Source: TOMS: One for One

We’ve learnt in class that when a business has corporate social responsibility, it adopts a certain set of values involving initiatives or practices that hold a benefit towards society.  This could be done through addressing economic or social issues, and legislative issues perhaps such as labour laws.

I was inspired to learn more about CSR because of Grace’s post about Starbucks’ corporate social responsibility initiative.  From her post, I can definitely agree that CSR can be used as a powerful marketing tool which can enhance a brand’s image greatly however, I hold a more skeptical view of major corporations and their CSR initiatives.  Personally, I wouldn’t view Starbucks as any different after learning about their initiatives because I know that my purchase is not directly going to fund their CSR.

After reading her post, I looked up other companies who are actively participating in their CSR initiatives.  A company that I came across was TOMS.  One of the company’s CSR initiative is the “one for one concept” where the company promises to donate a pair of shoes to a child in need whenever they sell a pair of shoes.  This has not only helped the impoverished children but the brand has also created over 700 jobs; with an equal ratio of male to female employees, in the regions where they donate their shoes.

From my point of view, the whole initiative just seems too good to be true.  Having studied Economics and Global Development for the past 2 years, I highly question the effectiveness of the company’s initiative as I believe that it might actually have a negative impact the development of the impoverished nations. 

By providing large amounts of aid to the countries, TOMS is simply hindering development and making the countries reliant on aid.  The company claims to provide employment to the local community by setting up factories in developing nations however, that could easily be used as an excuse for the company to exploit the natural resources used and also to take advantage of lower wage systems.  Furthermore, by producing in the developing nations, the local markets would be disrupted – local shoemakers would be replaced by a large Western corporation; which is TOMS.

We as consumers have to be thorough in our research before purchasing a product because we have the choice to choose between putting our money into something that will have a positive impact on the community or giving our money to major transnational corporations at the expense of local corporations.

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Sources:

C.W. “Putting the Boot in Development.” The Economist. 27 October. 2014 <http://www.economist.com/blogs/freeexchange/2014/10/economics-toms-shoes>

TOM’s production. <http://www.toms.com/production>

TOM’s One for One Campaign. <http://www.toms.fr/gift-of-shoes/>

Jacqueline’s post touched upon the fiasco between Apple and the FBI which happened after the San Bernardino shootings where the FBI asked Apple to develop a software in order for the FBI to unlock the shooter’s iPhone – which Apple refused but the FBI managed to unlock the phone in the end.

Through reading her post, I do agree with her view that Apple did the right thing by sticking to their policy and protecting the privacy of their customers, however I don’t quite agree with her suggestion of a rule for the company to only unlock a specific phone to avoid allowing the FBI access to people’s phones.  This is because I think that once a software is developed to unlock a phone, it will always be there.  The company can claim that the software would only work on one certain device however if the algorithm was already developed, it will inevitably be misused, perhaps hackers might gain access or even employees within the company might leak the software or “sell” it to a different source.  If this occurs, Apple’s customers’ safety would be highly compromised and it could bring about a large amount of bad publicity.

I did some further research on this issue and came across the Scientific American’s blogpost.  The post briefly outlines the issue at hand and also talks about the increasing uncertainty and threats of the protection of our privacy through social media or most big tech companies.

In the post, it was also mentioned that companies such as WhatsApp and Google are “doubling down” on their data encryption.  However, even with all the so-called advanced data encryption promised, I am still skeptical and I take the Snowden view that the government has the ability to access all the personal information that is put online.

I strongly agree with the closing statement that, “tech companies and law enforcement should be focusing more on new models of data protection and access that build rather than erode trust in the system”.  I think that if the tech companies collaborated with law enforcement to develop these new models of data protection, they must provide complete transparency in order for consumers to feel comfortable and safe with the privacy protection.  Perhaps they could do this by outlining how the data protection software was formulated and provide complete disclosure if the law enforcement is allowed to access certain information in the consumers’ phones.

All in all, I think that both posts I’ve mentioned were interesting and insightful to read. 

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Sources:

Skilton, Mark. “What the Apple versus FBI Debacle Taught Us.” Scientific American. 20 May. 2016 <https://blogs.scientificamerican.com/guest-blog/what-the-apple-versus-fbi-debacle-taught-us/>

Image:

http://logok.org/apple-logo/

Hong Kong has its own fair share of pet cafes, catering to dog and cat lovers.  However, co-founder of Rabbitland Cafe, Ricky Lam, was inspired to open up the first ever rabbit cafe in Hong Kong after falling in love with rabbits following a visit to Okunoshima, Japan’s famous ‘rabbit island’.

Located in the busy commercial district of Causeway Bay, Rabbitland Cafe is home to 12 rescued rabbits, most of them have been abandoned by previous owners.  Rabbitland Cafe is a place where people can have fun spending time and playing with the rabbits whilst enjoying drinks and light snacks.  In addition to that, one of the co-founders, Teddy Chui, claims that, “a lot of parents bring their kids here if they want to buy a rabbit, so they know it’s not all about playing with them – it’s a lot of work and responsibility”.

