Corporate Accountability in CSR: Legal or Ethical - Essay Example

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Running Head: Corporate Accountability Corporate Accountability in CSR: Legal or Ethical Corporate Accountability in CSR: Legal or Ethical Corporate social responsibility (CSR) is one of those issues concerning business which, in the public’s perception, occupy the narrow demarcation between ethical duty and legal mandate…
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Corporate Accountability in CSR: Legal or Ethical
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Download file to see previous pages The thesis of this brief discussion is that social responsibility, while acknowledged to be a matter of ethics, is increasingly assuming a legal or mandatory character, and that even now corporations are being increasingly held accountable by government authorities for perceived failure to comply with what should be an ethical matter. Product safety cases: Firestone 1996 and Toyota 2007 Bagley & Savage (2010:37) related the case of “Bridgestone/Firestone, Ford, and Tire Failures”. The case relates that during the last few years of the 1990s, approximately 300 people died and another 700 had been injured in accidents involving Firestone tires. Apparently, the tread on these tires had a tendency to separate from the rest of the tire, a defect which appeared in 10 per cent of Firestone tires per 1996 test results. The company took a huge loss on the legal expenses during the litigation for the injuries and deaths, not to mention the lay-off of 1,380 workers when it closed the plant which manufactured the defective tires. What was not known nor disclosed to the American public was that the tread separation problem was also experienced by Firestone in Saudi Arabia, a matter that was concealed even from U.S. officials. Although Firestone replaced 6.5 million tires in 2000 to 2001 at a cost of $450 million, in 2001 Ford announced its recall and replacement of all 13 million Firestone tires in its sports utility vehicles, including those 1.5 million already replaced by Firestone. The move cost Ford $3 billion, but For CEO Nasser stated that Ford had serious doubts that Firestone’s tires could perform reliably in order to assure their customers’ safety. To this, Firestone CEO Lampe lashed out, calling Ford’s statement “an attempt to scapegoat our tires by falsely alarming consumers about some very real safety problems of [Ford’s] vehicle” (Bagley & Savage, 2010:37-38). Some ten years after the Firestone case, another product safety case, also involving motoring safety, emerged in the form of defectively designed Toyota vehicles. Piotrowski and Guyette (2010:89) relate that, despite a reputation for unstinting quality and attention to detail, Toyota, the world’s leading car manufacturer, had been experiencing a series of car model recalls involving their best-selling models such as the Camry, Corolla and Prius (i.e. unforeseen problems in acceleration, brake system defects, steering malfunctions, and software glitches). The recalls have totalled more than ten million between the years 2007 to 2010, with repair costs estimated to exceed $2 billion. In February 2010, an investigatory Congressional panel have summoned Akio Toyoda, president of Toyota, to be present to answer incisive, probing, and seemingly accusatory questions on the recalls (National Press Club, 2010). During the session, Toyoda was reported to have said before Congress, “I’m deeply sorry” (Raum & Thomas, 2010). Implications on corporate social responsibility There are clearly legal implications in those defects that resulted in incidents causing damage, injury and death, but the aspects of recall on these two cases should be viewed from the point of view of social responsibility. Clearly, within the span of ten years between Firestone and Toyota, CSR has assumed significantly increased importance. “It is no longer acceptable for a corporation to experience economic prosperity in ...Download file to see next pagesRead More
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