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  • Do Firms with Unique Competencies Have Special Obligations?

    The emerging concept of corporate citizenship entails membership in a global community where citizens have duties to respond to the needs of their fellow citizens. The author puts forth a 'statement of a minimal moral obligation' (SMMO) for firms in industries such as pharmaceuticals, who have the ability to address rampant health risks in developing countries. He defines corporate obligation as consisting of three elements, and argues that the emerging concept of corporate and business citizenship supports recognition of the duty established in his SMMO. By supporting the global community, he argues, firms will be helping to maintain a supportive environment for business activity.
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  • Shakedown (HBR Case Study and Commentary)

    Customer Strategy Solutions, a California-based developer of order fulfillment systems, is facing a shakedown. Six months after the firm's CEO, Pavlo Zhuk, set up a software development center in Kiev, local bureaucrats say the company hasn't filed all the tax schedules it should have. Moreover, Ukrainian tax officials claim that the company owes the government tax arrears. Zhuk is shocked; he and his colleagues have done everything by the book. This isn't the first time Zhuk has encountered trouble in Ukraine. In the process of getting the development center up and running, a state-owned telecommunications utility had made it difficult for Zhuk to get the phone lines his company needed. Senior telecom manager Vasyl Feodorovych Mylofienko had told Zhuk it would take three years to install the lines in his office--but for a certain price, Mylofienko had added, the lines could be functioning the following week. Even as the picture of rampant bribery and corruption in Ukraine becomes clear, Zhuk still doesn't want to pull out. Of Ukrainian descent, he has dreams of helping to modernize the country. By paying his programmers more than they could make at any local company, he hopes to raise their standard of living. And yet, he isn't sure he can keep compromising his principles for the sake of the greater good. Should Customer Strategy Solutions pay off the Ukrainian tax officials? Commenting on this fictional case study in R0503A and R0503Z are Alan L. Boeckmann, the chairman and CEO of Fluor Corp.; Rafael Di Tella, a professor at Harvard Business School; Thomas W. Dunfee, the Kolodny Professor of Social Responsibility and a professor of legal studies at Wharton; and Bozidar Djelic, the former finance and economy minister of Serbia.
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  • Shakedown (Commentary for HBR Case Study)

    Customer Strategy Solutions, a California-based developer of order fulfillment systems, is facing a shakedown. Six months after the firm's CEO, Pavlo Zhuk, set up a software development center in Kiev, local bureaucrats say the company hasn't filed all the tax schedules it should have. Moreover, Ukrainian tax officials claim that the company owes the government tax arrears. Zhuk is shocked; he and his colleagues have done everything by the book. This isn't the first time Zhuk has encountered trouble in Ukraine. In the process of getting the development center up and running, a state-owned telecommunications utility had made it difficult for Zhuk to get the phone lines his company needed. Senior telecom manager Vasyl Feodorovych Mylofienko had told Zhuk it would take three years to install the lines in his office--but for a certain price, Mylofienko had added, the lines could be functioning the following week. Even as the picture of rampant bribery and corruption in Ukraine becomes clear, Zhuk still doesn't want to pull out. Of Ukrainian descent, he has dreams of helping to modernize the country. By paying his programmers more than they could make at any local company, he hopes to raise their standard of living. And yet, he isn't sure he can keep compromising his principles for the sake of the greater good. Should Customer Strategy Solutions pay off the Ukrainian tax officials? Commenting on this fictional case study in R0503A and R0503Z are Alan L. Boeckmann, the chairman and CEO of Fluor Corp.; Rafael Di Tella, a professor at Harvard Business School; Thomas W. Dunfee, the Kolodny Professor of Social Responsibility and a professor of legal studies at Wharton; and Bozidar Djelic, the former finance and economy minister of Serbia.
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  • Next Wave of Corporate Community Involvement: Corporate Social Initiatives

    The practice of corporate philanthropy has evolved significantly over the past several decades and has now become an integral part of corporate strategy. This article identifies an emerging form of corporate community involvement called "Corporate Social Initiatives" (CSI). These programs differ from their predecessors in that they are connected to the firm's core values, responsive to moral pressures, based on the firm's core competencies, and have clear objectives and means of measurement. Firms are adopting these initiatives as part of a strategy that seeks competitive advantage through reputation assets or as a response to perceived pressures from the moral marketplace. This article explicates the drivers behind the increased interest in CSI, relates CSI to changes in the environment of social expectations for business, reviews potential challenges to CSI programs, and suggests critical factors in the design of successful CSI programs.
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