Philanthropy concerns both the business community and general public. The global financial crisis has given rise to public concerns such as executive overpay, excessive risk-taking, moral hazard of financial implications and others. Philanthropy is used both in the academic circle and the practical world of business. This study shall address the notion of philanthropy that leads to the success or downfall of US businesses.
The problem to be addressed by this study is the social issues encountered as an act of philanthropic activities in the US businesses. According to Mauldin (2017), the US have met a socio-economic crisis as the middle class have less buying power. The economic and financial crisis has also resulted with the lack of funds that is usually needed to deal with the business activities to contribute in the philanthropic activity. The lack of funds that has resulted in the financial issues in all the social welfare activities has resulted in the worsening the contribution US companies to follow the guidelines of the business activities.
The purpose of this qualitative deductive study is to highlight the philanthropic expansion for the business in US. The global depression and rise of various other international competitors such as UK have been giving a strong competition to the business houses in US. Thus, the philanthropic activities have taken a back seat in the recent times. The research study firstly identified that statement of problem after which objectives were established.
This research study is based on the analytical framework where the complex topic is broken into multiple substances for better understanding. As identified, the US is facing significant issues such as lack of funds that can be analyzed separately for every business. Mainly, the research study shall analyze the philanthropic activities undertaken by US businesses that are impacting the economic condition adversely while improving the social welfare. The analytical framework shall guide the research as recommendations can be made for the US businesses so that the financial crisis can be reduced.
In this particular research, the researcher will be using Interpretive research philosophy. The secondary research will be conducted based on mono-method research design as it uses qualitative research design. Researcher will be selecting deductive approach for the present research study. These methods and designs are suitable for studying the philanthropic expansion of US businesses as it can be based on the previous studies in other countries such as UK (Hadani & Coombes, 2015)
This research study aims to answer the following research questions:
RQ1.What are the factors that hinder philanthropic expansion in US business?
RQ2. What are the benefits of philanthropic activities in US business?
RQ3. What recommendations will ensure the philanthropic activities have a steady growth?
The current research topic aims to highlight upon the cause of lack of the philanthropic activity and the funds that are being allocated by the US companies to deal with the increased social issues. With the new issues rising within the business environment of US, it is important to for the companies to adopt of the policy of smart contribution within the philanthropic activity that can also be done with the use of the latest modes of technology. This research is significant for the corporate as they need to realize the wider and long-term impact of their philanthropic actions on the overall economic condition. The results obtained in this research shall further help the PhD studies to analyze the reasons behind lack of philanthropic activities and what are the possible corrective measures that can be taken to improve them. This research shall be beneficial for the companies and institutions to identify the causes of problems and plan the corrective measures accordingly. By the end of the research one shall be able to identify the possible cause of difference between economic and social welfare of the country. The same shall be helpful in bringing both the aspects of the society at same platform and decreasing the gap between various sections of the society (Kabongo, Chang, & Li, 2013).
Philanthropy- Philanthropy is a Greek word which in English means the love for mankind. As per this meaning, Philanthropy implies the activities of the businesses focused on delivering something to the society which would benefit it without having any profit motive. It can be done in forms of charity in cash and/or kind, volunteering for certain social cause etc (Liket and Maas2016).
Financial Crisis – financial crisis typically is the situation in which the normal value of the assets of the firm drops at a great speed. It thus becomes an event of panic for the business for they run out of assets and/or funds to back their businesses. In such situations, the businesses usually run to the financial institutions to raise funds and continue and revive the operations of their company (Erkens, Hung and Matos, 2012).
The topic focuses on the concept of philanthropy expansion of businesses in the United States. The expansion of charity or patronage is a significant aspect of the corporate social responsibility. It allows for supporting the communities and enables the consumers to make purchases of products and services from the companies, which have been functioning properly within the business environment. The corporate philanthropy expansion can lead to the formation of a good and robust culture, which can further result in the development of a healthy working environment where individuals can work with ease and efficiency. It is also essential for enhancing the level of involvement of employees and thereby creates a good image of the organization by developing more media coverage as well (Barkan, 2013). For the literature review a variety of journals, articles, books and scholarly report published in last 5 years were gone through.
The act of philanthropy in US has increased over the past years. There are several cases where the impact of philanthropy expansion can be seen such as Mark Zuckerberg, CEO of Facebook donated 99 percent of the shares of Facebook to a new charitable foundation for enhancing the scopes of health, wellbeing and education for children. It shows that the corporate philanthropy has not only benefited the society through charities but also has led to business growth and expansion in the United States of America (Bromley & Meyer, 2015). While some argue that the only objective of a business shall be to make profit while recent scholars suggest the corporate is also responsible for the environment and society it works in. Over the past few years many researchers and scholars have argued upon the benefit and usefulness of philanthropy for corporate (Vaidyanathan, 2012). There is a variety of literature available to conduct this study.
