Welcome back to another episode of the corporate Cowboys podcast as we continue in season seven this is episode six as we read chapter six of the naked Corporation how the age of transparency will revolutionize business the authors of this are Don Tapscott and David T Cole published 2002 by Free Press
My name is Alex if I haven’t mentioned that I’m your host and I will be reading this to you providing some commentary along the way but for the most part we’ll try and keep it uh coherent continuous so that there isn’t any misinterpretation or miscommunication from this book to your ears
Chapter six customers in a transparent world we have spoken of a power shift to employees there is another shift thanks to transparency to customers but it cuts both ways companies know even more about their customers in the past firms relied on surveys to discern customer preferences today massive exquisitely detailed databases track customer
Behavior at a time a larger at at any time at any time a larger retailer knows which models of genes sold in the Cleveland store in the last hour if purchased with a credit card the company also knows the purchasers buying habits information tailor-made for custom marketing campaigns for years
Customers have been on the wrong side of a one-way mirror and just a side note here if you hear me go back and repeat a paragraph It’s because that’s what this podcast is for it’s for me to be able to practice to hone my craft as an orator as a public
Speaker so if I go back pronounce enunciates you know verbalize thoughts that’s what this podcast is for this is professional development in real time as you learn about the naked Corporation imagine that I’m multitasking today continuing today all that is changing as customers peer back and take
Action on what they know with seismic effects customers have increased access to knowledge about products and services and they can discern True Value more easily to compete firms need truly differentiated products better service and lower cost or so sorry it’s or or lower cost more than ever because
Deficiencies and value cannot be hidden as easily companies can’t make garbage smell like roses and increasingly they need business Integrity because it becomes part of a brand customers can increasingly hold corporations accountable for everything from Integrity to product and service value open Enterprises understand this power shift and embrace it
A vignette from a business where customers were completely and the dark makes the point some mail order camera Merchants are notorious for sleazy sales tactics and fraudulent Behavior they typically advertise jaw-dropping Bargain Basement prices on the back pages of Photography magazines the goal is to get the
Customer to nibble the bait that is dial an 800 number once on the line their sales people employ time tested techniques to hook the gullible buyer they range from bait and switch to a higher priced product for to stripping Out Accessories that normalize I [ __ ] that sentence up I’ll go back
They range these these time tested techniques they range from bait and switch to a higher priced product to stripping Out Accessories that normally come with the product and selling them for inflated prices Sky High shipping charges are another favorite tactic for these crooked companies the internet is
A godsend no longer forced to buy pricey magazine ads these companies build attractive websites at relatively low cost they claim to be among the country’s busiest dealers they rely on price comparison websites to hook the suckers for them since their ultra low prices beat any legitimate competition
The only recourse I left because this is still employed in 2023 it’s not like sales have gotten better I mean it’s not like sales techniques or sales tactics have improved in in in ethics um in Integrity no it’s just the same techniques and tactics these are time tested techniques from 2002 to 2023
Which is today’s year which is the current year continuing for these crooked companies uh I’ve already read that the only the only recourse consumers really have is to use the internet to warn one another a popular site for intelligence gathering and sharing is www.photo.net where thousands of customer horror stories are posted and
Organized by store name the site has also hundreds also has the sites also has hundreds of stories from Happy customers who gots good value and service from reputable stores and in this page they include figures 6.1 and figures 6.2 uh what these are graphs graphs essentially to gather
Information prior to Major prices so this is a survey that was done in countries that was asking survey takers uh whether or not they gather information prior to Major Pisces and the options were strongly agree or somewhat agree and um they go from India Brazil United States
Italy on down to like Spain so a lot of the developed and developing countries I want to say um and for the most part for the most part the ones at the top uh uh damn should I read them off I’m over here getting lazy reading you
Guys graphs but only because this is dated information right so this is from 2002 uh from in 2023 I want to say that gathering information prior to a major purchase we’re talking anything from uh office equipment uh home supplies even nowadays and some folks are even gathering information prior to going out
And getting groceries so yeah if you’re not out shopping or comparing prices for significant purchases you’re [ __ ] up you’re dropping the ball right figure 6.2 is another graph it’s labeled consumers have power to protect themselves against unfair slash dishonest practices by a company and they’re taking this poll again in developed and developing
Countries as to whether or not they agree or disagree that consumers have power to protect themselves against unfair or dishonest practices by a company for the most part for the most part companies tend to agree towards the bottom of the graph what is it uh one
Two three maybe four one of them is on the fence uh do do not believe that consumers have the power to protect themselves and actually I’ll give you the names of these countries that’s France South Korea Japan and Russia they do not believe that consumers have the power to protect themselves against
Unfair and dishonest business practices draw from that make whatever inference you want from that information from 2002 that you want right so that’s dated information but it may still be applicable in 2023 you may draw some inferences that can help you in your day-to-day life continuing then in 2001 Don Wills a
