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Electronic Arts Case Study

1223 words - 5 pages

Grand Canyon UniversityIntroduction:Founded in 1982 and based out of Redwood City California, Electronic Arts develops markets, publishes and distributes video game software playable on various platforms such as personal computers, Nintendo Vii, GameCube, X Box, Play Station, and wireless devices. The company develops a wide variety of games such as role playing, racing, fighting, multi player on line games and combat games. It is best known for its wide collection of sports based games. These sports games are based on real world sports. The most popular ones are Madden (NFL football), FIFA (world cup soccer), NBA (pro basketball), MLB (pro baseball), Tiger Woods Golf and several other collegiate versions as well. (Staff, 2009)The company is the largest third party video game maker in the world with annual revenues exceeding 4 billion dollars. (Staff, 2009)In this paper I will try to evaluate the company’s level of corporate social responsibility according to Archie Carroll’s social responsibility framework. There are other key issues I will address such as servant leadership philosophy, internal and external influences on their product content and its attempt to acquire one of its major competitors, Take Two Interactive.Social responsibilities:According to Archie Carroll corporate social responsibility can be broken into four main categories, economic responsibilities, legal responsibilities, ethical responsibilities and philanthropic responsibilities.Economic responsibilities:The most important part of a business is to be an economic institution. This can be defined as an institution whose objectives is to produce goods and services that a society wants and to sell them at prices that people feel represent the true value of the goods. It must also provide the company with adequate profits in order to ensure its survival and growth. (Carroll & Buchholtz, 2000)If you look at the amount of products E A sports sells on an annual basis there is no doubt that it is producing a product that society wants. Whether it is being seen as a true value by its consumers is another question. Many of its most popular titles are being sold at almost $50 per unit when first released. After 6 months or so these same titles are often sold for 20 to 40 percent less. This gives consumers the impression that the pricing is generated by demand more than actual fair pricing. I feel this is partially correct. The initial demand drives up the costs beyond what I consider to be a fair market value. Once the product has recuperated the investments made during development, advertising and paid promotions it is priced at a more fair market value. By covering these costs and then making adequate profits the company continues to grow and keeps itself from falling behind in this fast changing market.Legal responsibilities:Every business has legal responsibilities, it is required not only to abide by society’s formal laws it has to operate under society’s...

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