Corporate social responsibility and corporate failures of firms, Assignments of Corporate Governence

Download Corporate social responsibility and corporate failures of firms and more Assignments Corporate Governence in PDF only on Docsity! CSR Failures: What is CSR? Corporate Social Responsibility or CSR can be explained as a concept that a business organization is responsible for its effect on all the associated stakeholders. It is the ongoing commitment by the enterprise in order to behave in a responsible and friendly manner and contributing towards the economic development while enhancing the work-life quality of the organizational employees and their families as well as for the society and the communities at large. 1. Unilever Polman, in his leadership put high emphasis upon the superficial feel good policies and practices rather than keeping good emphasis upon the sound business decisions. And as a result, Unilever was mired in a number of controversies related to sexual harassment and environmental issues (Doane, 2005). In the year 2006, there was a lawsuit which was filed against the company over exposure to the highly toxic substances. In India, Unilever had to settle with approximately six hundred workers over the exposure of mercury from a thermometer plant which is now closed (Borelli, 2017). This corporate issue of Unilever has gained international attention from one of the songs of an Indian rapper titled “Kodaikanal Won’t” which addresses the problem of mercury contamination. In the year 2011, there was also exposed the claims of sexual harassment by the Irish Times from the Workers of Africa that stated that there was the practice of offering bribes to the supervisors for letting them stop from the unwanted advances (Browne&Nuttall, 2013). There were some of the CSR initiatives taken by Polman for addressing the issues and the challenges of sexual harassment claims which were not acceptable by the NGOs. Another report of 2014 issued by the Netherlands-based Centre for Research on Multinational Corporations had claimed that the already present systems of balances and checks had failed to restrict the workers’ abuse on the Kenyan estate of Unilever comprising of the poor housing conditions as well as the sexual harassment. Next to this, the South African business of Unilever was also accused for having collusion with the market competitor by the Competition Commission of Unilever. Polman had its key focus in supporting the UN sustainable development goals that the financial results of the company (Borelli, 2017). And as a result neither the CSR could be positive implementation nor there was growth of the business as the business of Unilever had suffered.The one of the biggest factors behind the failure of the CSR approach of Unilever is its rejection of a $143 billion takeover of Kraft Heinz. The takeover was rejected as it could have prevented Polman in using Unilever for advancing the personal or individual political agenda (Borelli, 2017 2) Volkswagen: Volkswagen had a tremendous failure in CSR in the last decade. According to the article in the Forbes, the company tried to save its “embarrassingly low market shares” by creating “clean-diesel” market push in the United States to compete with environmentally friendly alternatives to hybrids like the Toyota Prius and Honda. Their diesel cars were equipped with defeat-device software that detected when emissions tests were taking place and cranked up pollution controls so that the cars would pass. This case was successfully investigated and revealed that Volkswagen cars emit far more poisonous nitrogen oxide than allowed by law. Volkswagen’s CEO, Martin Winterkorn, resigned and stated that he was not aware of such defrauding the United States government as well as violating the Clean Air Act. This wrongfully doing of Volkswagen cost a lot to the company, consumers, and the environment. Corporate Social Responsibility focuses on making safe products and minimizing pollution which Volkswagen failed to do so. In addition, the CEO, as well as the staffs from CSR departments, must have known what is going on within the company. In conclusion, Volkswagen failed miserably in CSR when it targets profits rather than the welfare of society 3) Uber Uber Technologies Incorporation, the rapidly expanding ride-hailing application, which allows its users to book and pay for taxis by using their smartphone has come under serious attack in many parts of the world including the United States, much of Europe, Asia and Nigeria. In these destinations, Uber has faced sanctions, criticisms and protests, such as the once trending social media campaign #DeleteUber, in which users were encouraged to stop using the Uber app. Most recently, a ban on Uber has resulted in the stripping off of its operating license in London. The regulator, Transport for London, said “Uber’s approach and conduct demonstrate a lack of corporate responsibility in relation to a number of issues which have potential public safety and security implications”.In its short-term existence, Uber has been accused of various bad CSR-related issues such as non-reporting of serious criminal offences, improper background checks on drivers, hiring of unprofessional drivers, espionage, customer privacy issues and others. The company has also had to combat its internal stakeholders. 