Brooklyn computer programmer and Avid photographer resolved to help prevent fellow shutter bugs from being taken by crooked stores of which there were many in his City Wills traced the physical location of companies that ran the websites to with two good to be prices he then rode his bicycle around Brooklyn
Photographing the ramshackle graffiti adorned sometimes boarded up buildings these companies used often there would be just a mail slot with the company’s name written beside it in felt pen sometimes one address would correspond to half a dozen different online camera stores Wills posted the photos at the now defunctphotoprint.com
The photos were a Smash Hit and instantly became part of Internet folklore Wills used the same tool the internet to expose the crooks that the crooks use to perpetrate their crimes throughout the economy the transparency opacity battle rages on food companies resist labeling the products as genetically modified old style firms
Hide product inadequacies companies with high price structures work to keep customers ignorant but the forces of opacity are in Retreat and smart firms know this customers have a growing sense of their own power most people in G20 countries feel empowered as consumers according to a 2001 survey by environment in vironics environment
Environics yeah there we go environics International two-thirds of those surveyed believe that consumers have the power to protect themselves against unfair or dishonest practices by a company in Russia Japan South Korea and France only a minority of consumers felt empowered side note yeah side comment those are yeah those
Are the uh the graphs that I just listed where consumers now shop with shop for information no shop with information right so go out gather information before shopping for significant purchases and whether or not they can protect themselves from dishonest practices uh six figure 6.3 is also listed on this
Page and I’ll describe it for you in brief figure 6.3 is labeled is named uh do not hesitate to complain to companies so essentially they’re taking a poll uh in developed and developing countries as to whether or not consumers hesitate to complain to countries so if they do not
Hesitate then they agree that means that they go out of their way to tell them what a [ __ ] job what a [ __ ] product or [ __ ] service the company is giving them and for the most part for the most part A lot of the consumers and countries do this in developing and developed right
And developed and developing countries uh there are some countries at the bottom that don’t the ones that sit most on the fence are going to be uh France Indonesia Japan South Korea and Russia so I’m assuming that uh because the book just listed just described uh the past graphs we could
Expect it’s to mention this figure 6.3 also um so let me just start off where it left off here in Russia Japan South Korea and France only a minority of consumers felt empowered people aged 65 or higher and higher sorry people aged 65 and higher also tended to feel less able to protect
Themselves seven in ten people yeah it’s called elderly abuse Financial Financial elderly abuse elderly Financial abuse yeah I think that’s elderly Financial abuse if I’m not mistaken that is a tort legally that’s legally a crime people aged 65 and higher also tended to feel less able to protect themselves
Seven in ten people do not hesitate to complain to companies that produce or sell the products that they use over one-third of respondents are adamant about this aspect of their consumer Behavior better educated people those with higher levels of income and internet users are more likely than
Others to be ready to take companies to task historically customers care about price and value product utility quality innovativeness services and safety they also care about brands in the past an image or promise of a product or company increasingly there is a new kid on the Block values as customers want to buy
From companies they consider to be quote good and give back to the community nearly 8 in 10 U.S consumers say they can make a difference in driving responsible corporate Behavior three and four consumers also wants to learn more about how companies seek to be more responsible this combination of
Empowerment and desire to learn sets the stage for new kinds of consumer Behavior the next subheading here transparency and value consumers feel empowered because they have increased access to knowledge about products and services and they can discern True Value more easily more than ever customers can find out which cars
Perform best are safest and last longest which laundry detergents gets the clothes widest or gets closed the widest I’ve [ __ ] that one up which laundry detergent gets close the widest which flight is the cheapest which cell phone company has the best plans which book has great ideas and which vacation
Package is the best True Value comes to the fore and brand is not just an image but rather a measure of the trust and relationships firms need to be honest abide by their commitments and show they care about customer interests by providing Superior Products or lower cost as products become more complex product
Life cycle shorts in and consumers choices expand courtesy of the internet The public’s appetite for timely and dispassionate advice continues to grow debates long-raged and online news groups in areas such as photography audio components and cars as to which companies make the best products but few participants purport to be impartial
Observers most act as tireless tireless brand Advocates staunchly defending buying decisions they made and why professionals choose say Canon over Nikon or Porsche over Corvette in the late 1990s a number of.com companies sprang up to provide more neutral and structured forums for consumers to share views on products and services the largest
Eopinions.com covers over 2 million products and services in over 30 different categories along with the standard consumer electronics Fair of camcorder and computer reviews e opinions contributors offer advice on more exotic products such as wine men’s cologne movies and athlete’s foot remedies the goal is to give the consumer
