Fine Line between CSR and Bad Taste: Royal Caribbean returns to Haiti

January 20, 2010

The 2010 earthquake in Haiti has been a horrific humanitarian tragedy.  The loss of life and property destruction are devastating to a country that has endured an endless stream of suffering.  Haiti is in the Caribbean and tourism is a major industry in that area.  Though not the most popular tourist destination in the area, Haiti does receive tourism from cruise ships.  Tourists come ashore and but souvenirs from locals.  Haitians also work on the cruise ship and provide recreation for visitors such as jet skies. 

Royal Caribbean cruise lines returned to Haiti on January 15, 2010.  The cruise ship docks at Labadee, a private resort about 100 miles from the earthquake zone and removed from the damage and suffering.  There have been mixed reactions to Royal Caribbean’s early return to Haiti.  Here is how the statement made by CEO Adam Goldstein:

I am proud of what our people and our ships are doing and below John Weis gives some very specific examples of great contributions being made by great Royal Caribbean people and their family members

The ships going back to Labadee, including Navigator of the Seas today, are obviously making a very valuable contribution to the relief effort by offloading supplies at Labadee. The media understand this and generally have written and spoken about the relief effort in positive terms. But in the last 24 hours, sparked by an article in the Guardian in the UK, a different and more critical view has emerged that questions how our guests can justify having a good time in Labadee when there is such misery less than 100 miles away.

My view is this — it isn’t better to replace a visit to Labadee (or for that matter, to stay on the ship while it’s docked in Labadee) with a visit to another destination for a vacation. Why? Because being on the island and generating economic activity for the straw market vendors, the hair-braiders and our 230 employees helps with relief while being somewhere else does not help. These 500 people are going to need to support a much larger network of family and friends, including many who are in (or are missing in) the earthquake zone. Also, the north is going to bear a good part of the burden of the agony of the south, and the more economic support there is to the north, the better able the north will be to bear this burden. People enjoying themselves is what we do. People enjoying themselves in Labadee helps with relief. We support our guests who choose to help in this way which is consistent with our nearly 30 year history in Haiti.” http://www.nationofwhynot.com/blog/

Goldstein argues that Royal Caribbean is motivated by social concern (CSR) not profit in this case.  The ship is carrying relief supplies to Haiti.  You can go online and watch the supplies being loading in Miami.  So the ship has to dock in Haiti to unload the supplies. By allowing visitors to go ashore, Royal Caribbean aids the economy of Haiti through sales and employment.  Royal Caribbean could easily have replaced the Labadee stop with another more desirable location.  Online, some people on board noted they were not happy stopping in an area when so much suffering continued.  Here are two select comments: 

“I agree with them bringing in relief efforts, but not sure any visitors are warranted in Haiti right now,” Cruise Log reader elitetravel says in a Cruise Log post. “I can’t imagine sitting on the beach, drinking a margarita and laughing it up while people are suffering so much in that country.” Writes another Cruise Log reader, PamelaMurphy: “I am scheduled to be on a cruise starting Jan. 31 that is stopping in Labadee, (and) I feel I do not want to be there nor do I belong there at this time … Haiti is now a land suffering from death and destruction of a huge magnitude.” http://www.usatoday.com/travel/cruises/item.aspx?type=blog&ak=15467.blog

The point is that going to Haiti is not a sales point for Royal Caribbean.  In fact, you could argue that it is a liability.  The media and online reaction has been mixed.  The Web site CruiseCritic  (www.cruisecritic.com)  is tracking the discussion among their cruise-interested visitors. (http://www.cruisecritic.com/news/news.cfm?ID=3647).  The non-scientific poll at the site is running in favor of Royal Caribbean’s actions.  In the U.S., 4,478 people responded with the following mix of poll responses:

Should ships have returned to Labadee so soon?
 
