Corporate Social Responsibility and Philanthropic Foundations

Marquis, C., Lee, M. (2013). Who is governing whom? Executives, governance, and the structure of generosity in large U.S. firms. Strategic Management Journal, 34: 483-497. DOI: 10.1002/smj.2028 The purpose of this article is to identify the manner in which organizational structures impact organizational strategies used by corporate leadership role players. The example that the researchers give of such a structure is the corporate foundation, which is commonly directly managed by a group of corporate leaders for philanthropic purposes.

However, the structure of the corporate foundation allows leaders to exercise influence that in a different corporate structure would be far less possible or even welcomed by the variety of shareholders and stakeholders involved. The determining factors of what allows one corporate entity to achieve specific aims within its philanthropic organization are what the study seeks to identify. The study looks for correlation between variables and outcomes in this respect.

The secondary purpose of the study is to fill the gap in literature that looks at internal corporate factors and their affect on philanthropic activities. The aim of the study is to see how corporate governance can best be arranged so that philanthropic organizations succeed and social responsibility levels are maintained at a degree equal to corporate aims related to profit. The study uses upper echelons theory as a framework for approaching the subject.

The method of gathering data employed in this study was a systematic review of a selected sample from the Fortune 500 list of organizations between the years 1996 and 2006. The purpose of using this sample was because large organizations are more engaged in corporate philanthropic activities than are small companies.

A longitudinal study was conducted over a period of ten years in which dollars given to corporate charity organizations were log-transformed (this was the dependent variable), while the independent variables include assets belonging to the philanthropic organization, CEO tenure, the role/position of board members (centrality within the network), and gender of leaders. The researchers used a control based on the companies' size, market performance, age and industry. Data was analyzed using STATA via a random-effects model.

The methodology employed in the study was suitable to the study's aims, which were to identify the relationship between variables and outcomes associated with a company's philanthropic foundation.

The organizational structure of both corporation and foundation and the way in which the two relate, interact and achieve diverse aims could best be analyzed by choosing the specific sample chosen and controlling for variables such as age, size, scale of company, and so on, and measuring the way in which other variables -- such as gender, centrality of leaders, tenure, and so on -- contributed to a company's organization.

The findings of the article indicate that corporate philanthropic organizations are impacted by two variables -- the organization's leaders themselves (their position in governance as well as their gender), and the nature of the structure and the extent to which it is aligned with the main organization's strategic aims. These two internal variables are responsible for placing restrictions upon the ability of individual corporate members to directly affect or maneuver philanthropic organizational outcomes (Marquis, Lee, 2013).

Moreover, the impact of leadership gender on the outcomes of the philanthropic organization is significant and a strong correlation between female leadership and financial gain within the philanthropic organization is indicated in the study's findings.

The study also found that in terms of how a corporation is able to make a philanthropic impact in a community or society depends to a significant extent on the ability of the company's foundation to manage itself without undue influence from corporate-centric leaders who put the company's and their own personal aims before the aims of the foundation. A foundation that is operated with a degree of autonomy and independence from upper echelon leaders with tenure is one that is more philanthropically-oriented in the long run.

The conclusions of the article are that variables such as proximity of senior members of leadership to the philanthropic organizations' daily activities, the size of the board and its involvement, and the gender of leaders involved in the organization all play a part in how the philanthropic organization's corporate governance is achieved. One of the most significant findings of the study is that gender is a significant factor in how much money is donated to a company's charity.

With women in leadership positions, the dollar value of donations goes up (Marquis, Lee, 2013). Another key finding is that rather than corporate governance impacting the philanthropic organization, the philanthropic organization has an impact on corporate governance in the sense that corporate social responsibility (CSR) becomes a real value and a strategic aim of the company itself. CSR values are promoted and extended to stakeholders in the company, who in turn provide positive (or negative) feedback in relation to the company's achievement or failure to achieve said aims.

The study concludes by recommending that these relationships be investigate still further and.