This post was last Updated on November 4, 2022 by Himanshu Tyagi to reflect the accuracy and up-to-date information on the page.
Business is a profit-driven enterprise. The right thing is the decision that makes the most money. Well, that depends on who you ask. Regulatory standards need to be met, but there is also the court of public opinion—good folks with money in their pocket and plenty of options for spending it.
Corporations that want to keep these people coming back need to do right by them, not just with the products and services they produce but also with their impact on the communities they serve. It’s called corporate social responsibility and can be aided significantly by the right technology.
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What is Corporate Responsibility?
The name here is pretty descriptive. Corporate responsibility refers to corporations’ responsibility for the public they serve. Naturally, this will have different meanings depending on what the business in question does.
For example, the chemical company DuPont found itself in hot water around fifteen years ago when it got slapped with a massive class action lawsuit brought against them by the people of Parkersburg, West Virginia.
One of the chemicals responsible for Teflon was winding up in the water supply, resulting in severe illnesses including but not limited to cancer. Farm animals that drank from local water sources were dying horrible deaths.
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The ensuing fallout resulted in many years of legal battles, during which time DuPont desperately clung to their innocence well past the point of absurdity.
Environmental corporate responsibility is an obvious and classic example, but as the times change, so do the obligations of corporations. You don’t want the chemical company at the edge of town to poison you, but you also don’t want your preferred hotel chain to lose your sensitive private information.
That’s what Marriott did in what turned out to be one of the most significant data breaches in the history of the modern world. It was revealed in 2014 that something like 500 million customers had information lost after a lousy actor got in through a — and this genuine — spam email.
The companies caught in these compromising positions never look good, but the truth is a little more complicated than one might assume. Sure, gross negligence plays its part, but the truth is that it can be tough to anticipate every outcome.
We know that Teflon has deadly chemicals in it now, but that is only with the benefit of hindsight. And who would have guessed that such damage could be done just by opening the wrong email?
Big businesses have a lot of responsibility. Technology can help them manage it effectively.
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Supply Chain Management
We talked earlier about the corporate obligation not to actively harm. But isn’t there also an obligation to keep the product on the shelves? Indeed, that can be the case for items that people depend on to survive or at least live everyday lives.
It wasn’t so long ago that baby formula was in desperately short supply. The situation was admittedly nuanced. The formula supply chain security was already against the ropes thanks to Covid related productivity lags and labor shortages. There’s no blaming a company for that. Who could anticipate a once-in-a-century health pandemic?
But then the hammer came down. In the spring of 2022, Abbott Labs — one of only three major formula suppliers in the United States, was forced to shut down its plant in Sturgis, Michigan. The culprit? Bacterial infections linked to the plant had already resulted in at least two infant deaths.
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Regarding corporate accountability, we’re looking at two problems here. The first is obvious —putting out dangerous products for human consumption is a significant violation of big businesses’ responsibility to the communities they serve. And the fact that the victims, in this case, were infants makes it even harder to swallow.
Big, lousy strike against Abbott. But then, the factory shut down. Because they failed at one aspect of their corporate obligation to the public, the national supply of formula shrunk to a tiny fraction of what it once was.
Parents spent hours driving from store to store only to be met by empty shelves. Scalpers took to eBay, selling bottles of formula for criminally high prices. Suddenly, one terrible mistake became two.
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How Technology Can Help
The formula problem was a supply chain issue. The United States relied too narrowly on one supplier for a significant portion of a product that — while not used by everyone — is entirely and unavoidably necessary for the people who need it. Namely, babies.
Of course, even the best tech stack can’t be used to strike a rock and magically produce a formula. It can, however, be used to identify and connect new supply chain solutions. Instead of getting formula out of Sturgis, maybe stores could be stocked by a Canadian manufacturer.
Abbott could also have benefitted from technology to better fulfill its obligation to the public. After the voluntary recall and subsequent factory shutdown, safety and health violations were reported for months.
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It’s not precisely clear how Abbott responded to these complaints. However, we know they bitterly denied any responsibility for the ensuing deaths, even while framing the decision to recall what formula remained on the already emptying shelves as the “Right thing to do.”
What if instead of playing the classic deny, deny, deny game that so many corporations delight in, they’d viewed the situation proactively? Taken the complaints seriously, used analytic software to map out where their violations were taking place, and then corrected them?
Lives might have been saved, and a genuinely catastrophic product shortage might have been avoided. Alas, what could have been?
