CSR, LMCMC metals company founded by Mr. Lawrence Marconi in 1945 to supply steel to the new Pontiac-Fisher Body plant in Hamilton, Ontario and Mr. Jack Hampton, vice president of sales for LMC metals company shock when he received a letter from one of his supplier GENESCO who are planning a very special meeting for their peak performer in the sales department. They ask Mr. Hampton to sponsor one of their events to show their presence and gratitude towards the company. List of the sponsorship events along with their cost are described in the letter.
1. GENESCO was a leading national and international producer of heavy industrial equipment. GENESCO vice president and General Manager Mr. ...view middle of the document...
An occasional lunch or tickets to a Cincinnati Reds Baseball game were not uncommon. Even Mr. Hampton estimated that the company spent less than one one-hundredth of a percent of sales on advertising and promotion.
c) As one of the company lower management guy sponsor one of golf outing for some other buyer and Mr. Hampton ask the guy how you afford the food as this is not in your budget. He replied he involved the food company who put vending machine in our plant to put up the food and then Mr. Hampton told him that never do it again. Which shows that Mr. Hampton himself not comfortable with this kind of sponsorships towards their buyers and is not the part of LMCMC corporate culture.
2. The three primary stakeholders are:
a) LMCMC who are the main stakeholder in both situation. If Mr. Hampton allows the sponsorship then it’s clearly against the company policy and against the law. Most importantly company does not keep any kind of formal budget for these expenses then how they contribute towards this. On the other hand if refused then GENESCO is one of their first customers since company established. May be lose sales and also bring drift between their business relations.
b) GENESCO as the old buyer of LMCMC expecting them to contribute towards their events. Company already having low sales may be thinking about some extra revenue to accomplish this task, which they organize to boost the morale of their sales representatives. If refuse by LMCMC some other competitor can contribute and GENESCO may turn their loyalty towards them.
c) Jack Hampton himself because if he allow then he go against the company policy which clearly indicate not to contribute money in the events. If refuse may lose the customer and sales as well which ultimately affect his own career?
3. Critical Facts are:
a) GENESCO is among the very first and largest customer when LMCMC established since 1940s and one of the leading national and international producer of heavy industrial equipment and located only a few miles away from LMCMC.
b) According to law receiving and giving gifts are not legally accepted in normal business practice. Government regulations are passed and even they ask to declare them in their income. So LMCMC want to abide by the law keeping in view the relationship with GENESCO.
c) Right now GENESCO is on 90th position on the customers list. If sponsor GENESCO event then what happen if other customer form No 1-89 ask for the same kind of request.
d) It’s also against the company policy to sponsor because no history and no fund allocated for that kind of advertising or sponsoring expenses in past.
e) Another important fact that if not contributed then LMCMC competitor will jump in through contribution and may break account.(want to keep business intact)
4. Milton Friedman: A corporation’s only social responsibility is “to make as much money as possible while conforming to the basic rules of the...