  Yes, Haiti needs the money.:     37.23%
 
  Yes, they’re bringing aid!:          27.71%
 
  No, it’s in poor taste.:                 20.68%
 
  I’m on the fence.:                        14.25%    http://www.cruisecritic.com/polls/dailypoll_archive.cfm?ID=1141

 

Questions to Consider                              

  1.  What advice would you have given Royal Caribbean management on this issue and why?
  2. What are the ethical implications in this action?
  3. How effective would you rate Royal Caribbean’s rationale for the action and why?
  4. What else could Royal Caribbean do to communicate its reasons for returning to Haiti to its stakeholders?
  5. Why is this a risky form of CSR?
  6. What might be the long term benefits to Royal Caribbean for these action?  Long term costs?
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Can Giving to Charity be a Negative? Goldman Sachs 2009 Bonus Problem

January 20, 2010

Americans are not happy the financial company Goldman Sachs is going to pay billions in bonuses to employees for 2009 after receiving government bailouts and having contributed to financial market meltdown.  More than unhappy, people are angry.  So Goldman Sachs is looking for ways to reduce that anger yet still pay the bonus money.  One tactic has been to reduce the bonuses but we still talking billions of dollars.  Most people do not see a real different between say 20 billion and 16 billion dollars.  Another option on the table is requiring its top employees to donate X amount of the bonus to charity.  Former rival Bear Sterns required 4% donation from top employees http://economictimes.indiatimes.com/news/international-business/Goldman-hopes-more-charity-will-quell-bonus-furore/articleshow/5434955.cms

Some view the charity donation as “public relations” designed to make the bonuses more palatable to stakeholders.  Here is a common interpretation, “the firm’s executives have been looking at expanding their current charitable requirements for months and trying to understand whether such gestures would damp public anger over pay, according to a person familiar with the matter who did not want to be identified because of the delicacy of the pay issue.” http://www.nytimes.com/2010/01/11/business/economy/11goldman.html?partner=rss&emc=rss

Here is another description, “We spoke with a former senior Goldman executive and a current partner managing director who have been urging the plan and helping development. The plan is part publicity stunt, of course. Goldman fears a public and political backlash when it awards what may be record bonuses this year. It is searching for ways to mute the outcry from those who believe it is inappropriate for a firm that received billions in taxpayer support to pay its employees tens of billions in bonuses.” http://www.businessinsider.com/john-carney-is-goldman-about-to-become-one-of-the-worlds-biggest-charitable-donors-is-goldman-about-to-become-one-of-the-worlds-biggest-charitable-donors-2009-10

So philanthropy and CSR are being used to offset what most stakeholders, even government officials consider to be ill-advised to offensive bonuses?  Of course employees to do favor the bonuses and recruiters argue that failure to provide bonuses could result in top people leaving Goldman Sachs for competitors that do pay such bonuses.  Investors in Goldman Sachs think more of the profits should go to them in the form of dividends so even core stakeholders are split on the action.  An announcement about the bonuses was delayed in early January of 2010 as management tries to sort through the options

If we look just at the numbers, charities would receive a little over 500 million dollars based on bonuses of about 16 billion and 4% required for charity.  That money could do a lot of good in society.  Pragmatically, the end result of the payments would be to help society.  If employees are going to get bonuses, why shouldn’t charities benefit in some way?  Will the donation blunt anger?  Probably not.  Will the money help those in need?  The answer is yes.  Regardless of the motivation, the money will help people in some way.  Management often faces decisions about CSR and what it will return to the organization.  Such decisions must be balanced against what will be returned to or lost by society if an action is not taken.  Goldman Sachs may have started down a road that has few beneficial routes to itself.

Questions to Consider

  1.  How would not using the charity option make the situation (e.g., reputational damage) worse for Goldman Sachs?
  2. Is it fair to say all philanthropy and CSR efforts by organizations have a strong self-interest component to them?  Why or why not?
  3. Why are so many stakeholders upset by the larger bonuses at Goldman Sachs?
  4. At this point, can anything positive come out of using the charity giving option at Goldman Sachs?
  5. Can you justify the argument that any contribution to charity is ultimately a good thing?
  6. What advice would you give Goldman Sachs about the bonuses and why would that advice be useful?
  7. What are the ethical implications for this case?

Social Irresponsibility: H & M and Wal-mart mutilate unsold clothes

January 8, 2010

In times when people are in need, corporate waste becomes an even bigger example of corporate irresponsibility.  In January of 2010, the story broke that clothier H&M (a Swedish company) and Wal-Mart stores in New York City were mutilating unsold clothes then throwing them away.  The clothes were mutilated to prevent someone from finding the trash and reselling the items.  It also prevent those in need from receiving donations.  The discovery was made by graduate student Cynthia Magnus who was looking through the trash from an H&M and a nearby Wal-Mart on 35th street in New York City near Herald Square.  The bags were in plain site as she walked by on her way to a subway stop.  Here are the initial responses:

“A Wal-Mart spokeswoman, Melissa Hill, said the company normally donates all its unworn goods to charities, and would have to investigate why the items found on 35th Street were discarded.”