Photo credit: AFP/Getty Images 

The trend of pet cafes began in Taipei, Taiwan – the first one named “Cat Flower Garden” opened in 1998.  The popularity of pet cafes spread rapidly – especially in newly industrialized East Asian countries such as South Korea, Japan and Hong Kong, and more recently spreading to Singapore.

The rise in popularity of pet cafes in Asia can be explained by the extremely high living costs.  Many residents can only afford to live in small apartments or condominiums and most of these buildings may not allow pets.  The working culture in Asia could also serve as an explanation for the rise in pet cafes.  In countries like South Korea and Japan, it is not unusual for people to work twelve hours or more in a day.  Long working hours and a small living space is not the ideal combination for raising and keeping pets.

This is where the pet cafes come into play.  These cafes mainly target customers who love animals but are not able to keep their own pets, and the businesses aim to provide their customers with the feeling of companionship and comfort from having a pet.  Pet cafes are also a popular destination for tourists as the concept is unique to Asia, although the trend is slowly making its way to Europe and North America.

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Sources:

http://www.ctvnews.ca/lifestyle/hong-kong-s-rabbit-cafe-hops-onto-high-street-1.3039708

Samsung hasn’t been looking very well lately. The release of the Samsung Note 7 has stirred up major controversy as reports of batteries overheating and exploding surfaced – which even led to the Federal Aviation Administration (FDAA) advising against packing the cellphones into checked baggage. The recall of 2.5 million units of the exploding Note 7 cellphones has been dubbed,

“the smartphone industry’s biggest recall to date” – Wall Street Journal

On Friday, September 9th, the company’s market value dropped by more than $10 billion, and dropped another $15.9 billion the following Monday.  Aside from the major drop in shares, there has been many reports speculating that the cash costs of the recall is estimated at $1 billion.

Image courtesy of Forbes

The Note 7 catastrophe does not only bring harm towards the company in a financial stance, but more importantly, their brand image and reputation would be heavily affected.  In my personal opinion, the short-term financial losses suffered by the company now are minuscule compared to a loss in customer loyalty and confidence; which may potentially have a larger effect on the business in the long term.

Even though Samsung claims to have solved the issue of defective batteries,  putting the Note 7 back on the market very soon, some consumers (like myself) might still be wary of the product.  The possibility of losing consumers is very high especially since the smartphone and technology market is growing at such a rapid pace, and also the company’s largest competitor, Apple, has just recently released the new iPhone 7.

The brand has not been able to recover completely from the crisis yet, especially because of the recent reports of exploding top-loading washing machines from the company.  And prior to that, the company has already recalled 70,000 washing machines in Australia after claims of the machines causing fire.

Perhaps the full-blown disasters indicate that it would be an appropriate time for Samsung to conduct a SWOT analysis on the approach they should take to come back up into the market.

I think that the company should invest more into its operations department.  They should be focusing more in the quality control section – for example, conducting more tests on the products before they are released into the market.  Aside from that, the company should also invest more into its research and development department in order to develop better ways to engineer or produce their products to ensure a higher safety standard.

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Every single action taken by a firm will inevitably affect their stakeholders. Operating as an ethical business can bring about many benefits. It can strengthen the public image of the company, attract potential investors whilst keeping the existing ones, basically keeping all the stakeholders happy.

The concept of having an ethical business is a very diverse one and exists in every single industry. It ranges from the food industry producing dolphin safe canned tuna or non-GMO food products, to cosmetic companies manufacturing non-animal tested and free-trade products. There are a million examples of businesses acting ethically.

In my post, I would like to touch upon the ongoing debate on whether pharmaceutical companies are more concerned about maximizing profit than they are in the consumers’ health. Pharmaceutical companies have long been criticized for many of their practices which many analysts claim to be unethical. Many of these major companies abuse their intellectual property rights, limiting the production and distribution of generic drugs, allowing the major pharmaceutical companies to set sky-high prices for their drugs.

The issue of limited production of generic drugs boils major controversy especially when we consider developing countries that are suffering pandemics such as HIV/AIDS or malaria, which could be cured or treated by medicines which are already on the market but cost a fortune.

Take the case of Martin Shkreli. Shkreli is an American entrepreneur, founder and former CEO of Turing Pharmaceuticals. He was dubbed the most despised man in the world because of what he did with the Daraprim drug. Back in August 2015, he purchased the rights of Daraprim; a lifesaving, anti-malarial and anti-parasitic drug most commonly used to treat patients affected by HIV/AIDS, for US$55 million, and the price of the drug hiked up from $13.50 per tablet to $750 tablet. This meant that insurance companies or patients would suddenly be paying hundreds of thousands of dollars a year for treatment. Shkreli claimed that his actions were necessary as the company needed to turn a profit on the drug, claiming that Daraprim was still underpriced, comparing them to cancer drugs.

Another example of the questionable ethics of pharmaceutical companies is the 400 per cent price hike of the Epinephrine or EpiPen auto-injectors; which are used as an emergency treatment for people who have severe allergic reactions.

Pharmaceutical companies know that the drugs they distribute can be vital to one’s survival yet they blatantly exploit the people who need them the most. Now is this what an ethical company looks like?