corporate philanthropy and corporate social responsibility (CSR) is closely related term. However, there is some difference between these two. Corporate philanthropy only deals with donation for community development, whereas, CSR deals with both donation in the community and other issues of the community (Marquis & Tilcsik 2016). Corporate philanthropy is intended to remove the social pain of the community from cash or non-cash contribution. On the other hand, this business practice is also important for building corporate image of an organization.
This research study will focus on need for corporate philanthropy. Moreover, for the convenience of the research, this research study will choose Kohl’s Corporation of USA. The research objectives and questions will be framed for extracting the importance of corporate philanthropy in an organization.
Kohl’s Corporation is the departmental store retailing chain in America. The first store of Kohl’s was opened in 1927. However, the first departmental store was opened in 1962. While considering the retail sales, kohl’s corporation is the second largest retail departmental store in the United States (Kohls.com, 2017). The organization offers clothing, furniture, footwear, beauty product, bedding, jewelry, housewares and electronics. The organization offers its products at affordable price as per the affordability of all types of customers. It is always intended to offer quality products to the customers. As per the survey of 2014, Kohl’s have revenue of almost $19.031 billion (Kohls.com, 2017).
Over the years, various retail organizations have engaged in corporate philanthropy practice for establishing their brand image in the market. Organizations mostly offer grants and financial support for the community development. Therefore, it is highly possible to get community support during corporate crisis. On the hand, organizations can enhance employee morale through allowing volunteering time for the employees towards community development (Gautier & Pache, 2015). Therefore, having corporate philanthropy is extremely important for having enhancing employee morale. Furthermore, assisting community though non-cash support and facilities create positive emotion among the people regarding the organization (Cuypers et al., 2015). This research study will highlight needs of corporate philanthropy in an organization. Therefore, organizations will likely be interested in practicing corporate philanthropy in their business.
Last year, the charitable contributions by US companies have been fallen by 14.5% in real dollars. Therefore, it can be said that corporate philanthropy is in decline. As per, Hbr.org, (2017) opined that over the last 15 years, corporate philanthropy by mean of percentage of profit has been dropped by 50%. Most of the US based organizations are more inclined on gain short-term profit rather than focusing on long-term profit (Sz?cs et al., 2016). Therefore, they are neglecting the importance of corporate philanthropy. However, this inclination is actually hampering the profit level of the organizations in long-term basis. While considering Kohl’s corporation, it can be said that the organization is now less interested practicing corporate philanthropy. However, it has resulted in less sales volume and market share for the organization from 2012 to 2013. Moreover, the market share is also going on in this ratio for the further years.
Research Aims and Objectives
The aim of the research will explore the need of corporate philanthropy for long-term sustainability of an organization.
- To explore the need of corporate philanthropy in an organization
- To identify the ways towards practicing corporate philanthropy
- To identify the issues related to corporate philanthropy towards its successful implementation
- To assess the relationship between corporate philanthropy and corporate sustainability
- Why corporate philanthropy is important for an organization?
- How organizations can practice corporate philanthropy?
- Why organizations face issues in practicing corporate philanthropy?
- How corporate philanthropy and corporate sustainability is related to each other?
Concept of Corporate Philanthropy
Corporate philanthropy is the ways in which organizations usually try to achieve positive social impact through community development. Organizations mostly rely on strategic and generous utilization of financial resources, employee volunteering time, their own products and service and other facilities towards practicing corporate philanthropy. All the activities of corporate philanthropy are actually intended for community development. According to Tonin and Vlassopoulos, (2014), strategically executed and well-established corporate philanthropy programs have tremendous benefits on any organizations. The benefits are mostly received from public relation standpoints and have direct impact on bottom line of the organizations. On the other hand, Liket and Simaens, (2015) opined that corporate philanthropy supports the worthy causes of the society and tries to remove the social issues from their roots. Moreover, supporting worthy causes assists an organization towards buffing up its image and receiving valuable networking opportunities. Moreover, while corporate philanthropy costs an organization, it benefits the organization, employees and community.
Types of Corporate Philanthropy
Organizations can handle their charity giving programs either through creating foundation or internally. Through community grant programs, organizations usually try to support the needs of local community. Walker and Kent, (2013) pointed out that US retail organizations provide grants for supporting the social needs and improving the quality of society. As per Chen and Huang, (2016), eligible organizations apply for community grants and submit the grant request by explaining the ways of fund utilization.
Employee Volunteer Grants
In this program, organizations offer monetary donations to the non-profit organizations for recognizing the employees towards volunteering community development activities. In team volunteer program, organizations usually offer monetary donations for organizing volunteer events. It can be seen that Walmart has offered $500 volunteer grant to the non-profits towards initiating employee volunteering time (Kabongo et al., 2013).