“This week, a manager in the H & M store on 34th Street said inquiries about its disposal practices had to be made to its United States headquarters. However, various officials did not respond to 10 inquiries made Tuesday by phone and e-mail.”

http://www.nytimes.com/2010/01/06/nyregion/06about.html?partner=rss&emc=rss

This post will focus on H&M because they make a point in their corporate social responsibility (CSR) writings about how they donate unused clothes to charity.  Oddly, just around the corner from the new York City store is a collection point for New York Cares which does collect clothes, especially coats, for those in need. The problem is intensified because of H&M’s supposed commitment to help others with unsold clothes.  Here are some of H&M’s statements about donating clothes:

“H&M donates clothes to charity

H&M is committed to taking responsibility for how our operations affect people and the environment. We donate garments that do not meet our quality requirements to organisations such as UNHCR, Caritas, the Red Cross and Helping Hands. When possible, we also donate faulty garments that have been returned to our stores. However, we do not donate clothes that do not meet our safety requirements, chemical restrictions or are damaged. We have agreements with reputable aid organisations in most of our sales countries. In total, more than 500,000 pieces of H&M garments were donated during 2009.

We are currently looking into if we can further improve our routines.”

http://www.hm.com/us/corporateresponsibility__responsability.nhtml

“Gifts in kind International

H&M’s US sales operation donates thousands of garments from its corporate facilities through Gifts In Kind International, a nonprofit organization that distributes products to community services groups that are improving the lives of people in need.

In order to be eligible to receive H&M product donations through Gifts In Kind, your organization must have 501(c) (3) status and offer programs or services that enhance education, promote healthy living, provide opportunities for women and children to reach their maximum potential or work to improve the environment.

If your organization meets these guidelines, the next step is to register with Gifts In Kind International — either directly or through a local Gifts In Kind® program located in any one of the more than 300 communities they serve around the United States.

For more information, please go to: www.giftsinkind.org/H&M

http://www.hm.com/us/corporateresponsibility/hmsupports/projectsandcooperation/hmdonatesclothestocharity__projectsarticle5.nhtml

So the idea that H&M donates clothes to charity is not a one-time statement, but an integral part of its CSR discourse.  People expressed their anger on blogs and at the company’s Facebook site.  Here are some comments from the Facebook site:

Eva Ramey Swontek Whoever
made the decision to destroy these clothes instead of donating should
be fired! Perhaps a few months of unemployment and knowing 1st hand the
need for chairitable organizations would be a good lesson.
Irresponsible at it’s definition H&M . . . I would expect better
from your company.

Sheryl Johnston So dissapointed in you. Couldn’t you guys donate the items? This is greed of the worst kind. How low can you go?!!!! will certainly not shop there again!!!!

Anja Gesell I find this an OUTRAGE!!! Considering that we have so many less fortunate persons in our worlds society. Those clothes could have been put to better use. I will boykott H&M in germany, period. EVEN I GIVE MY CLOTHES AWAY TO LESS FORTUNATE and I dont own a multimillion Store possibility, to make a difference –

http://www.facebook.com/hm?ref=mf&_fb_noscript=1

H&M became more responsive as the reactions reached corporate ears.  However, as the story broke, there was no statement at its US web site.  However, here is an example of their response as reported in the news media:

“H&M spokeswoman Nicole Christie said: ‘It will not happen again.’

She said company policy is to donate unworn clothes and did not know why this store was instead cutting them up and throwing them out.

The company said that it gave half a million pieces of clothes to charity last year, but that not all items qualified. ‘We do not donate clothes that do not meet our safety requirements, chemical restrictions or are damaged,’ it said in a statement. ‘We are currently looking into if we can further improve our routines.’”

http://www.telegraph.co.uk/news/worldnews/northamerica/usa/6948920/HandM-destroying-and-discarding-clothes-it-cannot-sell-in-NY.html

The situation is not a crisis, it is more of a para-crisis.  A negative situation is developing that warrants a strategic response (para-crisis) but we would not need to assemble the crisis team.  Acting counter to one’s stated CSR values is a problem that cannot be ignored.

