Earlier this year, Reebok International Limited, well-known manufacturer of shoes and apparel alike, was accused of producing false facts in marketing their “EasyTone” and “RunTone” shoe line. As of today, Reebok has agreed to pay a $25 million refund towards settling the lawsuit made by the Federal Trade Commission (FTC).

Since 2009, advertisements promoting Reebok’s “toning” shoes, claimed the shoes were able to strengthen one’s leg muscles by 11%, and tone one’s buttox by 28%. According to the FTC, these “proven” facts were unsupported. However, the claims were a huge success and Reebok generated $1 billion dollars in revenue in 2010.

“Settling does not mean we agree with the FTC’s allegations; we do not.” – Reebok Spokesperson.

Aside from the somewhat absurd claim that these oddly-shaped shoes can tone one’s body rather than create injury, Reebok’s “11%” and “28%” strengthening and toning facts respectively, are questionable. Blatantly speaking, if these facts were “proven” true, why was Reebok unable to provide said proof? Consumers from now on will question the validity of Reebok’s new product claims and feel deterred from making a purchase. As discussed in class, consumer perception of the Reebok brand has faltered. Reebok now has the difficult task of reestablishing themselves in the consumers’ mind and mend this negative point of difference.

Article: Here

In “Four Strategic Generosity Lessons”, Rosabeth Moss Kanter discusses the corporate responsibility of “giving”. Kanter compares the act of giving or “gifting” to a trojan horse and argues that a company’s donation can be viewed as having ulterior motives if performed at the wrong times, making community figures wary of “outsiders bearing gifts”.

Back in 2010, CEO of Facebook Mark Zuckerberg, with Microsoft founder and successful investor Bill Gates and Warren Buffett respectively, signed the Giving Pledge. This pledge allocates half their income over time to charity. When the Gates-Buffett duo took on the lead for the pledge, it’s interesting to note that business leaders soon followed after. This makes us question the followers’ genuinity for the cause, or whether they’re driven by peer pressure. When Zuckerberg donated $100 million to the Newark school district, this donation intercepted with the release of “The Social Network“.

Publicity stunt? Hard to say.

This case reminds us of Friedman’s “Social Responsibility of Business” where he asserted that a company’s responsibility is to make profits for its shareholders. Even if Friedman is correct about classifying Zuckerberg as such, we must face the fact that $100 million has been donated to Newark students so they can have equal education opportunities. The strategical bonus was the Facebook brand’s “better image” at the expense of the genuinity value.