Knowledge and confidence based on hearing the first hand unbiased experiences of other consumers rather than the opinions of a single so-called experts e opinions encourages opinion givers with money and flattery if you consistently submit high quality reviews of products and services that buyers find useful eat opinions will pay you
You will be acknowledged in the community as someone whose opinion should be respected the company says it goes to Great Lengths to Highlights the people behind the reviews so that visitors know exactly whom to trust in addition to user biography Pages review lists and the ability to comment
On reviews users can flag reviewers they don’t like and the reviews will be deleted from View conversely e opinions allows all users to build a web of trust that’s in quotes a web of trust a specialized a a personalized network of reviewers whose reviews and ratings they consistently find valuable
The company works hard to assure visitors that the opinions are unbiased traditional trade magazines that review products such as cameras or cars often refuse to publish negative reviews if a product is shoddy the interview the the editors claim they will quote work with the manufacturer to improve the product
Rather than publish the negative review they insist this ignorance is bliss policy serves the buying public better in the long run the truth is the typical car Enthusiast magazine depends on ad revenue from car manufacturers and it cannot afford to alienate any of them increasingly media Savvy readers see
Such policies for what they are their editors groveling at their advertiser’s feet some Publications such as Consumer Reports feel the only way to avoid this potential conflict is not to accept advertising that’s nice nicely done Consumer Reports because they can remain unbiased and unbought that’s just a sad comment continuing
Aiken a competitor of e opinions is consumersearch.com which Aggregates product reviews from other websites and traditional Publications We Begin by looking for the best reviews both on and off the internet and then we rank them according to how well we identify the category’s best products next we develop
Our full story reports analyzing whether the experts agree or not when they disagree we try to determine whose work is more credible finally we distill the results about which products are top rated and best in their class into our fast answers that’s end quote e opinions and consumer search deal with
A large array of products some aggregation websites deal with just a handful of products such as www.rottttentomatoes.com which specializes in movies creative created by movie buff sen dong in 1998 rotten rotten tomatoes had 2.7 million readers each month in early 2003 with more than 87 000 titles and 200 000 review links
Rotten Tomatoes offers a fun summary of the critical reaction on movies from the nation’s top print and online film critics summarized by the Tomato Meter if more than 40 percent of reviewers pan a movie it’s dubbed a Rotten Tomato Rotten Tomatoes is a much needed antidote to Studio advertising in the
Ads every film is a hit and a quote must-see often backed up by half a dozen film critics no matter how bad of the movie The Studios can drag up a few favorable quotes indeed as illustrated by the infamous ruse perpetuated by Sony every once in a while the quotes and
Critics names are complete Fabrications Sony’s advertising Executives created a fictitious critic called David Manning to pump up their films he was billed as a reviewer for the non-existent Ridgefield press in Connecticut bogus quotes and advertisements were attributed to Manning for a number of films including hollow man vertical
Limits and Rob Schneider’s the animal with Rotten Tomatoes viewers are given a representative cross-section of dozens of reviews the next little subheading here transparency and price now if I’m not commenting as much it’s because this stuff is mostly dry I’m not going to try to I’m not going to moisten
It for you for as dry as it is I’m going to power through if you understand what what is going on right as far as website aggregation equaling uh magnified transparency right if the fact that transparency is being facilitated and enabled by the internet right because this is 2002. this is this
Is this was published in 2002 so transparency apparently was you know just taking off and um aggregate aggregating websites aggregation websites were you know something new but today’s day and age aggregation websites it’s like Google Google was like the first aggregation site that pulls sites from across the web and shows them to
You on one web page right so that’s what an aggregation website is and what they’re talking about is that now consumers have the power to uh research reviews for specific products for specific items and services that they’re going out to shop for using aggregation websites so uh this next subheading transparency and price
You’ve done your research at manufacturers websites consulted services such as eopinions.com and chosen the CD player or camcorder that you want God damn this is from 2002 a CD player a camcorder all that [ __ ] is on your iPhone now all that [ __ ] is on your Android now [Laughter]
Damn 2002 was uh not a consumer’s Paradise but um what’s the term called an obsolete technologist’s Paradise man because they would put anything on the [ __ ] Market instead of integrating it all they were finding ways to to separate [ __ ] and create agreements off to the side to be
Able to to capitalize on on many monopolies damn it was [ __ ] the wild west it still is the wild west right because this uh the corporate world order exists to today right in in in the current age so corporate Cowboys never left if anything they’re deeper in corporate they’re deeper inside and
Outside of corporate and they run deep all right continuing the next question then who to buy it from a host of online companies strive to empower consumers by scouring the internet for the best prices on goods and services companies like bizrate.com my simon.com dealtime.com and pricegrabber.com offer
Advice on where to get the best value which in many cases is not the same thing as the cheapest deal as we saw with camera stores any scoundrel can build a website and claim to offer great products with can offer great products at unbelievably low prices quote the lowest price is
Often the one with the less than ethical business practices end quote says Chuck Davis chief executive for Biz rate to make its service more accurate and useful Biz rates now offers four additional metrics to separate good from not so good online merchants on time delivery did our products meet your