Questions to Consider

  1.  How would you recommend H&M respond to this para-crisis?
  2. What role is social media playing in the situation and how might H&M us it to their advantage?
  3. Why is it so troubling that H&M seems to be violating its own CSR practices?
  4. In general, what makes the actions taken by H&M and Wal-mart so upsetting to people?
  5. Will people react differently to Wal-mart’s actions?  Why or why not?
  6. Culturally, how do Sweden and the US differ in terms of valuing CSR?

Toys”R”Us uses Cash to help Find Dangerous Infant Products

August 30, 2009

Each year there are hundreds of product recalls in the US.  Examples include beef for e coli, laptops for battery fire hazard, chainsaws with missing guards, and cookies with nuts missing from the ingredient list.  The product recalls are a result of product harm—the product can hurt the consumers in some way.   The recall is designed to separate the product harm from the customer.  People return the product and it removes the risk.  The problems could be a result of a defect, a missing part, or an undeclared food allergen.  Infant furniture is common product that is recalled because the furniture can harm the child in some ways.  The furniture in question can include beds and chairs. 

So why highlight infant furniture?  One reason is the risk posed to helpless infants.  Another reason is the difficulty in recalling infant furniture.  Kids in Danger (http://www.kidsindanger.org/)  report that only around 30% of infant products are returned.  That means 70% stay in use and remain a threat to infants.  The risk is compounded by the secondary market for infant furniture.  People often sell their infant furniture at garage sales or online or simply give it to other people.   (It should be noted eBay has a policy against selling recalled products). The people buying the product on the secondary market probably have no idea of the product had been recalled.  In all likelihood the seller did not know that either.  Manufacturers are required to send news releases to media outlets about recalls.  The media may or may not use the information.  Recall information can be found at various web sites such as www.recalls.gov  and www.cspc.gov.   Moreover, most companies involved with infant merchandise place the recall information on their web sites.  But consumers have to actively look for that information.   It is easy to miss that a product you own has been recalled.

According to the Consumer Product Safety Commission:

“‘The meager returns have spurred initiatives aimed at getting harmful products out of the public’s hands, including a Consumer Product Safety Commission e-mail program that notifies consumers about recalls.

Still, too often consumers never hear about a recall or “put it on their to-do list and never respond,’ said Scott Wolfson, a spokesman for the safety commission.

Last week, for instance, the agency reissued an August 2008 recall of about 900,000 Simplicity bassinets because two infants had died after becoming trapped between the product’s bars or in a pocket of fabric; the initial recall was prompted by the deaths of two other children.

‘We have said for decades at this agency that we do a very good job of getting dangerous and recalled products off of store shelves,’ Wolfson said. ‘Our greatest challenge is always getting those products out of people’s homes and out of circulation.’” http://www.latimes.com/business/la-fi-toys-trade26-2009aug26,0,1722342.story

 

Toys “R” Us has announced a unique program for removing potentially dangerous infant product from the marketplace. 

WAYNE, NJ (August 26, 2009) – Toys”R”Us, Inc. today unveiled a national program that provides customers the opportunity to trade-in used cribs, car seats and other baby products in exchange for savings on a new item. The ‘Great Trade-In’ event is designed to call attention to the fact that, due to safety concerns, certain used baby products, such as car seats and cribs, are not the best candidates to be handed down or resold.

Safety experts have recently reported that sales of used products are on the rise and are warning consumers to be cautious about purchasing second-hand children’s items. The ‘Great Trade-In’ event places an emphasis on specific old or second-hand baby products that may be potentially unsafe, but are still in circulation.
During the “Great Trade-In” event, which begins Friday, August 28 and continues through Sunday, September 20, all Babies”R”Us and Toys”R”Us locations nationwide will accept returns of any used cribs, car seats, bassinets, strollers, travel systems, play yards and high chairs in exchange for a 20% savings on the purchase of any new baby item, in any of these product categories, from select manufacturers.” http://www4.toysrus.com/Investor/pr/082609.html

The Toys “R” Us action is a proactive attempt to deal with the problem of recalled infant products remaining in circulation and being resold or given to others.  It will be interesting to see the level of response and what percentage of the exchanged merchandise had been on recall lists.  The actions by Toys “R” Us are supported by the CPSC and Kids in Danger.

 

Questions to Consider

  1.  How can this action be used to bolster the CSR for Toys “R” Us?
  2. How might this action help if/when Toys “R” Us has a crisis?
  3. Why is it important that other groups support the “Great Trade-in” event?
  4. What else could be done to help create awareness and action on recalled products?
  5. How would you evaluate the success of the Great Trade-in” event?
  6. What makes the Great Trade-in” event any different other efforts to make people aware of recalled products?

