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Reebok: case study for Corporate social responsibility
Reebok
Ethically unemployed
Nov 28th 2002
From The Economist print edition
Corporate social irresponsibility
HOW little the dangerous fashion for corporate social responsibility has to do with a truly responsible attitude by businesses is aptly shown by Reebok International. This American sports-goods supplier claims to have pioneered good corporate practice.
Doug Cahn, the company's head of human rights, talks about values, fairness and principles, with all the zeal of an anti-corporate lobbyist. He presents the news that Reebok has just decided to withdraw business from a subcontracted factory in Thailand as a proof of corporate caring. The reason: the 400 or so workers employed there to make shorts and shirts were working for more than 72 hours a week.
It is responsible to press for better standards, but the supply of good jobs matters too. Workers at this Bangkok factory were paid above the minimum wage, with health-and-safety rights that few local manufacturers would offer. Many factory employees in developing countries want to work more hours rather than fewer.
Although Mr Cahn denies it, the company seems to have pulled out to avoid allegations that it was doing business with what critics call a sweatshop. "There are always people outside who want to talk with our factory workers to check our standards," he says. Reebok has been stung before. One troublesome former factory worker in Hong Kong, Han Dong-fang, hosts a radio show calling for workers to telephone with their complaints. "He is a lightning rod for criticism," says Mr Cahn, before adding quickly that "criticism is one of Reebok's most valuable resources."
Reebok may not have done its shareholders a favour either. If a clean corporate image boosted sales in the developed markets, it might be worth paying the price of finding a new factory. Yet astonishingly, given Reebok's long involvement in ethical trading, it does no research to correlate social responsibility with sales or shareholder value, says Mr Cahn. Nor does he know what his division costs the company. Since the most ethical way to do business is to attract investment and offer more people a way out of peasant labour, perhaps this practice should be relabelled corporate social irresponsibility.
More on Corporate social responsibility from the Economist:
What does corporate social responsibility really mean?
Corporate social responsibility (CSR) blossoms as an idea
Corporations need to be socially responsible to build their "reputational capital"
Corporate social responsibility is all the rage - does it mean anything?
Anglo-Saxon corporation: case study for Corporate social responsibility
Reebok: case study for Corporate social responsibility
CORPORATE SOCIAL RESPONSIBILITY (CSR) Policies
The world according to CSR
Companies that merely compete and prosper make society better off
Good corporate citizens, and wise governments, should be wary of CORPORATE SOCIAL RESPONSIBILITY
Source: The Economist
CONTENT COPYRIGHT The Economist. THIS CONTENT IS INTENDED SOLELY FOR EDUCATIONAL PURPOSES.
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