The Corporate Social Responsibility of Pure-Play Sites versus Brick-and-Mortar Corporations

1
The Corporate Social Responsibility of Pure-Play
Sites versus Brick-and-Mortar Corporations

• By
• Juliana Muñoz and Dr. Johnny Snyder
• Mesa State College

2
Abstract

• The goal of this paper is to begin to compare the
  relationships between brick-and-mortar companies
  and pure-play companies in a socially conscious
  setting.
• This comparison will be made utilizing a model
  known as Carrolls Pyramid and the business
  standards that have been set out for
  brick-and-mortar companies.

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Introduction The Events

• The terrorist attacks of 9/11
• The Asian Tsunami of 2004
• Hurricane Katrina in 2005
• The South Asian Earthquake of 2005

4
Introduction Frequency
EM-DAT (2006)
5
Who was there to help?

• 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

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So?

• 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.

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Whats 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 (dont be
• fooled)
• - most importantly, has a direct impact on the
• community which surrounds it
• Example Wal-Mart

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Whats 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 its physical building
• Example Amazon.com

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The Key Element of Embedded Corporations

• A direct impact on a
• community, society and
• economy surrounding a corporation

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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)

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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)

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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 storesphilanthropic behavior.
• Bhatnagar, P. (2005)

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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)

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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.

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Carrolls
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The Question

• Why should Pure-Play sites care?
• One answer could be in Porters model, the
  rivalry among existing competitors (for page
  views).
• (Porter, 2001)

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The Debate To Give or Not to GiveBrick-and-Mort
ar 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
  interestCorporate virtue is good
  for profits (Sexty, 2004, p. 3).

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PitfallsBrick-and-Mortar vs. Pure-Play

• Focus shifted from profit making
• Possible dissatisfaction of shareholders
• Could be seen as utilizing misfortune for press

• Buttons divert traffic from site
• Customer focus is shifted from buying
• Could be seen as utilizing misfortune for press

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BenefitsBrick-and-Mortar vs. Pure-Play

• Helps employees
• Helps community in which embedded
• Promotes company name in positive manner
• Giving entails
• Employee time
• Cash contributions
• In-kind contributions

• Promotes company name in positive manner
• Giving entails
• Employee time (minimal)
• Addition of a button to a web site
• Web page space (minimal)

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Largest Corporate Contributors to Katrina
Alexa (2006)
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Pure Play Companies Contribute

• By enabling the e-consumer to contribute
• By facilitating easy payment options
• Pay-Pal
• Credit Card
• eGold
• gBuy

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Users Want to Donate
Search term on Google Trends Hurricane Katrina
Donate
Google Trends, 2006
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Online Contributions
Pearlstein (2006, February)
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Contributions of Pure-Play Sites
Pearlstein (2006, February)
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The Effect on Brick-and-Mortar Websites
Alexa (2006)
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Increased Page Views
Rank Spikes due to Hurricane Katrina
Alexa (2006)
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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).
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(No Transcript)
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The Effect on Pure-play Sites
Hurricane Katrina
Post Holiday Slow down
South Asian Earthquake
Alexa (2006)
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Costs?

• Search engine placement 500.00
• Click through advertising 2.15/click
• A button on Googles home page
• - priceless

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(No Transcript)
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Googles Pioneering Effort
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Conclusion

• 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

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Conclusion (2)

• 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

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Thanks!

• Thanks for coming to the talk.
• Questions?

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References

• Alexa (2006). Alexa Web Search. Retrieved
  7/3/2006 from http//www.alexa.com/
• Bhatnagar, P. (2005). Wal-Mart closes 123 stores
  from storm. CNN Money.com.
• Retrieved January 21, 2005 from
  http//money.cnn.com/2005/08/30/news/fortune500/ka
  trina_retailers/?cnnyes
• 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.

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References Cont.

• EM-DAT (2006). Trends and relationships for the
  period 1900 2005. Retrieved June 16, 2006
  from http//www.em-dat.net/disasters/trends.htm
• Google Trends (2006). Google Trends Labs.
  Retrieved October 10, 2006 from
  http//www.google.com/trends?qhurricanekatrinac
  tab1geoalldateall
• Internet Archive (2006). The Wayback Machine.
  Retrieved June 12, 2006 from http//www.archive.o
  rg/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
  -katrina-corporate-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.

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References Cont.

• Porter, M. (2001). Strategy and the Internet.
  Harvard Business Review 79(3), 63-78.
• Porter, M. Kramer, M. (2002). The competitive
  advantage of corporate philanthropy. Harvard
  Business Review, 80(12), 56-68.
• Sexty, R. (2004). Corporate Social
  Responsibility The Concept. Retrieved December
  5, 2005, from http//www.ucs.mun.ca/rsexty/busine
  ss8107/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/i
  12/s01
• Turban, E., King, D., Viehland, D., Lee, J.
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  Perspective. Upper Saddle River, NJ Prentice
  Hall.
• Vise, D. Malseed, M. (2005). The Google Story.
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• Wood, D. (1991). Corporate social performance
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