The End to Kleencut: Greenpeace embraces Kimberly-Clark

August 13, 2009

In 2004, Greenpeace launched a campaign called Kleercut.  The target for this action/churn was  Kimberly-Clark, a major paper-goods company.  Among the its well known products are Scott, Cottenelle, and Kleenex.  Clearly the Kleercut is a play on the Kleenex brand.  Greenpeace initiated the campaign to create a specific behavior change—to shame Kimberly-Clark into no longer using old-growth timber, some of which comes from Canada.  In August of 2009, Kimberly-Clark agreed to end using old-growth timber from Canada and to increase its use of recycled materials and environmentally responsible sources.  Both organizations heralded the agreement.

Here is a segment from Kimberly-Clark’s news release on the topic:

Kimberly-Clark Corporation, the maker of Kleenex, Scott and Cottonelle brands, today announced stronger fiber sourcing standards that will increase conservation of forests globally and will make the company a leader for sustainably produced tissue products. Greenpeace, which worked with Kimberly-Clark on its revised standards, announced that it will end its “Kleercut” campaign, which focused on the company and its brands.

‘We are committed to using environmentally responsible wood fiber and today’s announcement enhances our industry-leading practices in this area,” said Suhas Apte, Kimberly-Clark Vice President of Environment, Energy, Safety, Quality and Sustainability. “It is our belief that certified primary wood fiber and recycled fiber can both be used in an environmentally responsible way and can provide the product performance that customers and consumers expect from our well-known tissue brands. We commend Greenpeace for helping us develop more sustainable standards.’

Kimberly-Clark has set a goal of obtaining 100 percent of the company’s wood fiber for tissue products, including the Kleenex brand, from environmentally responsible sources. The revised standards will enhance the protection of Endangered Forests and increase the use of both Forest Stewardship Council (FSC) certified fiber and recycled fiber. By the end of 2011, Kimberly-Clark will ensure that 40 percent of its North American tissue fiber – representing an estimated 600,000 tonnes – is either recycled or FSC certified, an increase of more than 70 percent over 2007 levels.

‘Today, ancient forests like the Boreal Forest have won,” said Richard Brooks, Greenpeace Canada Forest Campaign Coordinator. “This new relationship between Kimberly-Clark and Greenpeace will promote forest conservation, responsible forest management, and recycled fiber as far and wide as possible.’

Also by the end of 2011, Kimberly-Clark will eliminate the purchase of any fiber from the Canadian Boreal Forest that is not FSC certified. This forest is North America’s largest old growth forest, providing habitat for threatened wildlife such as woodland caribou and a sanctuary for more than one billion migratory birds. It is also the largest terrestrial storehouse of carbon on the planet, storing the equivalent of 27 years worth of global greenhouse gas emissions.”

http://news.prnewswire.com/DisplayReleaseContent.aspx?ACCT=104&STORY=/www/story/08-05-2009/0005072449&EDATE=

 

With the policy change, Kimberly-Clark moves to a strong position on sustainability.  In fact, they could now position themselves as sustainability leader in the paper-good industry.  On a lighter note, Kimberly-Clark noted toilet paper would not be made from 100% recycled material because that would be too harsh for the US market.  (Americans like the soft toilet paper).

Notice the campaign began in 2004 so it ran for nearly five years before there was a change.  A centerpiece of the campaign was a web site, http://www.kleercut.net/en/.  The web site contained information about the issue and ways people could become involved.  The involvement included action packs for creating your own campaign.  The action packs contain background information on the issue and plenty of public relations advice.  Section included how to get media attention, how to stage street theater, and preparing for media interviews.  Entries included titles such as Kimberly-Clark Declared Greenwasher by Ethical Corporation Magazine http://kleercut.net/en/node/908 and Greenpeace Report: Kimberly-Clark’s Failed Policies Devastate Forest, “A new Greenpeace report reveals that Kimberly-Clark devastated Ontario’s Kenogami Forest while promoting itself as a leader in environmental and social responsibility.” http://kleercut.net/en/node/936

 

The home page for Kleercut site now explains the agreement and ends this message: “Please join us in thanking Kimberly-Clark for supporting conservation of the Boreal Forest by sending its CEO a congratulations email.” 

