Analysis On The Effect Of Charitable Donation Under Reputation Mechanism

Charitable donation is the primary way for companies to participate in public welfare undertakings in the form of goods and materials.Compared with the more perfect donation system abroad,China has not formed the concept of enterprise group donation.It was not until 2008,when a series of natural disasters broke out and companies began to donate,that corporate social responsibility was truly manifested.However,combined with the analysis of the actual situation,Chinese enterprises still face some problems in the implementation of donation process.On the one hand,the imperfection of the national donation system causes that the enterprise’s donation cannot bring the expected social feedback.On the other hand,companies lack experience in giving and thus cannot maximize the effect of giving.In view of the above problems,this paper takes Xiaomi Group as the research object to analyze whether corporate donation can bring appreciation to the company and maximize the benefit of donation by making decisions under the mechanism of reputation.It is hoped that Xiaomi’s successful donation decisions can be used for reference by similar groups.Based on the existing problems,this paper details the donation situation of Xiaomi Group in recent years and draws the following characteristic conclusions.First,the way of donation is single,which is a typical "cooperative development" donation.Second,it involves a wide range of fields;Third,donations pursue reputation capital,which is strategic.In addition,combined with THE KMRW model,this paper discusses the internal cause mechanism of charity partners,and concludes that choosing a reasonable donation way and a partner with high matching degree has a great impact on donation.Finally,the market performance,financial performance and non-financial performance of Xiaomi Group are studied.On the one hand,Xiaomi Group’s charitable behavior improves the company’s value and financial performance;on the other hand,it also wins additional social feedback through the reputation brought by charity.According to our country’s current donation activity,hoping enterprise reputation mechanism can reasonable use,in combination with the practical situation of the company match best partner,using the cooperative development of charity path to the company win reputation feedback,form a chain effect,fulfill social responsibility and profitable purpose of a win-win situation,the development of philanthropy,contributing to society.