Employee Matching Gifts
In employee matching gift program, organizations match donations made by employees to the non-profit organizations. Organizations usually match to all schools, cultural organizations, community organizations, health and human service organizations and other non-profit organizations.
Corporate sponsorship defines the form of advertising in which organization pays for associating with certain attractions and events (Morris et al., 2013). Moreover, these events are always associated with social causes and corporate sponsorship builds corporate image in the market.
Non-cash contribution includes the contribution by means of equipments, time and other supplies. These contributions may include furniture, old computers, office services and supplies. Through this contribution, organizations can take initiatives towards community development.
Theory of Corporate Philanthropy (Carroll’s Model of Corporate Social Responsibility)
Carroll’s CSR model defines four layered pyramid for an organization towards community development and maintaining transparency in the business.
According to Dai and Kong, (2016) this responsibility is inclined towards providing adequate and attractive return on investment to the investors. Therefore, organization should be adequately profitable for maintaining good relationship with the investors. On the other hand, Schnurbein et al., (2016) opined that organizations make sound strategic decision for maximizing profits and minimizing cost for contributing towards economic responsibilities.
As per Ke et al., (2015), organizations need to adhere to all regulations and laws for remaining transparent in the business. These laws and regulations include consumer laws, environmental laws and employee protection law.
Ethical responsibilities go beyond the legal responsibilities. As per the previous researchers, it is the obligations for doing the right and fair things. The motive is to minimize the harms to the stakeholders of the organization.
According to Hogan et al., (2014), Philanthropic responsibilities are associated with giving back to the community towards its development. In this responsibility, organizations usually contribute financial resources and other forms of non-cash resources for improving the quality of community life.
Significance of Corporate Philanthropy
Having corporate philanthropy, organization offers grant and financial support to the local non-profit organization for developing the community. According to Bartkus and Morris, (2015), local non-profit organizations are able to afford adequate programs and supplies through corporate philanthropy of large corporation. Without the help of large corporation, these local non-profit organizations might go unfunded. On the other hand, Rao et al., (2013) opined that volunteering employee time by large organizations, supplies adequate manpower towards community development. Depending on the types of helps through corporate philanthropy, the efforts can result in cleaner community, developed economy and more opportunities for residents.
Through emphasizing on public service and volunteerism, an organization can boost its employee morale. It is possible, when the employees highly value the concept of giving back to the community. As per Husted, (2015), employees can get know each other beyond their typical work areas through working on a particular charity project. It fosters team bonding of the employees and enhances their morale. On the other hand, Bartkus and Morris, (2015) pointed out that employees are likely to work hard for the organizational success, when they feel a sense corporate giving from the part of their organization.
Corporate Image and Market Reputation
Through spreading corporate philanthropy, community develops a good impression about the organization. According to Dai and Kong, (2016), people tend to view corporate philanthropy as favorable practice, as it develops community. In this way, positive image of an organization can encourage the people to use the products or services of that organization. Therefore, corporate philanthropy can bring competitive advantage through strong market reputation. On the other hand, Chen and Huang, (2016) opined that corporate image created by corporate philanthropy can also foster word-of-mouth for an organization though minimizing advertising cost.
Organizations are more likely to attract investors through corporate philanthropy, while it gains favor of the public. Qian et al., (2015) opined that corporate philanthropy represents financial stability and strength of an organization. Therefore, more numbers of investors become interested to invest in the organization having increasing numbers of corporate philanthropy practice.
Link between Corporate Philanthropy and Corporate Sustainability
Over the years, the sustainability approaches of USA organizations have been evolved through community engagement and corporate philanthropy practices. This integrated approach highly focuses on long-term value for stakeholders and community. Through community development, organizations can build strong brand image and public support. Therefore, product or service preferences of philanthropic organizations are gradually increased within the customers. It ultimately increases the sales volume of the organization and makes stable profitable condition for the organization. Kabongo et al., (2013) pointed out that through the practice of corporate philanthropy, organization are likely to remove the social issues from their roots. Moreover, the organizations often allow employee volunteering time towards community development. In this way, philanthropic organization can enhance employee morale. Therefore, the work efficiency level of the employees is enhanced and the organizations are more likely to enhance their productivity,
Through corporate philanthropy programs, the organizations can gain high public favor and make unique value in the market. Moreover, according to Tonin and Vlassopoulos, (2014) this practice also highlights the financial and profit level stability of an organization. Therefore, investors become highly interested towards investing in such philanthropic organizations. In this way, corporate philanthropy enhances the financial strength of an organization.