Questions to Consider

  1.  How does this case illustrate utility of stakeholder churn and the exercise of power by activists?
  2. What role did public relations play in creating power for Greenpeace and placing pressure on Kimberly-Clark to change?
  3. How does this case illustrate the Excellence dialectic for corporations and activists (Chapter 5)?
  4. Why might it have taken over four years to reach an agreement?
  5. Why is it important that the announcement was made jointly by Kimberly-Clark and Greenpeace?
  6. From Greenpeace’s perspective, how would you measure success in this campaign (Chapter 4)?
  7. How will the action help Kimberly-Clark with its CSR and its reputation?
  8. How might this action influence other companies in the paper-goods business?
  9. How did each side “win” with the policy change?
  10. How does the case illustrate globalization’s effect on public relations?

Globalization: Shoes and the Rain Forest

August 4, 2009

So do the shoes you buy affect the rain forest and global warming?  The answer is yes to both points.  Leather from Brazil can be sourced from cattle that graze on deforested rain forest land.  The destruction of the rain forest contributes to the problem of global warming.  Yes, we are identifying global warming and real and a problem.  Leather is used to make shoes.  If the leather in your shoes comes from deforested land in Brazil, you are contributing to global warming.  Welcome to globalization, a key subject of Chapter 14.  Manufacturers source raw materials from around the world.   Put another way, supply chains stretch around the world.  Who manufacturers use in their supply chain does matter.  Suppliers vary in their treatment of worker rights, indigenous people, sustainability, and impact on the environment.  Nike’s linger “sweat shop” stigma is a case in point.  Corporations need to make informed decisions about suppliers.

Nike is taking action to be at the forefront of global warming and leather.   Nike plans to have suppliers provide proof their materials do not come from illegally created pastures.  Here is part of the Nike news release:

” Nike has had extensive conversations with its leather suppliers to gain the most accurate picture possible of our leather sourcing footprint. Nike can say with a high level of certainty that leather used in Nike products is not sourced within the Amazon basin.

However, recognizing that there is no current leather traceability system to track the origins of leather with 100 coming year. In addition, we have also signed Greenpeace’s ‘Commit or Cancel’ principles which call for a moratorium on deforestation.

Beyond traceability, Nike would also call for the establishment of an enforceable certification system for all industries involved in the Brazilian meat and leather supply chain. Nike values collaboration and continued dialogue on important issues in order to implement change for a more sustainable future.

To this end Nike will continue to work with the industry’s Leather Working Group, Greenpeace and other stakeholders to address this issue across the supply chain. Moving forward, we will also require all suppliers of leather for Nike product to join the Leather Working Group by December 2009.”

http://www.nikebiz.com/media/pr/2009/07/22_AmazonLeatherPolicy.html

Nike is connecting itself with protecting the planet from global warming and Greenpeace.  As the news release notes: “Nike and Greenpeace share a common interest in addressing the causes of climate change.”   For additional information on the subject, see Nike’s Amazon Leather Policy at http://www.nikebiz.com/responsibility/index.html

 

Greenpeace has provided support for Nike at its web site.  Here is the last section of their comments on Nike’s new policy:  “The demand for leather means more Amazon rainforest cleared to graze cattle – leather that can end up in popular brands like Timberland, Adidas, Reebok, and Clarks. Nike has stepped up and taken the necessary action to eliminate Amazon destruction from its supply chain. Take action now >> Thank Nike for setting a good example of protecting the Amazon and the climate.

Unfortunately, the other shoe companies linked to Amazon deforestation in our report continue to offer nothing but excuses. With rival Nike having made a commitment to protect the Amazon, it’s time for these companies to step up and do the right thing.”

 

http://www.greenpeace.org/usa/news/nike-establishes-policy-072209

 

Notice Greenpeace is providing a link to have people thank Nike as well as praising Nike for being a leader on this issue.

Questions to Consider

  1.  How can Nike use its Amazon Leather Policy to bolster its reputation?
  2. What other policies/practices does Nike have about sourcing products that relate to CSR and reputation building?
  3. How does this case fit with the legitimacy procurement model in Chapter 13?
  4. How does this case illustrate identifying and preventing expectation gaps?
  5. How does this case illustrate the effects of globalization on public relations (Chapter 14)?
  6. How could Nike use online channels (Chapter 7) to promote this CSR effort beyond just posting to its web site?
  7. What role might activists (Chapter 5) have played in shaping this policy?