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Better Reporting
Jeffery Wigand used to work for big tobacco. He was not necessarily the most sympathetic figure in that regard, though the evidence would eventually show that maybe he had his heart in the right place. Regarding corporate responsibility, it’s hard to imagine what that looks like for tobacco companies.
Because we know that they produce a product that kills people, they know it too. How much more irresponsible could you get?
Well, let’s ask Jeff. Jeffery Wigand was formerly the Vice President of research and development in our nation’s third-largest tobacco producer– Brown & Williamson Tobacco Co. He was eventually dismissed after raising concerns about what they were putting in their products.
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It’s tobacco! How much worse could it possibly have been? Ah. We’re glad you asked. After exiting his corporate job, Jeffrey appeared on 60 Minutes, where he famously revealed that tobacco companies were deliberately manipulating the nicotine content in tobacco to make it even more addictive than it already was.
That isn’t good. It’s also an excellent example of how things could have, should have, and would have gone with ethics and a tech-driven reporting system.
Big corporations like Brown and Williamson are too large to monitor employee concerns manually. Now, Wigand wasn’t some entry-level factory employee in this particular case. He knew the CEO and had a voice in how decisions were made. His reporting should have been visible and taken seriously.
However, employee-driven red flags often come from people who don’t have Wigand’s sway. In these situations, reporting technology can make it much easier to track dangerous violations and make corrections in real time.
These complaints can even be logged anonymously so as not to discourage people from stepping forward.
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Data-driven Decision Making
Data is something of a loose word because it just means information. That can come from anywhere, even in this context. For example, Factory X has taken up a prime spot in Town Y.
The people there were hesitant at first. They know what factories can do to a community. Pollution. Eye sores. The like. But Factory X is a progressive type of business. They care about their community.
They care about their employees, and they aren’t going to make the kind of mistakes and cover-ups that hurt the people they are supposed to be serving.
For a year, things go pretty well. The community warms up to Factory X. They are a great supplier of jobs. As they said from the beginning, their actions indicate a willingness, neigh, a passion for sustainability, and eco-friendliness.
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Everyone is happy except for Bob. See, Bob owns the house nearest to the factory. He claims the emissions from their smokestacks are triggering his asthma.
What is a company to do? Indeed, they can’t close up shop. And they aren’t like the other businesses on this list, so they won’t try to sweep the problem under the rug either.
What do they do instead? They fall back on the data. For the next several months, they monitor their emissions very closely and evaluate them against national averages and healthcare outcomes related to those figures.
The conclusion? Bob’s asthma might be worse than it had been in the past, but there is no correlation between them and it.
Of course, that’s just one example of many potential scenarios. Remember that at its heart, data is all about recognizing patterns and turning them into actionable insights.
In this case, the pattern was emissions relative to respiratory health. In other situations, it could be used to reduce carbon footprints, improve factory safety, or avoid ingredients that could have serious public health consequences.
Under the watchful eye of a well-trained analyst, those figures can then be used to make better decisions in the future.
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A Common Element?
The stories above are colorful, scandalous, and outrageous enough to provoke our inner sense of self-righteous indignation. And yet they do have common factors that are worth exploring a little bit more.
A mistake is made. Of course, it is. Mistake avoidance is at the heart of corporate responsibility. Big businesses try to avoid doing things that generate bad headlines.
A cover-up makes things worse. This wasn’t unanimously the case, but in most of these stories, there was a moment where the corporation could have come forward and said, “You know what?
Yes. We did terribly.” Instead of insulting the consuming public’s intelligence with pre-k caliber denials, they could have owned up and cleaned the mess quicker.
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A tech solution emerges from the fog of catastrophe. It has to because that’s the premise of our article, right? It wouldn’t be featured here if there wasn’t a tech-based solution.
Conclusion based on these common elements? Corporate responsibility is achieved through goodwill and a desire to always progress toward the most sustainable and effective solution to problems.
This attitude is admittedly costly. However, it’s not nearly as expensive as the fallout from most catastrophes described above. It’s so much better to be the company that spent five million dollars avoiding a problem than it is to be the one that spent ten million trying to sweep the problem under the rug.
Tech can’t fix everything, but it can help avoid many problems and make the ones that do slip through the cracks easier to fix.
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In Summary
Still, it takes more than just going through the motions to fulfill your corporate responsibility truly. If you want to be a good steward of the communities your business operates within, it’s essential to make your efforts sincere and constant. Not only will this help you avoid pricey fallouts (big mistakes can cost hundreds of millions of dollars), but it will also make sure that your business fairs well in the court of public opinion.
