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
Most people love chocolate, but few know the dirty deals behind chocolate production. The
2010 documentary The Dark Side of Chocolate brought attention to purchases of cocoa beans
from Ivorian plantations that use child slave labour. The children are usually 12 to 15 years
old, and some are trafficked from nearby countries – and Nestle is no stranger to this practice.
Children labor was found in Nestle’s supply chain. Image via Crossing Guard Consulting.
In 2005, the cocoa industry was, for the first time, under the spotlight. The International
Labor Rights Fund filed a lawsuit against Nestle (among others) on behalf of three Malian
children. The suit alleged the children were trafficked to Côte d’Ivoire, forced into slavery,
and experienced frequent beatings on a cocoa plantation.

5)Nestle
Most people love chocolate, but few know the dirty deals behind chocolate production. The
2010 documentary The Dark Side of Chocolate brought attention to purchases of cocoa beans
from Ivorian plantations that use child slave labour. The children are usually 12 to 15 years
old, and some are trafficked from nearby countries – and Nestle is no stranger to this practice.
In 2005, the cocoa industry was, for the first time, under the spotlight. The International
Labor Rights Fund filed a lawsuit against Nestle (among others) on behalf of three Malian
children. The suit alleged the children were trafficked to Côte d’Ivoire, forced into slavery,
and experienced frequent beatings on a cocoa plantation.

Corporate failures

What is corporate failure?

The term corporate failure entails discontinuation of company's operations leading
to inability to reap sufficient profit or revenue to pay the business expenses. It
happens due to poor management, incompetence, and bad marketing strategies.

1) Blockbuster

2) One extraordinary example of the failure to innovate was one of the largest DVD

rental companies, Blockbuster. With a huge high street presence and intense customer

loyalty, Blockbuster really was a household name. The company commanded

enormous resources at it’s peak and were primed to lead the market with an

innovative digital offering. By failing to innovate with their digital, the business, it’s

high rents and overheads started to lose ground to DVD postal services and early

stage streaming services that were coming to market, for example Love Film. To

compound their mistake, due to the market position Blockbuster had the opportunity

to purchase the fledgling company Netflix, a relatively new business offering a postal
 service. Netflix would sell 49% share of the business and take on the blockbuster

name.

3) With a chance to buy Netflix on a couple of occasions and their decision not to,

Blockbuster clearly never envisioned a future for streaming. As they never saw home

streaming having a promising future, they also never realised that the world was

developing a system where every single task could be done while sitting on your

couch. It’s easy to look back and berate Blockbuster here but the true lesson is small

and large companies alike need to continue to put time and budget into R&D and

innovation. As CEO of Netflix Reed Hastings said, “if Blockbuster had launched their

own streaming service two years earlier, Netflix may never have happened”.

2)Polaroid
Polaroid was founded in 1937, was Americas early high-tech success stories.  It is best known
for its Polaroid instant film and cameras. Polaroid has been a trusted global brand for 80
years. Edwin Land first conceived of the instant camera in 1943. We embrace the nostalgia
inherent in our past, allowing us to embrace old technologies through new technologies and
beyond.

Reasons for the failures:

Failed to adapt to the changing in technological trends. Didn’t anticipate digital revolution in
photography (the leaders of the company continued to believe paper prints were what
customer wanted they were great people who failed). Lack of innovation. Poor marketing
management. Inability to distant themselves from instant camera roots.In 2001 boom in
digital photography the company filed for bankruptcy

Polypeck:

TOWER RECORDS
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.