HP, Greenpeace, and Aggressive PR

July 30, 2009

You probably are or have used an Hewlett Packard (HP) printer, maybe even a computer.  We should note up front that HP has taken actions to become more environmentally friendly.  The computer industry can generate toxic materials and use them in machines.  On page 261 of our book, Chapter 13 on Corporate Social Responsibility, we note HP efforts to recycle computer and computer-related equipment as efforts to reduce waste.  However, constituents can still pressure for change even as a corporations is changing.  That pressure is designed to keep the change process moving and to shape the direction of that change process.  Check out page 86 and other discussions of the Excellence Dialectic for more on that process.  To learn more about HP’s environmental efforts, visit HP Eco Solutions at http://www.hp.com/hpinfo/globalcitizenship/environment/index.html.

On July 28, 2009, Greenpeace painted the words “Hazardous Products” on the roof of HP headquarters in Palo Alto, CA.  There is a link to a piture near the end of this case.  A message recorded by actor William Shatner (Captain Kirk or Denny Crain depending on your tv viewing) was sent to HP as well.  According to Greenpeace, here is the reason for the action:  “Earlier this year, HP postponed its 2007 commitment to phase out dangerous substances such as brominated flame retardants (BFRs) and polyvinyl chloride (PVC) plastic from its computer products (excluding their server and printer lines) from 2009 to 2011.”   Greenpeace views the failure to change as unacceptable. http://www.pcworld.com/article/169225/greenpeace_paints_hazardous_on_hps_roof_over_toxics_use.html

Greenpeace created a publicity stunt—an event designed to attract media coverage.  Though not traditional, the rood painting is a form of public relations.  In addition to media relations (traditional and online), the action can be tied to reputation management and corporate social responsibility.  It also illustrate various aspects of activist PR.

HP’s response:  “The unconstructive antics at HP’s headquarters today did nothing to advance the goals that all who care about the environment share.”  http://www.google.com/hostednews/afp/article/ALeqM5gDI09wWmfAmebtCHuoqYVWVMw3cA

As You Sow is another activist group that wants to see the end to BFRs.  Here is a part of their news release about the event:

“Publicly chastening companies has in the past been effective in calling attention to issues such as toxic chemical use, Conrad MacKerron, director of the corporate social responsibility program at As You Sow, said in a telephone interview. “But in the long run, in terms of the actual change, it depends on whether they are making good faith efforts to change things,” he said, adding there could be credible reasons for why they are unable to adapt quickly, such as lack of suitable alternatives. Regarding efforts to recycle electronic waste, MacKerron said there are concerns on both sides of the lifecycle — from production to deconstruction and disposal — and it will take a fair amount of time to clean up an entire sector of business. “The IT industry has been more responsive to stakeholder concerns in a similar amount of time, compared to when we were pressing apparel companies for using sweatshop labor a decade ago,” he said. Indeed, the sector has made efforts to clean up their businesses. For example, Dell sells laptops with mercury-free LED backlighting and offers free computer recycling worldwide. Lenovo sells a PC monitor that is free of arsenic and mercury, as well as monitors that contain 25 percent post-consumer content recycled plastics. In addition, HP plans to release a BFR/PVC free notebook in September, and says that by fall of 2010, all “new commercial products” released will also be free of these chemicals. Between 1987 and 2007, HP recycled one billion pounds of electronic products. At this point in time, the situation has presented a market opportunity for Apple to promote its PVC and BFR-free products over its competitors’ wares. Perhaps competition could be just as powerful of a motivator as public shame to push its rivals to find solutions fast.”

You can read the complete release at http://www.asyousow.org/publications/HP%20Delays%20Toxic%20Phase-Out.pdf

 

 Link to picture of the roof:

From http://www.greenbiz.com/news/2009/07/28/greenpeace-hp-hazardous-products

 

Questions to Consider

  1.  Does the Greenpeace effort hurt or help efforts to change HP’s behavior?
  2. Chapter 5 on activism talks about different PR actions taken by activists?  How would you categorize Greenpeace’s efforts here?
  3. How does As You Sow’s PR efforts differ from Greenpeace in this case?  Which do you think is more effective and why?
  4. How can As You Sow and Greenpeace be used to illustrate the idea of moving the middle (p. 101)?
  5. How does HP’s environment efforts and communication about those efforts increase their concerned about the negative publicity about  BFRs?
  6. What ethical concerns do you see with Greenpeace’s aggressive PR.

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