4)Coca Cola: WhenWhen Coca-Cola announced plans earlier this year to recycle the equivalent of 100 percent of its packaging by 2030, the company touted the effort as building on its success with sustainable water use. In a 2016 full-page ad published in The New York Times, the company proclaimed, “For every drop we use, we give one back,” boasting on its website that it was “the first Fortune 500 company to hit such an aggressive target.” But a year of reporting into Coca-Cola’s water program shows that the company is grossly exaggerating its water record, which suggests that its new “World Without Waste” recycling plan should also be viewed with skepticism. Coca-Cola came under fire for its water practices in the mid-2000s. (The company did not answer specific questions, but it did issue a lengthy statement for this article.) Coca-Cola keeps distribution costs low by tapping local water sources, a practice it has continued since the company’s early success at Atlanta-area soda fountains in the late 1800s. By the 2000s, however, local people in some of the world’s increasingly water-stressed regions were looking more critically at big water users, and Coca-Cola found itself a target of public ire. By 2007, US college students took up the cause, calling for a nationwide boycott in support of Indian farmers who accused the company of stealing their water and livelihoods. It was an international PR nightmare that threatened Coca-Cola’s brand image and global business strategy as the investigation showed that they are not even close to what they claimed they are doing. 5)Nestle Tower Records is an international retail music franchise and online music store that was formerly based in Sacramento, California. In 1960, Russell Solomon opened the first Tower Records store on Broadway, in Sacramento, California. He named it for his father's drugstore, which shared a building and name with the Tower Theatre, where Solomon first started selling records They was dealing in compact discs and cassette tapes, the stores sold DVDs, electronic gadgets like mp3 players, video games, accessories, and toys, and a few Tower Records locations sold books as well, such as those in Brea, Mountain View, and Sacramento, California, as well as stores in Austin, Boston, Massachusetts, Nashville, New York City, Portland, Oregon, and Seattle. It is estimated that between 1995 and 2000 customers were overcharged by nearly $500 million and up to $5 per album. In 1983, the company began publishing a music magazine, Pulse BANKRUPTCY Tower Records entered Chapter 11 bankruptcy for the first time in 2004. Factors named were the heavy debt incurred during its aggressive expansion in the 1990s, growing competition from mass discounters and Internet piracy Mismanagement, managerial incompetence, and crippling restrictions from the first bankruptcy deal also contributed to Tower's end. In February 2004, the debt was estimated to be between $80 million and $100 million, and assets equalled just over $100 million. On August 20, 2006, Tower Records filed Chapter 11 bankruptcy for the second time, in order to facilitate a purchase of the company prior to the holiday shopping season. LIQUIDATION On October 6, 2006, Great American Group won an auction of the company's assets and commenced liquidation proceedings the following day. This included going-out-of-business sales at all U.S. Tower Records locations, the last of which closed on December 22, 2006. The Tower Records website was sold separately. 4) Xerox The reason why Xerox is essentially not heard of anymore is simple: It forgot about its brand. When Xerox was first created, their mission was easy for consumers to understand: Make it easier for businesses to communicate information. Somewhere along the way, their vision became muddled. Xerox’s major downfall came in 1981 when they introduced the Xerox Star, a workstation produced with the sole purpose of managing documents was placed on the market for a whopping $16,000. Now, when this is compared to IBM’s PC for business that was selling for $1,600, it’s easy to guess which brand sold more. To make matters worse, Xerox eventually decided to move into insurance and financial services which is a complete 180 from what they began with. They then took on the burdens of being in collaboration with E-Z Pass, automated traffic tickets, and even Medicaid. Now, innovation is definitely important, especially for a company, but Xerox skipped innovation and just went straight to being a completely different company. The worst came when Xerox was sued for fraud in 2014 by Texas its mismanagement of their Medicaid program. Then, in 2016, Xerox was under fire again for the mishandling of the Medicaid for New York. 5) Toys R Us 1. The company's debts were too much to bear. 2. Terrible timing. That Toys R Us filed for bankruptcy in September instead of shortly after the holiday shopping season turned out to be disastrous. Filing for bankruptcy after the holidays would have been more ideal. But the company's hand was effectively forced after rumors of struggles caused suppliers to temporarily tighten up product terms for fear of suffering heavy losses. 3. Competitors turned up the heat. Amazon, Walmart and Target all ratcheted up toy discounts during the holidays 4. Vendors got skittish. In retail, nervousness is contagious. Although details were unclear, Toys R Us said it faced unexpected "delays and disruptions" in product supplies during its bankruptcy. 5. This time was different "As a result of a general decline in toy sales, competitors had full product offerings through the end of the holiday season and same-day and two-day delivery guarantees eased customer fears regarding online shopping." Conlusion: Being a socially responsible company can bolster a company's image and build its brand. Social responsibility empowers employees to leverage the corporate resources at their disposal to do good. Formal corporate social responsibility programs can boost employee morale and lead to greater productivity in the workforce. Because corporate failure is not simply the closure of a company but has wider implications, it is important to construct models of corporate failure for assessment and prediction. If bankruptcy can be predicted accurately, it may be possible for the firm to be restructured, thus avoiding failure.