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GENERAL MOTORS: THE FAILURE OF CORPORATE SOCIAL RESPONSIBILITY

The actors that perhaps hold the most ability to impact our surroundings, both negatively and positively, are large corporations. Corporations not only have the power to affect our natural environment, but also our cultural norms and expectations. However, occasionally, corporations do not hold up their end of the bargain. Such was the case over the past few months with General Motors and its recall of over 28 million cars in the year 2014 alone.

One of the tenets of a working society, and of sustainability, is the ability for individuals to trust that the entities with which they do business have more than simply their bottom line in mind. This is one of the key aspects of what is known as corporate social responsibility (CSR), an idea that is central to the idea of sustainability.

Perhaps one of the most important contributions of the 1970s to the concept of CSR took the form of Nestle’s huge public relations disaster that stemmed from its marketing of baby formula in developing countries. In 1980, the 33rd World Health Assembly adopted the recommendations that came out of the WHO/UNICEF meeting and charged the two organizations with drafting a code for the marketing and promotion of infant formulas. The International Code of Marketing of Breast-milk Substitutes was adopted by the World Health Assembly in 1981 and was ultimately supported by 118 countries, with only the United States voting against it.

Despite the fact that the United States voted against the Code, multinational corporations started taking notice of the benefits of CSR for their public images as well as their bottom lines.  

Over the past few months, General Motors has recalled over 28 million vehicles due to safety problems associated with faulty ignition switch in many of its models, most notably the Chevrolet Cobalt.

By GM’s admission, the defective switches caused more than 50 crashes and at least 13 deaths. Thissafety problem went unmentioned and unfixed by GM engineers for 11 years. In his report, Valukas writes that GM continued to view theswitch problem as “annoying but not particularly problematic.” Once the problem was thusly defined, Valukas continues, “the switch problem received less attention, and efforts to fix it were impacted by cost considerations that would have been immaterial had the problem been properly categorized in the first instance.” 

The question, though, is whether or not a mea culpa is going to be sufficient enough to undo all of the damage that has been done to General Motor’s reputationover the past eight months.

In the case of the recent GM recalls, a state agency, NHTSA, wilfully ignored information concerning the health and safety of people travelling the highways of the United States and did not put pressure on General Motors to address the issues at hand.

Have we passed the point where we can assume certain levels of corporate social responsibility? Can individuals and corporations together, as the EPA mentions, fulfil “the social, economic and other requirements of present and future generations?” Or will GM’s irresponsible use of power, as Davis predicted, cause the company to lose its impact in the car market? This all remains to be seen.

 

The gLAWcal Team

POREEN project

Thursday, 31 July 2014

(Source: The Highbrow Magazine)