Expectations customer support and the bottom line question would you shop here again most price comparison sites offer similar ratings online comparison shopping sites such as Biz rates compile comprehensive ratings from Shoppers on a scale that was unimaginable prior to the internet in June in January 2003 Biz rate
Released a list of the sites that offered the best customer service during the 2002 holiday season the list was based on critiques offered by more than 1.5 million online Shoppers from November 25 to December 25 2002. Biz rates is unique not only for surveying customers at the time of purchase but by
Following up with email a short time after customers are scheduled to receive the product to see if they are still satisfied and just a side comment yeah most services do that today they’ll do that with emails they’ll do that with uh phone calls they’ll do that with texts
Even uh asking you to rate their service their product or service from like one to five or whether or not you’d shop with them again in the future and that supposedly in theory goes towards uh internal auditing right to find whether or not they should consider any changes
To their Logistics or support systems for their customers or clientele foreign price comparison continuing price comparison sites save legwork and give consumers confidence they are making a smart decision seeing how popular price comparison sites have become some Innovative online vendors now offer their competitors price on their own
Site rather than relying on third-party websites to validate their claims of good value Progressive and auto insurance company gives online quotes to customers who provide details about their age marital status car type and so on Progressive also calculates what its competitors charge the basis of insurance company rating data that
Companies file with state governments Progressive says it strives to make the comparison as accurate as possible since it is confident its product will consistently offer Top Value sometimes it loses to lower price competitors but some customers pay its higher rates because they conclude that it is a different kind of company worthy
Of their trust and business open Enterprises create trusting relationships in part because they exhibit transparency side comment yeah I mean if they’re being as transparent as possible and they lay out for you what their service provides what their rates will be alongside with their competitors rates I feel like that inspires confidence and
That inspires trust in the consumer with with the idea that because Progressive let’s take Progressive as an example Progressive was so open and so transparent with their prices with the the value that they provide going with Progressive is going to be a safe bet that what they buy is what they will get
You see that what they get that that they will get essentially what they pay for if they go with someone else who’s cheap with the cheaper rate right they may not get the best service they may not get service that’s as trustworthy service that’s as transparent as progressives it’s a good
Marketing tactic it’s a really really good tactic it’s a good technique to close continuing online purchasers are not the only ones who use online price comparison sites the main users are people who plan to buy in a physical store they go online to find out what prices are reasonable at their local
Merchants or to confirm whether an advertised super sale in their local newspaper is really a bargain price comparison sites can give the buyer a real sense of confidence and soon this Boon will be available over wireless devices as you shop in any store in 2002 pricegrabber.com teamed up with at T
Wireless to make its ratings available anytime anywhere tens of millions of people wouldn’t think about buying a car until they know what their local dealers paid for it and soon that information will be readily available on handheld devices see how you see how General how how vague they describe handheld devices is
Just handheld wireless devices it’s phones fam it’s phones it used to be what like pdas and other [ __ ] but it’s literally just phones now it’s phones it’s watches and uh I know that glasses smart glasses are now in the works but as of now they’re cell phones next subheading here next subheading is
Price Discovery price Discovery the rise of the Agora aguara a-g-o-r-a Agora transparency not only enables buyers to know more about Sellers and their goods and services to find the best deal or even to aggregate their purchasing power it is also starting to change the way prices are determined in digital Capital
We discussed that’s the book that’s their book digital Capital we didn’t read that but if you would if you are interested I suggest you go pick it up digital capital in digital Capital we discussed how new Communications media especially the internet facilitates price Discovery whereby buyers and sellers cooperate and compete to arrive
At a mutually acceptable deal our discussion was not restricted to online transactions but rather embraced business models that may transcend the physical and digital worlds we call these agoras in quotes agaras after the Greek word for marketplace in Ancient Greece and Agora was originally A Gathering Place for assemblies it
Later evolved to become the markets place of a city’s Center today the term applies to markets where buyers and sellers meet to freely negotiate and by doing so quote discover a price for goods agoras are enabled by and in turn facilitates transparency they work best when buyers and sellers
Know more about each other and the goods and services to be transacted as such they have the power to increase liquidity the ease of converting assets Into Cash agoras achieve liquidity by matching buyers and sellers and enabling them to discover a mutually acceptable price aguras historically served a special
Distribution function for goods of uncertain or volatile value these were typically unique distressed or perishable items and commodities for which supply and demand fluctuated continually unsuited to traditional fixed price models there is no price list the value of these Goods had to be resolved or discovered through direct negotiation between producers and consumers