The themes that emerge out of the literature review are:
Strategic Philanthropy: the scholars believe that the corporate philanthropy is a cost effective mean of combating competition by the companies. They also argue that the philanthropic activities shall be in competence with the core value of the company (Koch, 2012)..
Employee volunteering: the employee volunteering programs prove to be beneficial for company’s social responsibilities. It helps in employee development, improved perception of the general public, positive impact on employee retention, and is a cost effective technique to train and develop skills of employees (Meyer & Bromley, 2013).
Reputation: the previous researches show a positive effect of philanthropy on the reputation of the companies. It boosts the moral capital of the firm which in turn increases its value in the market. It also indicates firm’s credibility, especially in certain specific industries where competition is high (Koch, 2012).
The research aims at highlighting the philanthropic expansion for the business in US. The philanthropic activities have declined recently due to increased competition and financial crises faced by the US companies. The secondary research will be conducted based on mono-method research design as it uses qualitative research design.
The research design that shall be used to conduct this research shall be exploratory and casual. The research aims to understand factors hindering the philanthropic activities in the companies. For the same it needs to conduct exploratory research. The causal research shall be conducted to understand the advantages of such activities (Masulis & Reza, 2014).. The descriptive research becomes less effective to conduct this study as in current scenario the result shall be different from existing studies (Gautier & Pache, 2015)..
The population shall include the largest 150 Fortune 500 companies in US which carry out philanthropic activities. There are largest companies in US and have huge turnovers to fund their philanthropic activities. Amongst these 150 companies, only top 25 generous companies shall form the sample for this research to analyze the benefits they derive from such activity. The data shall be recorded through public records, corporate reports and business magazines (Hadani & Coombes, 2015).
The materials required for this research shall be questionnaires and observation protocols that shall be check listed according to the information recorded through various sources of data. The result shall be then analyzed and recorded through statistical instruments and software (Sz?cs et al., 2016).
Operational definition of a variable can be termed as specific way that is measured in the particular study (Tilcsik & Marquis, 2013). The study measures the conceptual framework in a different way. The operational definition of the dependent variable considers being an important step at the time of designing the study. This study discusses the reliability or consistency, validity or accuracy of operational definitions (Cuypers, Koh & Wang, 2015).
Firstly, the observation shall be made in order to understand the cause of hindrance of philanthropic activities in the companies. Further the questionnaire shall be designed to analyze the benefits of philanthropic activities enjoyed by the top 25 companies. After concluding the two, based on empirical data, the recommendations shall be made to increase the philanthropic activities in the companies lagging behind (Tilcsik & Marquis, 2013).
The data shall be collected through a qualitative questionnaire and the data printed by the companies in their annual reports. The software that shall be used to analyze the data shall be Statistical Package for the Social Sciences and other financial tools and analysis methods. For qualitative data content and grounded analysis shall be conducted (Muller, Pfarrer & Little, 2014).
Assumptions for the research lie in the mindset with which a researcher plans the research. It is assumed that the qualitative research shall be inductive of the result. It is also assumed that the top 25 shall be representative of all other 150 companies as it is very difficult to survey all 150 companies and top companies shall be better to study the link between their success and philanthropic activities.
Due to time constraint, the researcher could not conduct in-depth analysis of the study that was otherwise possible. The researcher did not have enough financial resources for use of theoretical models and techniques in any way (Cuypers, Koh & Wang, 2015). To overcome these, the sample size was restricted and the most inclusive models were adopted.
To overcome the limitations of the study, the research was well planned in advance in order to go by the plan and achieve targets at every point and complete the research in given time. Another problem of big data was solved by including top 25 companies in the sample so as to analyze their activities and relate them to our problem.
The information is collected from a valid and reliable source. No data has been copied from the work of others. The reference has been provided in case of the adaptation and reference of the study taken from someone else’s reports and articles. The researcher played an important role in adhering from being biased towards the particular aspect of the study. This ensured the viability of the study (Cuypers, Koh & Wang, 2015).
The research aims at highlighting the philanthropic expansion for the business in US. The research was conducted on top 25 generous companies listed by fortune 500.
