Corporate Social Responsibility : genuine altruism?

Last week we were asked to discuss the extent to which corporations pursue Corporate Social Responsibility strategies for primarily their own benefit. It was a useful exercise for practicing my writing abilities, but also the start of a reflexion. I'm glad to share in this blog. It is a short introduction, and the ideas could be explored further...

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Corporate Social responsibility (CSR), according to Mallen Baker, “is about how companies manage the business processes to produce an overall positive impact on society”. CPR may be seen as an exclusively genuine form of business altruism, a mean of giving back to society. However, as most businesses are producers of goods or services aiming for profit maximization, spending money on charities or social development of communities wouldn't make sense to most shareholders. Shareholders objections are tempered by the direct benefits the company derives from philanthropic and socially responsible activities to a major extent, and 3 key issues will be raised here to support that.

First, most charitable donations are subject to tax exemptions. As donations may represent millions of dollars, tax savings for the company can be substantial. Some companies will not make such donations if, for various reasons, they will not be eligible to tax exemption. By way of illustration, Warren Buffett mentions this in the 1981 annual report[1] of Berkshire Hathaway. He says the company will not deliver its donations program during years when they won't result in a tax exemption. Hence, it is clear that the main reason why they create such a program is for the company's own benefit.

Second, social responsibility may increase brand awareness and recognition on different fronts. This can be illustrated using Medtronic, a world leader in medical technology, as an example. It organized the Medtronic Global Heroes, a marathon for patients with medical devices. Such an event, sponsored by the company, signals and support the company's mission : “Alleviating pain. Restoring health. Extending life.” and is highly publicized in media. This gives visibility to the company, and it is certainly in the company's best interest to do so.

Finally, CSR can contribute to business performance or competitiveness. For example, when a company reviews its business processes to improve its energy efficiency to reduce it's carbon emissions and act as a good corporate citizen, it gains directly from these measures. It directly impacts the company as the energy bill is reduced, and most companies will do this only when the marginal benefits exceed the marginal costs.

In conclusion, corporations pursue CSR strategies for primarily their own benefit. The tax exemptions associated with donations to charities, the visibility they gain from sponsoring social and community events, and the improvements they derive from improved performance are three areas where it can be shown. Hopefuly, it does not exclude any genuine altruism...

[1] From the french translation of “The essays of Warren Buffett : lesson for Corporate America” by Lawrence Cunningham

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Paternalism and the power of the DOCTOR...

Last week lecture on health economics was about agency relationship and supplier-induced demand. It discussed it from the point of view that DOCTORS are paternalistic. It might be partly true, at least in England. However, in Canada, there is a clear movement favouring patient empowerment, and medical faculties incorporate patient choice and informed consent to their curriculum form year 1 to specialist training. It's been the case for more than 10 years now, as I had this training myself.

An interesting part concerned the agency relationship between DOCTOR and PATIENTS. I can't still figure how this slide (from Professor Paul Dolan, which quoted Williams, 1988) proved the DOCTOR-PATIENT relationship is an imperfect agency relationship, as the practice here seems so far from reality :

"From theory...
The DOCTOR is there to give the PATIENT all the information the PATIENT needs in order that the PATIENT can make a decision and the DOCTOR should then implement that decision once the PATIENT has made it.
To practice ...
The PATIENT is there to give the DOCTOR all the information the DOCTOR needs in order that the DOCTOR can make a decision and the PATIENT should then implement that decision once the DOCTOR has made it."

In my mind, as a doctor, this is far from how things work. Here's my adaptation of this assertion.

From theory...
"The DOCTOR is there to give the PATIENT all the information the PATIENT needs in order that the PATIENT can make a decision and the DOCTOR should then implement that decision once the PATIENT has made it.”

To theoretical practice...
"The PATIENT is there to give the DOCTOR all the information the DOCTOR needs in order that the DOCTOR can make a decision and the PATIENT should then implement that decision once the DOCTOR has made it.”

To reality...
Information asymmetry exists in the DOCTOR-PATIENT relationship regarding DIAGNOSTIC and THERAPEUTIC information. To proceed to the right diagnosis, “The PATIENT is there to give the DOCTOR all the information the DOCTOR needs in order that the DOCTOR can make a [right DIAGNOSIS]”. This implies specialized knowledge to retrieve the relevant information for DIAGNOSIS, and constitutes part of the information asymmetry. This is in part why the principal (patient) needs an agent (doctor).