With the exception of commodity exchanges and stock markets most traditional agaras have been limited by time and space by the transaction costs incurred in negotiating the price that is the time and effort entailed in doing so in an industrial age economy of scarcity buyers and sellers often preferred the predictability of fixed prices
Pre-internets large-scale auctions or exchanges were impractical success required a critical mass of buyers and sellers who wish to exact to exchange sorry I [ __ ] that one up pre-internet pre-internet large-scale auctions or exchanges were impractical success required a critical mass of buyers and sellers who wished to exchange the same good during the same
Time and use the same mechanism to communicate and conduct price discovery the only working examples were commodity and stock exchanges or limited auction events because of transparency negotiated transactions between buyers and sellers are challenging pricing habits and value allocation models in one industry after another usually one company or a Consortium
Acts as a market maker and sets broad rules it governs the nature of the playing field its boundaries player eligibility and the processes of competition after that participants make their own decisions without interference because of their multi-faceted and dynamic nature agaras presents nearly unlimited opportunities for innovation in price Discovery some Agra operators
Like on sale.com or ubid.com simply bring auctions to traditional retail Goods fxall.com describes itself as a multi-bank portal because it really provides the beginnings of an open market for foreign exchange and now accounts for nine billion dollars in trading daily author and consultant Mohan Swani oh I like that name
Sony Sony maybe it’s Sony yeah author and Consultants Mohan sauni that’s s-a-h-w-n-e-y solony argues that openness can strengthen relationships rather than commoditize them but only if you as a seller focus on value rather than just the lowest price he says transparency is only the enemy of profit
If customers are ignorance of the value you provide he encourages you to consider whether you are better off or worse off with an informed customer he encourages you to consider whether you are better or worse off with a informed customer essentially that’s that’s telling you um what’s the opposite of Caveat Emptor
Caveat venditor right where now the vendor now the seller has the caveat that the buyer is is in their bag is on their [ __ ] they’re not about to Fumble the bag because the seller thinks that they can hike prices up where they can skimp on service now the the the
Consumers the buyers have power to go out and research what the pricing is like compare pricing service compare rates Compare Quality before making the purchase continuing you need to understand what customers really value you may conclude that price is only one of several important variables one strategy is to
Develop flexible Market offerings that allow customers to choose the services they value and to pay for only those they use then quotes communicate your value proposition to ensure that non-price variables are fully Quantified unfortunately not all agaras are based on the notion of increased customer knowledge priceline.com deliberately
Keeps the customer in the dark as to price and product users submit bids on what they are willing to pay for a three-star hotel in downtown Chicago for example pricelines computers then look for a match if the buyer’s bid is high enough Priceline confirms the booking if
The customer will never know oh oops oops I [ __ ] that one up but the customer will never know if he could have bid lower or what other hotels were vying for his business alternatively if the bid is too low the customer is not allowed to re-bid this prevents customers from trying to
Discern the price floor or the floor price not all consumers tolerate priceline’s strategy of opacity at www.biddingfortravel.com Priceline customers come together to swap intelligence when we checked it out in March 2003 posters reported booking four star hotels in Manhattan for 75 dollars what that’s [ __ ] Wild the world champion of agaras is of
Course eBay profitable almost from the day it was conceived eBay is the heart of a nearly perfect business web it’s consumers whether sellers or buyers take on most of the work the cost and risk they carry the inventory do their own marketing and arrange for shipping it costs eBay next to nothing
To add customers and the company’s fees are 85 percent prepaid by credit card the source of eBay success is a transparency tool its reputation management system many companies would do well to learn from it it’s a simple idea every time you buy something eBay invites you to rate the
Seller was its sales pitch truthful did it meet its commitments did it go the extra step to make you happy you also get to score its performance on a scale of negative one to zero two plus one in a remarkable example of an online community at work about half the people
Who buy or sell on eBay reportedly take a moment to provide such feedback some eBay members now have thousands even tens of thousands of individual feedback items available for anyone to read imagine if General Motors or Walmart had something like this would it hurt or would it help Harvard political scientist Richard
Zekhauser and colleagues performed an experiment in which they auctioned several lots of vintage Valentine postcards on eBay one seller had an excellent well-established feedback record another using a new made-up identity had a little to no track record after 200 postcard sales the established identity had brought in 7.6 percent more
Sales more sales dollars on average earned reputation is hard to isolate in the real world whereas well-known Brands and personal contact introduce a variety of biases so this 7.6 Advantage is a striking little data point real companies quote unquote real companies can learn from eBay and some
Are doing so a growing number of big firms have many sites like eBay to auction Overstock and surplus merchandise Dell and IBM for example each auction Off Lease computers oops Yeah each auction Off Lease computers on a branded eBay store they submit to the disciplines of the rating system with
The attendance plaudits and pain this is great for consumers not only can they get a deal but they can also find out how other buyers rated the corporate seller but can they also get this at the seller’s own online store question mark surprisingly continuing surprisingly some companies have learned their
