CASE STUDY – 6

THE UNITED WAY OF COMPENSATING EXECUTIVES

Submitted to,

Prof. Abhilash G N

Submitted by,

Nivin Vinoi

P14199

PGDM - B

Submitted in: 14/07/2014

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EXECUTIVE SUMMARY

The main essence of this case is that the president of United Way of America (UWA) the largest charity organization in US got into allegations of misuse of funding. Due to this president has been resigned and for retrieving its image UWA introduced certain restrictions regarding the utilization of fund.

(Word count: 50)

ANALYSIS

United Way of America is a non-profitable charity organization which works on public funding. They can’t exit without the support of public. Considering such an organization they have to take care certain Environment factors. They are,

1. Donations

2. Transparency in money handling

3. Goodwill

These type of non-profitable organizations depends upon the donors. So it is the organizers responsibility to make sure that the money given

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to them reach the real beneficiaries. If the transparency on utilizing the donation is lost, the relationship between the donors and organizers will get worse. And it will result in diminishing public trust and thereby decline in public funding. Donors always have the right to look that their donations that these money doesn’t end up in wrong hands. If the donor ask about the money it is the duty of organizer to respond it with proper answer. Medias reporting about presidents lavish spending of money by travelling in first class and using limousine services and trans-Atlantic flights made this critical situation. This ended up in an decline of 2.5% of donation. Goodwill and credibility are the main two driving factors that runs such organizations. If public starts to doubt on its credibility and goodwill it will even affect the existence of organization.

As a non-profitable entity it is their responsibility to say no to extravagance. If extravagance is done by the organizers, it will affect the organization as a whole. UWA was a very big organization. So Due to this extravagance

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they president of UWA was forced to resign. Before joining this organization he may surely had lot of job opportunities. But he choosed to join UWA. So choosing to be in a non-profitable organization it is his responsibility to follow certain rules and policies of the organization. And also while recruiting to key posts of this type of organizations the organizers should look after that the person recruited should have a good intention and a clear understanding about the organization he is going to work.

The stakeholders here is the donors. The external factors here is the environmental factors like donation, transparency, goodwill etc. Due to this factors there will be certain policy outcomes. Through this new policies they aimed at recovering from all the allegations of misuse of funding and excessive compensation. As an outcome of this policy they

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STAKEHOLDER INTERESTS

EXTERNAL FACTORS

POLICY OUTPUT

suspended the president’s retirement package. UWA conducted an investigation and published a report that detailed numerous financial abuses by its management during the prior 5 years. Managers are held responsible for their budgets and are monitored monthly by senior vice-presidents. Coach travel is mandated for all business trips and a daily meal allowance has been set. As a result of all these new policies they expected good outcome. They became more transparent. Goodwill and credibility again started to rise. These all resulted in creating more donors thereby it increased the funds. Thus UWA who lost their face due to this scandal finally recovered with the help of stakeholders and external environmental factors.

(Word count: 500)

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