Research approach assists in assembling relevant and authentic information regarding the particular research area. The selection of research approach is highly dependent on research variables and the topic of the research. Two types of research approaches can be used for conducting the research study namely inductive and deductive research approach. Inductive research approach is related to generation of new models and theories (Choy, 2014). New theory generates new types of data related to research areas. Empirical generalization of the information is done through inductive research approach. On the other hand, deductive research approach assists in using previous theories and models related to the research topic. It reduces the time and budget for completing the research study. However, since this research study is based on qualitative research study, deductive approach will be chosen. The information will be analyzed and re-analyzed several time for getting quality outcome of the research study.
Research purpose helps in effectively understanding the research topic, which in turn assists in gathering relevant information regarding the research variables. Effective research purpose assists in gathering in-depth knowledge regarding the research topic. Research study can be conducted through any of the three research purpose namely exploratory, explanatory and descriptive purpose. Exploratory research purpose assists in identifying background of the research and lays the groundwork for the future research purpose (Farooq & O'Brien, 2015). Moreover, it also identifies the social caused behind the research study. On other hand, explanatory purpose assists in identifying the relationship among different research variables. Moreover, explanatory purpose assists in connecting the ideas between the cause and effect of the research study. Furthermore, descriptive purpose has mixed approach and helps in gaining actual purpose of the research study. Descriptive research purpose will be chosen for this research study.
Research strategy can be defined as the strategy, which is used for collecting accurate information about the research topic. Various types of research strategies are available for conducting the research study namely “focus group”, “case study”, “interview” and “survey”. Case study and interview strategy will be used for conducting this research study, as it is based on qualitative research study. In this case study strategy, various important case studies regarding the selected sample organization will be chosen. It will help in gathering authentic information regarding the corporate philanthropy of the organization (Lather & St. Pierre, 2013). On the other hand, effective interview will be arranged with the organizational heads of the selected organization for gathering philanthropic strategies of the organization.
Data Collection and Sample Selection
Data collection is an extremely important method for collecting relevant information regarding the research method. Both primary and secondary methods are important for collecting authentic information regarding the research study. It is highly important to investigate various journals and articles towards building an effective literature review (Farooq & O'Brien, 2015). Secondary information can best be collected through authentic journals, articles, websites and books. However, for collecting the primary data, primary method of data collection will be selected in this research study. Primary information can be collected through quantitative and qualitative technique.
Quantitative technique provides information, which is quantifiable. On the other hand, qualitative technique provides subjective data about the research study. Moreover, in primary method, qualitative technique will be used for collecting relevant information of this particular research study. In this technique, the organizational heads of Kohl’s Corporation will be chosen. These organizational heads will be interviewed for collecting information regarding the corporate philanthropy performed in the organization. The subjective viewpoints of the organizational heads will be effective for conducting this research study.
5 managers of Kohl’s Corporation will be selected as the sample size of this research study. These 5 managers will be interviewed effectively for collecting authentic information regarding the corporate philanthropy of this organization.
Data analysis is an important method for converting the general information to specific information. It can be effective used for extracting the valuable information from the collected data. Therefore, effective data analysis is highly important towards enhancing the quality of the research outcome. Axial coding method can be used for analysis the collected data of this research study. Through axial coding, the core theme qualitative data will be disaggregated. Moreover, this analysis will also highlight the relationship between the core themes of the qualitative data.
Direct questions will be asked to managers about the necessity of corporate philanthropy. It is expected that from the managers the need of corporate philanthropy will surely indicate community benefits and developing employee morale. Other necessities such as creating brand value, corporate image and investor attraction may also be highlighted. While analyzing the ways to practice corporate philanthropy, it may be identified that Employee Matching Gifts, Corporate Sponsorship and Non-cash Contribution will be the three most common methods. This is because the managers will surely highlight the ways that they practice for enhancing corporate philanthropy and the above mentioned ways the most common. Finally, while considering issues related to corporate philanthropy, it may be identified that disagreement among the corporate stakeholders and fluctuating revenue earning will be the two factors hampering corporate philanthropy.
While considering the expected outcome, it can be said that qualitative technique will be extremely useful for the research. This is because only interview questions will be set up for the managers in the organization who will participate in data collection. Same questions will be asked to each manager and based on that the collected response will be analyzed. Primary data collection method through qualitative technique will be used and the tools that will be required are deductive research approach and descriptive research purpose. This is because interview method is the most applicable for deductive research approach. No new models will be created but the strength of this approach will be to identify new recommendations that will be suitable for the organization based on theories and models identified in literature review section.
Interview method will be most usable as direct descriptive answers from the managers will be received and the keywords that are common or most used phrases in the responses will be represented in graphical format. This method will show the graphical representation of the keyword frequency. Based on each keyword, further analysis will be done according to axial coding method. Thus, the responses will be evaluated against the most common keywords and further recommendation will be placed. Therefore, it can be said that axial coding will be best suitable for qualitative data analysis as frequency illustrations will depict the interrelationship between the open codes or keywords, which will be placed in a form of table. Analysis of each research question will be done and best outcome will be presented.
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