On the other hand, the DOCTOR has the knowledge to provide options regarding THERAPEUTIC interventions. “The DOCTOR is there to give the PATIENT all the information the PATIENT needs in order that the PATIENT can make a decision.” However, in practice, the principal is sometimes in a position where the information given can't be assimilated clearly. PATIENTS will often ask the DOCTOR to give their opinion on what they would do (“DOCTOR can make a decision [on behalf of the PATIENT]”). This is part of the agency relationship. Is it perfect or imperfect? Maybe it's imperfect from a theoretical point of view, but relieving patients from their anxiety and fears is also part of this agency relationship... It's called the DOCTOR-PATIENT relationship.

As for the implementation part, both the agent and the principal have different roles. Sometimes, “the DOCTOR should then implement that decision” either “once the PATIENT has made it” or “once the DOCTOR has made it.” An example where DOCTOR implements the decision is when he performs a procedure. Only the DOCTOR can do it. Some other times, “the PATIENT should then implement that decision”, either “once the PATIENT has made it” or “once the DOCTOR has made it.” An example is changing lifestyle to treat hypertension : only the PATIENT can implement such therapeutic intervention. Again, this is part of the agency relationship. "The DOCTOR is there to give the PATIENT all the information the PATIENT needs” to implement the treatment. The agency relationship is dependant on both parties participating in treatment implementation. Does it make this an imperfect agency relationship? Not as long as that's what both parties look for... It's called the DOCTOR-PATIENT relationship.


Medical ethics, opinions from peers, the necessity to maintain a professional reputation and clinical guidelines are all strong promoters of DOCTORS acting in their PATIENTS best interests. Does it restrain their desire for profit maximization? Consciously, definitively. Unconsciously, maybe not. However, supplier-induced demand is not an absolute proof that these measures are inefficient and that the DOCTOR exploit PATIENTS vulnerabilities as ill informed consumer to prefer profit maximization over their PATIENTS well-being. Many hypothesis can be generated that favours DOCTORS acting in their PATIENTS best interest while explaining supplier-induced demand. I shall explore that in a future blog... I'll have to go through this chapter again.

At least, I understand incentives fully now, and I won't let real estate agents sell my house cheap...

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first online lecture and developing countries...

As part of our health informatics course, this week lectures were transformed into an online adventure. I learned interesting stuff, like what a BIOS does and why I will never program a software in PERL.

The most interesting part was to generate blog entries discussing various issues about HINARI. This is my first contact wiht this program aimed at providing free or low-cost research and medical litterature to developing countries, based on a web application. I think it's a good idea, even though the link between more information and improvements in health outcomes is not as straightforward as some might think. Of course, having the information is a pre-requisite to fighting diseases, but even in richer countries, the direct applications of research and medical information into knowledge on the (clinical) ground is not as easy as writing "Over 3750 journal titles are now available to health institutions in 113 [developing] countries, benefiting many thousands of health workers and researchers, and in turn, contributing to improved world health." (HINARI website, accessed 24th October 2007). Along the path to the realisation of better health outcomes, there is a long (and sometimes cruel) process of raising awareness of clinicians, patients, businessman and politicians to fund and develop the infrastructures necessary to support these evolutions.

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Here is my post on HINARY sustainability for this brief case study.

“Do you think HINARI is sustainable in the long run? Support your answer”

There is no doubt that HINARI can be maintained over the long term in a form or another, but the most relevant issue here relates to the level at which it will survive. It would be relatively easy (and disappointing) to maintain the web infrastructure in a stagnating mode, without improving the experience. However, although sustainability is classically defined as a “capable of being kept in existence” , to me it implies not only survival, but also the maintenance of an adequate level of function. Then, many potential elements will affect HINARI's sustainability.
Obviously, a major issue will be the funding of such a program, as rise in costs for maintaining and expanding the infrastructure might threaten its survival. As this would be weighed against the benefits of the program, a key factor for HINARI to survive will be it's adaptability to a changing technological, political, and medical context in a way that maintain and expand such benefits.
For example, from a technological perspective, the internet is now changing to involve users actively (web 2.0). The impact on how HINARI could support it's users better lie in part there, so it will need to follow general trends to stay an acceptable solution for its user.
From a political point of view, the dependence on an external funding body over the long run could prove dangerous, as international political priorities change from time to time. Again, HINARI would need to prove adaptability if it is to be sustainable. For example, with improvements in the economic situation of developing countries and empowerment of these nations, HINARI could be transferred to national organisations to further develop relevant content. Therein, it will need to evolve with end-user societies to ensure its perennity.
At the medical level, HINARI will need to provide a way for end-users to manage the huge amount of data provided and help develop relevant and useful information. It would lose its appeal if the information can't easily be processed further into better medical knowledge by the end-users. Hence, the perception of its usefulness in that regard is of prime importance. Again, from the medical perspective, HINARI survival will depend on its impact on concrete health outcomes.
As a support to some of the arguments presented here, and to conclude on a positive note, the HINARI team recently announced : “A wide-ranging independent review of HINARI was recently conducted and [...] showed that HINARI is viewed as an important resource and is making a valuable contribution to research and teaching. As a result of this review, the partners agreed that HINARI [...] will continue at least until 2015.” (from HINARI website accessed 24 October 2007) .

