Archive for the ‘Corporpate Reputation’ Category

America “lost” the iPhone work – but maybe that’s not the worst part

posted by Tara Knight

I was forwarded a recent New York Times article about Apple’s manufacturing in China that really got me thinking about the scope of Corporate Social Responsibility and the entire ecosystem that exists around multinational companies. The intended – and unintended consequences of the choice of actions by corporate management, and ultimately, what it says about our societies as a whole.

What really got me thinking in the article though was a story of the creation of the glass screen for the iPhone.  Steve Jobs wasn’t happy with the prototype’s plastic screen, and demanded a glass alternative that wouldn’t scratch. Famously uncompromising, his insistence demanded the flexibility and instant change of manufacturing capacity and capability that could only be accommodated in another jurisdiction (China) primarily because of working expectations (both written and unwritten) that are no longer legal, expected or accepted in many other countries.

The article quotes a current Apple executive, saying “we shouldn’t be criticized for using Chinese workers. The U.S. has stopped producing people with the skills we need.” In this case, however, what Apple needed, was workers who could be roused from their dormitory beds in the middle of the night for a 12 hour shift (Apple does monitor and publish an audit report of their suppliers). Obviously, Apple is only one of many companies choosing more “flexible” and “capable” locations for their manufacturing needs.

What does it say about our society that expediency and efficiency – valuable and real requirements of business today – have a trump card over how we treat and cooperate with other societies? I know many brilliant people have tackled this question, with few palatable answers – and the cynical among us might learn towards the idea of corporate activity as inherently pathological.

I am caught – ultimately, our corporations, our institutions, our interactions are defined by someone –and how these “someones” charged with the responsibility of directing organizations choose to  interact and collaborate with the world are an example set for the people around them.  I fall more with John Locke if only that I cannot bear the idea of Thomas Hobbes’ society that puts so little faith in its members. The question remains, in our global economy, is it possible to be a healthy, ethical corporation? How do we realize a global social contract – or are we simply unable to think beyond our immediate world and consider the reality of others?

Trends in CSR Reporting

posted by Tara Knight

I had the opportunity recently to do a bit of digging into best practices and trends for corporate responsibility reporting – and it was a fascinating journey. CSR (or ESG – Environmental, Social and Governance) concerns and reporting are clearly moving to the forefront of corporate agendas.

There are a few more obvious trends – corporate responsibility reporting formats are clearly headed away from large volume hard print copies and towards digital solutions such as websites and online formats as reports get more detailed. Finding easy-to-manage ways to organize large volumes of information is especially true for organizations using integrated reporting frameworks to incorporate financial and non-financial indicators into a single report. (A couple of excellent resources in this area are: Corporate Register’s CR Reporting Awards  and CSR Trends 3)

In the wake of a number of corporate actions which have publically (and dramatically) not met their CSR reputations, there is a lively debate about evaluating the breadth and credibility of corporate CSR reporting. With a more skeptical audience, there is a significant appetite for more transparency, independent verification of CSR reporting, and engaging stakeholder participation to validate key aspects of corporate CSR reports.

The Chartered Accountants of Canada recently released a report, Environmental, Social and Governance (ESG) Issues in Institutional Investor Decision Making, which provides another window into why these trends have become more prevalent. As investors are increasingly concerned with the environmental management aspects of CSR as a risk mitigation strategy, especially long-term investments, CSR (or ESG) reporting is also becoming critical data in making investment decisions. In fact, their report identifies that reporting on environmental, social and governance elements of the business are now being seen by some investors as a proxy for evaluating the quality of management of a company. Jennifer Hicks wrote about this growing interest in Triple Pundit.

Of course, this trend is frustrated by the lack of truly comparable metrics to evaluate CSR or ESG reporting between companies. Although the Global Reporting Initiative seems to be emerging as a favored standard, Corporate Register’s 2010 CR Reporting Awards report indicates the second most popular option is a completely customized reporting framework.   

For companies looking to initiate or improve their CSR (and ESG) reporting, making the choice between a global standard or custom framework will be difficult. A global reporting standard might enable their investors and stakeholders to perform better comparable analysis on their CSR performance relative to the market, where a custom reporting system could be a better fit to the company’s needs. In the meantime, companies should be conscious that reporting their CSR activity is critical not just for their corporate reputation – but potentially their financial success as well.

The Power of Apologies

posted by Boyd Neil
Anyone who has followed my posts on apologies will know how important I feel they are as a way to manage reputation in a crisis. (Forgive the self-reference, but two of the most recent posts can be found here and here.) A colleague in my firm's Seattle office, Drew Arnold, sent me an article from the Oregon Business Journal referencing a June 2009 discussion paper called 'The Power of Apology' from the University of Nottingham's Centre for Decision Research and Experimental Economics. Here is the paper's abstract:

After an unsatisfactory purchase, many firms are quick to apologize to customers. It is, however, not clear why they should do that. As the apology is costless, it should be regarded as cheap talk and thus ignored by the customer. In this paper, we test in a controlled field experiment whether apologizing influences customers' subsequent behaviour. We find that apologizing yields much better outcomes for the firm than offering monetary compensation."

Based on a study of customers using eBay in Germany, the study found among other results:
  1. "Customers who receive an apology instead of a monetary compensation are more than twice as likely to withdraw a (negative) evaluation."
  2. "When money is offered, a higher purchase price makes it less likely that a customer withdraws his (negative) evaluation. An apology works independent of the level of the purchase price."
Why then can't we assume that the propensity to consider legal action when harm has been caused by an accidental event, even if negligence is involved, just might be mitigated by a genuine (and the key here is the word 'genuine') apology?
Comments Off

Twitter . . . One More Entry

posted by Boyd Neil

Okay, just one more post on Twitter. Hat tip to Meghan Warby for directing me to this:

Dilbert.com

Comments Off

Tesco’s Brilliant Response

posted by Boyd Neil

Hat tip to my colleagues Dominic Pannell and Brendan Hodgson for highlighting this story from The Guardian about Tesco's response to a complaint from Daniel Jones founder of the Church of Jediism:

Tesco said: "He hasn't been banned. Jedis are very welcome to shop in our stores although we would ask them to remove their hoods.

"Obi-Wan Kenobi, Yoda and Luke Skywalker all appeared hoodless without ever going over to the Dark Side and we are only aware of the Emperor as one who never removed his hood.

"If Jedi walk around our stores with their hoods on, they'll miss lots of special offers."

Amazing what a little humour will do for corporate reputation.

 

Comments Off