Customer feedback lessons well and even improved on them for example Bell and apple host a wide variety of customer conversations on their own websites and free with free speech as far as the eye can see at Dell customers debates whether it’s okay to say nasty things
About the company on its own site the discussion quickly turns into a heated battle on the relative merits of Dell and Toshiba laptops repletes with full color logos and the competition posted by Toshiba boosters meanwhile over at Apple someone complains about the earphones on her new iPod while another
Seeks help to eliminate scratching sounds when the machine plays MP3s does such free willing discussion help companies we’ve said there are lots of sites like eopinions.com where customers can go to review products isn’t it is it it’s better to host such activity on your own website observe the action and be seen
To take care and be seen to care about the firm’s customers you might learn something too for example Dell claims that revamped laptop models announced in March 2003 respond to customer demands from its online forum I mean this is all this is side comment this is all like well and fine right
Well and good because uh it shows that companies are are reading listening they are paying attention to Consumer feedback and they’re making appropriate changes in order to change in order to adjust the value proposition that they have for their consumers in the pursuit of more profits right so
You would think that better products better Services lead to more profit it has its drawbacks it has you know it can have its drawbacks too but I don’t know if the book will address them of course continuing of course inviting customers to self-organize on your own website is not without risks
What if they gang up on you the answer is as long as you meet their expectations show Good Will and avoid Firestone Tire type disasters this Firestone had flammable tires for those who don’t know go research go go look it up on any search engine Firestone flammable tires
And uh yeah no they [ __ ] up I don’t know if they caused the death or they caused like severe bodily injury but uh yeah they they were taken to court for it so as long as you don’t have as long as you avoid Firestone type disasters Firestone Tire type disasters
This should just be a good mechanism for keeping you on your toes and staying in touch indeed the Zeck Hauser study found that negative ratings had no impact on willingness to buy in fact transparent customer feedback forms can actually help push up prices as they used to say
In Hollywood I don’t care what you say about me just spell my name right that sounds Savage as [ __ ] but I doubt I came out of Hollywood the next sub transparency and customer values transparency and customer values blood diamonds also known as conflict Diamonds Are a textbooked example of an
Industry’s turning a blind eye to atrocities in its own backyard only to be exposed by transparency repeatedly armed factions in different African countries have seized diamond mines in order to convert the gems into cash for weapons and ammunition though conflict diamonds account for only four percent of the global Diamond
Supply they are responsible for enormous pain and suffering with more than 650 000 deaths in the angolan diamond-funded Civil War alone what a difference a little transparency can make as recently as 1996 the De Beers annual report blindly described how its record purchases of angolan diamonds ensured Global price stability
Most readers were not aware that the firm’s money funded weapons and ammunition purchases but as media reports and non-governmental organizations begin to educate consumers about the issue the beers had a dramatic change of heart in June 2000 in a June 2000 public letter to colleagues in the world Diamond industry the beers chairman
Nikki Oppenheimer wrote quote you will be aware that the role of diamonds as a source of funding for Rebel armies and Warlords in several African States has become a major political and media issue we are sure that you share our deep concern that the role appeal and value
Of diamonds as a symbol of beauty and love should not be sold by this connection with the atrocities of War nevertheless because of its previous Behavior De Beers was subsequently barred from handling angolan Diamonds by the angolan government in a bid to re-enter the market the beers insists it
Has mended its ways says the beer managing director Gary Ralph quote that was part of the old De Beers it is not part of the new De Beers we are not in the business of mopping up diamonds on the outside I don’t know when [ __ ] use verbiage like mopping up diamonds you
Know they’re mopping up [ __ ] Villages dog they’re still in the business I don’t give a [ __ ] what they say uh the child because if if they’re not still in the business then they’re sitting on blood diamonds right and they got to get rid of them somehow so they’re still in the [ __ ] business
You like once you’re in once you get blood on your hands that [ __ ] is not coming off doesn’t matter how many times you wash them you got blood on your hands having done it you cannot undo it it’s not it’s not like saying sorry saying sorry doesn’t bring back 650 000
Lives doesn’t bring back Villages getting wiped getting mopped up over diamonds it doesn’t bring that [ __ ] back that’s that’s business business is war you have to admit what you’ve done and either own it or or bow the [ __ ] out bow out the challenge I mean own it right right
Own it and change so like you know open up your [ __ ] books become transparent with it but these [ __ ] aren’t becoming transparent with it they’re just saying we PR like we promise we swear like you could take it from me I’m not mopping up diamonds anymore when they’ve been mopping up diamonds when
They have in the past they have a record of it foreign continuing the challenge to advocacy group and that’s not just diamonds I got nothing against the beers right but it and it’s not just diamonds that’s all I’m saying the challenge to advocacy groups is to stop the trade in Conflict
Diamonds but not jeopardize the Employments of thousands of Africans in the legitimate Diamond trade you see there you go there is a legitimate Diamond trade and they don’t want to jeopardize it for the jobs that they have created through these diamonds through the actual legit minds and the businesses the communities surrounding
