Case-study Honor the cost of Philanthropy/Charity As chief legal officer in a well-respected company making lifesaving d

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Case-study Honor the cost of Philanthropy/Charity As chief legal
officer in a well-respected company making lifesaving drugs,
Alistair has been asked by his board of directors to look into
rumors of price-fixing in the firm's European offices. His board
has a very strong ethics policy, and is especially wary of
price-fixing, bribery, kick-backs, and other unethical activities
that can plague overseas operations. After several months of
detailed interviews in Europe, Alistair satisfies himself that the
rumors are groundless. "There's no issue here," he heard several
managers say. “But,” added one such manager, "if you really want
something to investigate, look into the Bosnia contract." Over the
months, Alistair keeps hearing about "the Bosnia contract." So,
when he finishes his report on the price-fixing rumors, he decides
to satisfy his curiosity on this matter. The contract, he
discovers, is ordinary in almost every respect: A major relief
organization has contracted with his company to supply a million
inexpensive kits of medicine for delivery into the war-torn regions
of Bosnia. Like most such contracts with charitable organizations,
it contains hardly any profit for his firm. What he finds strange,
however, is the payment of an extraordinarily large commission to a
Romanian distributor to deliver the kits deep into Bosnia. Seeking
out the executive in his own firm who negotiated the contract, he
has one question in mind: Is this a bribe? “Yes and no,” says the
executive. According to the Romanian distributor, the backs of the
delivery trucks are loaded with the kits—and the glove compartments
are stuffed with cash. That way, when the drivers are stopped at
roadblocks set up by local militia units operating all across
Bosnia, they can pay whatever is demanded and continue their
journey. “In the past,” he notes, “drivers without cash have been
taken from their trucks and shot. If the kits are to be delivered,
this is the cost of doing business.” Alistair feels sure that none
of the money has flowed back to the executive, whose only motive is
to get the kits delivered. And by this time, the deliveries have
already been made. Yet Alistair still faces a dilemma. Should he
draft a separate report to the board on this most unorthodox
contract—possibly causing great harm to the executive who
negotiated it or embarrassment to the relief organization, which is
aware of the commission? Or should he keep silent?
1) Discuss the CSR strategy of the company in relation to
the following approaches to CSR. How should this company implement
these strategies? (15 marks)
▪ Philanthropy
▪ Incorporation of CSR strategy into business strategy
▪ Creating Shared Value, or CSV
▪ Benchmarking strategy