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One of the goals of this blog was to post my notes for my colleagues. here are some of them... they are not perfect, but I'd better read than write too much...

health_informatics_session3 : information system strategy

health_informatics_session4 : business process reengineering (incomplete : reading more interesting...)

health_informatics_session5 : IT infrastructure

health_informatics_session6 : HINARI case study

applied_microeconomices_session1: introduction to market and market failures

applied_microeconomics_session2 : uncertainty and health insurance
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What is economics? Somewhat close to Freakonomics

From a clinician perspective, having a lecture on applied microeconomics scheduled was both frightening and exciting. All these new terms, graphs, formulas. But in my heart, I knew I'd like it. All these new terms, graphs, formulas...

In fact, the lecturer got my full attention (and comprehension...) when he reminded me how the «study» of incentives is intrinsically part of economics. His example of a day care center fining parents for being late to pick up their kids was mentioned in Freakonomics as the first example of how incentives motivate people. And I had a great fun reading the book this summer as a very informal introduction to economics while discovering «What Do Schoolteachers and Sumo Wrestlers have in common?», or «What makes a perfect parent?» ...

From either a clinical or a managerial point of view, incentives are in large part responsible for successes and failure. Incentives, both positive and negative, are everywhere and motivate people's behavior 24 hours a day (maybe not that much during sleep). For example, if a patient was prescribed pills which he decides not to take (a lot of NHS prescriptions and/or pills end up in the bin or the drain), maybe the clinician didn't choose the right set of incentives to motivate «his» patient. Or if a manager's attempt to implement a medical information system fails after careful consideration on planning, probably he didn't choose the right set of incentives to motivate the end-user. Especially if the end-user is a clinician...

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The lecture mentioned previously started with the stand-up economist as an introduction. Here it is again if you don't remember the 10 principles of economics...



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We are in the process of developing an infrastructure to share the courses notes, books summaries, podcast of lectures and readings, bibliographies, and our favourite restaurants... But here are my notes for the first 2 health economics lectures (reading 1, reading 2).

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By the way, I bought Strategic Planning for Information System and The Economics of Health care. If you are looking for Distributing Health Care for the Course on Applied Micro-Economics, note that the postal strike might delay the delivery of your order on online bookstores...

It was the first exam today. Some basic maths covered in the "welcome to Tanaka" web-based pack. I hope it went well for everyone. Having a computer based exam was a première, and I hope the next ones will be. It might help me a little, as my handwriting is not perfect yet...

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It's been mostly a week of planning for me, as I get used to being a student again. I guess I already have the managerial template in my mind : planning, implementing, controlling... You will find some of the books I'm going through during the implementation phase on the astore. You might want to buy 1 or 2... I added some comments in the astore for the books I liked after skimming.

Of syndicate groups and rocket launches...

We've all been induced last week for the Masters in International Health Management at Imperial College London. It has been a very interesting week for me. I've always enjoyed team work, and we all had an unforgettable first team work at Tanaka : we built a rocket from scratch and launched it from Prince's Garden. Don't tell the Prince, though... As Announced in class previously, if anyone form the course is interested in sharing their pictures or videos with fellow team mates and competitors from other teams, you can post them on Flickr or Youtube. Make sure to tag them as tanakarocketlaunch so I can retrieve them and post them here.
The Myers-Briggs experience was also very surprising, as we discovered that ENTJ personality types tend to gather on the table in the middle of the class... I would ask Prof. Dot Griffith to follow-up on this matter by repeating this experiment for the next few years and statistically confirm this assertion...
And don't try "The Escapologist" method that our Director baggy Cox just taught us about... Here is the Syndicate Groups list for this term.

Back to the Future with Basic Mathematics...

I have been out of school for a while, and so I am very excited to be a candidate for the Masters in International Health Management at Imperial College. It started last Monday, and the induction week is so far inversely correlated to what is planned in terms of work for the next 4 terms... The Maths and Accounting primer were surely a happy start, and I look forward to learning some more... There is a Maths exam next week about this primer, and so here is my understanding of it for now... Great memories!

Basic Mathematics formulas applicable to finance

As the formulas get distorted gy processing it to html, you can download the word document if you want a reference table to remember the distributive law, the rules of power, the quadratic equation (you should see the demonstration), the rules of logs, rules for differentiation, rules for integration, how to determine the area under a curve...