The mines I get it it’s understandable rather than call for a boycott non-governmental organizations demand a transparent diamond supply chain that can give consumers confidence that their purchases are not subsidizing war that’s a good step that’s a good first step right they also want consumers to make clear
To the diamond producing companies that blood diamonds is an issue that end buyers take seriously the industry solution the so-called Kimberly process was endorsed by governments of almost 40 countries in it every producing Nation monitors and certifies that diamonds are from approved Minds countries that buy diamonds have a similar system to ensure
That only certified products are imported conflict diamonds are banned I mean I’m not going to dig into I’m not going to dig into where the Kimberly process starts and stops you make your own inferences as to whether or not conflict diamonds can receive stamps of approval
Um and and how how and why so you come to your own inferences I’m not here to convince you of anything all right continuing considering the Kimberly process depends on transparency damn it depends on transparency non-governmental organizations want independent inspectors to Audits and verify systems put in place rather than
Simply relying on the companies involved they fear the Temptation for individuals or corporations to act as a backdoor conduit for the conflict diamonds will be too strong to resist the industry is currently scrambling to prove the system effective you see the system is already in place right and now it’s scrambling
To prove its efficacy to prove that it is effective to prove that it’s keeping conflict diamonds out scrambling it’s [ __ ] scrambling you make your own inferences consumers are I’m continuing consumers across the world are increasingly punishing and rewarding companies because of their perceived Corporate social performance according to environics International the proportion
Of Americans that reported having punished a company for being socially irresponsible equaled 58 in 2002 an increase of 15 points from 2001. furthermore strong majorities in most countries believe that their actions as consumers can influence corporate Behavior 78 of Americans believe that as consumers can make a difference
That that they Sorry 78 of Americans believe that they as consumers can make a difference in how responsibly a company behaves among U.S consumers with access to the internet 17 say they have recently searched for information on Corporate social behavior online young adults 18 to 24 with internet access are more
Likely to have looked for such information online with over one in four reporting doing so a recent study by the london-based new economics Foundation nef in partnership with the Cooperative Bank found that the value of ethical consumer purchases for fuel housing personal Goods transports and subscriptions is small but growing rapidly by 18.2
Percent between 1999 and 2000 that is from 4.8 billion pounds to 5.7 billion pounds ethical purchasing is now growing at six times the rate of the overall Market reaching a market share of 1.6 percent total ethical purchasing with Banking and Investments amounts to 13.4 billion
Dollars in 2000 a growth of 19 from the previous year 1999. the next subheading values in Lumber question mark in this new environment seeing seemingly straightforward businesses become sudden lightning rods for political activism Home Depot became a retail giant by selling hammers nails and lumber at deep discount prices then
Wham the rainforest Action Network appeared the network wants to reduce the chopping of rainforest trees in the North American Market rather than appeal to governments the network organizes customer product boycotts as the largest retail of old growth Lumber it sells more than 5 billion dollars of lumber
Plywood doors and windows each year Home Depot was a prime target the rainforest Action Network has 30 000 members and 150 Grassroots groups in more than 60 countries it uses the internet for public education and to forge alliances Within indigenous groups human rights and environmental organizations small businesses and local politicians when
Locked in battle with Home Depot the action Network’s websites provide provided statistics about rainforest depletion documentation about Home Depot’s companies activities lists of actions and protests across North America and information about other organizations working on the campaign quote our highly effective activist network has used a variety of tactics
Such as hanging banners blockades of buildings and meetings streets theater protests and stopping logging trucks and ships these actions not only call attention to the plight of the world’s forests but also help to stop the machine of Destruction in its tracks end quote the network even posted talking points to
Activists for media interviews after two years of being hammered with bad PR and increasing resistance to new store locations Home Depot surrendered the company announced in 1999 it would phase out old growth lumber from its product Lines by the end of 2002. on January 2 2003 the rainforest Action
Network issued a press release Home Depot assessing Home Depot’s efforts sorry on January 2 2003 the rainforest Action Network issued a press release assessing Home Depot’s efforts the progress this is a quote the progress Home Depot has made removing products from endangered forests from its shelves is impressive the company has succeeded in
Establishing meaningful chain of custody to track the origin of nearly all its Wood Products Home Depot’s sale of wood products that are environmentally certified by the forest Stewardship Council has dramatically increased Home Depot however has yet to take the final and most important step in its commitment to use its power as the
Market’s leader to drive change within the forest products industry Home Depot continues to do business with the worst actors in The logging industry end quote for its part for its part Home Depot says its customers appreciated the progress it has made to responsible forestry quote when someone purchases a piece of wood
From the Home Depot we would like them to think of that as them placing an order for another tree to be planted somewhere in the world said Ron Jarvis Home Depot’s vice president of merchandising that’s that’s a nice thought that’s that’s nice sentiment the company insists it has fulfilled the