The result and data collected in highly trustworthy. The data is credible as it was concluded by effective methods of analysis, and is applicable in conducting further research on the similar topic. The data included does not involve personal responses of individuals but it restricted to authentic unbiased reports and articles.
The data reflects the positive relationship between the company’s philanthropic activities and it reputation in the society. This further affects the credibility and moral value of the firm in the market. Also the employees of the firm are positively affected by the philanthropic activities. The various hindrances to the philanthropic activities are the increasing focus of the companies on increasing the operations and profits of the firm to combat financial crises and competition.
Conclusions
The problem addressed by this study is the social issues encountered as an act of philanthropic activities in the US businesses. Mainly, the research study shall analyze the philanthropic activities undertaken by US businesses that are impacting the economic condition adversely while improving the social welfare. The analytical framework shall guide the research as recommendations can be made for the US businesses so that the financial crisis can be reduced. The literature review section provides relevant information and knowledge about the issues faced during the philanthropy expansion for US businesses along with the major activities that are part of this philanthropy expansion. While philanthropy has certain advantages, it also has certain disadvantages such as the lack of focus on profit making due to company’s dedication towards social welfare. The key benefits and disadvantages were analyzed which can serve as base for further research on the same guidelines. The literature review section provides relevant information and knowledge about the issues faced during the philanthropy expansion for US businesses along with the major activities that are part of this philanthropy expansion. While philanthropy has certain advantages, it also has certain disadvantages such as the lack of focus on profit making due to company’s dedication towards social welfare. The key benefits and disadvantages were analyzed which can serve as base for further research on the same guidelines. The research aims at highlighting the philanthropic expansion for the business in US. The research was conducted on top 25 generous companies listed by fortune 500. The result and data collected in highly trustworthy. The data included does not involve personal responses of individuals but it restricted to authentic unbiased reports and articles. The data reflects the positive relationship between the company’s philanthropic activities and it reputation in the society. The various hindrances to the philanthropic activities are the increasing focus of the companies on increasing the operations and profits of the firm to combat financial crises and competition.
References
Barkan, J. (2013). Plutocrats at work: How big philanthropy undermines democracy. social research, 80(2), 635-652.
Bromley, P., & Meyer, J. W. (2015). Hyper-organization: Global organizational expansion. Oxford University Press.
Cuypers, I. R., Koh, P. S., & Wang, H. (2015). Sincerity in corporate philanthropy, stakeholder perceptions and firm value. Organization Science, 27(1), 173-188.
Erkens, D., Hung, M., & Matos, P. (2012). Corporate governance in the 2007–2008 financial crisis: Evidence from financial institutions worldwide. Journal Of Corporate Finance, 18(2), 389-411. https://dx.doi.org/10.1016/j.jcorpfin.2012.01.005
Gautier, A., & Pache, A. C. (2015). Research on corporate philanthropy: A review and assessment. Journal of Business Ethics, 126(3), 343-369.
Hadani, M., & Coombes, S. (2015). Complementary relationships between corporate philanthropy and corporate political activity: An exploratory study of political marketplace contingencies. Business & Society, 54(6), 859-881.
Kabongo, J. D., Chang, K., & Li, Y. (2013). The impact of operational diversity on corporate philanthropy: An empirical study of US companies. Journal of Business Ethics, 1-17.
Koch, F. (2012). The new corporate philanthropy: How society and business can profit. Springer Science & Business Media.
Liket, K., & Maas, K. (2016). Strategic philanthropy: corporate measurement of philanthropic impacts as a requirement for a “happy marriage” of business and society. Business & Society, 55(6), 889-921.
Meyer, J. W., & Bromley, P. (2013). The worldwide expansion of “organization”. Sociological Theory, 31(4), 366-389.
Masulis, R. W., & Reza, S. W. (2014). Agency problems of corporate philanthropy. The Review of Financial Studies, 28(2), 592-636.
Muller, A. R., Pfarrer, M. D., & Little, L. M. (2014). A theory of collective empathy in corporate philanthropy decisions. Academy of Management Review, 39(1), 1-21.
Sz?cs, I., Schlegelmilch, B. B., Rusch, T., & Shamma, H. M. (2016). Linking cause assessment, corporate philanthropy, and corporate reputation. Journal of the Academy of Marketing Science, 44(3), 376-396.
Tilcsik, A., & Marquis, C. (2013). Punctuated generosity: How mega-events and natural disasters affect corporate philanthropy in US communities. Administrative Science Quarterly, 58(1), 111-148.
Vaidyanathan, B. (2012). Science of Generosity (pp. 10-29). Indiana: University of Notre Dame.
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