Promises it made in 1999 quote in our mind and the minds of most people we talk to we’ve gone a lot further than most people thought we would Jarvis said a spokesperson a spokesperson for the Action Network said it was possible the group would resume its protests
It’s never enough it’s never good enough right but I get it it is it is understandable that they’re going after uh the logging of old growth forests I mean that is important that’s vital what about the pollution right what about pollution of other larger companies other larger corporations Other Nation States what
About their pollution foreign continuing all of these companies are on a sort of are on a sort of what what are on a sort of a new or what this is a [ __ ] up quote hold up all of these companies are on a sort of a new road so to speak
It’s just on our on a sort of New Road right right all of these companies are on a sort of a new road so to speak to providing wood products that give consumers the confidence that the word they buy is coming from well-managed forests said Ron dauer President of the U.S branch of
The forest Stewardship Council Well Ron dower that quote was [ __ ] up certification by the forest and worship Council involves guidelines on environmental standards biological diversity and cutting in a manner designed to ensure that a forest continues to thrive they are ahead of the pack in terms of moving along that
Road that were said of the Home Depot Is there further to go I suppose there is always further to go end quote nice very nice let’s turn the page here next little subheading product co-creation so co-creating a product with somebody else where I guess it’s you’re collaborating on creating nice
Product co-creation in the transparent World customers can find out inform others and even self-organize whether it’s teenagers sharing mp3 music Buyers Clubs aggregating purchasing power Geeks developing Linux software uh more more on Linux go listen to uh episode what is that for I think it’s episode four
Yeah go listen to episode four or was it five let me give you a quick heads up here was it five or was it four it was five season seven episode five go listen to it if you’re interested it’s very interesting uh Geeks developing Linux software or
Lonely singles creating a club to meet each other instead of going to the classified ads customers can organize themselves more easily than ever before this poses disaster or Boon depending on whether firms see transparency as a threat or opportunity self-organizing systems have enormous implications for businesses smart
Managers are asking quote is there a chance our customers could work together via the Internet to build a product that competes with us how do we prevent this and harness the energies and ideas of our customers to co-create our product or service this phenomenon has racked the music
Industry as much as any other rather than purchase CDs from stores consumers construct their own music playlists of digital music downloaded from the net cooperation among consumers is shared by by sharing hold on cooperation among consumers by sharing their digital music files with others via the Internet creates an alternative to the industry
The recording industry is a textbook example of how leaders of the old Paradigm are often the last to embrace the new yes because the side commentary pride comes before the fall your [ __ ] huge one moment and the next moment the frame of reference changes completely where
You’re big in one area means that you are lacking in the other and you never want to get caught lacking you always want to have and keep that [ __ ] thing on you all right the recording industry open Enterprises rather than viewing customer self-organization as a threat should treat it as an opportunity to
Involve customers deeply in their operations in doing so firms harness The Genius of customers for Value creation as well as create Superior customer experiences and strong enduring customer relationships to date examples of this are few and far between as mentioned earlier the toy company Lego chose the transparency
Route bringing its customers into its design process best known for making little interlocking plastic Bricks Lego now makes high-tech toys for children and adults alike one of its new product lines Mindstorms combines hundreds of Lego bricks with gears lights Motors and touch sensors and a microprocessor called the rcx that allows users to
Build their own robots Lego and the MIT media lab wrote the original software for the rcx but soon after the software released a Stanford student reversed engineered it and posted it on the internet since the rcx software was proprietary Lego faced a decision it could behave like the recording industry and take
Legal action against the Stanford students for attacking its intellectual property or it could sit back smile and see what happened after initially leaning in the wrong direction Lego chose to do the latter the company has had reason to congratulate itself ever since after the Stanford student posted the rcx code
Online an Illinois man posted software designs and a German student did the same then others began to download the software and Tinker with it soon amateur programmers were using Mindstorms to make devices ranging from photocopiers and slot machines to a dog named gurr that’s a remarkable creature ger can
Distinguish colors and respond to voice commands imagine that today Lego uses mindstorms.lego.com to encourage tinkering with the rcx software so essentially essentially it made its open source or they’ve they’ve allowed it to remain open source the website offers a free downloadable software development kit Legos customers in turn use the site to post
Descriptions of their Mindstorms creations and the software code programming instructions and Lego parts that that the devices require Lego might as well have made its customers part of its design Department that’s nice right when you don’t have to pay a design team when you when you can
Actually curb the cost of a design department and just Outsource it to the people who are going to be using it to the people who want it that’s neat I like that continuing the company benefits hugely from the work of this volunteer business web each time a customer develops and
Posts a new application for Mindstorms the toy becomes more valuable a direct upshot from this customer involvement is a greatly expanded consumer market for Lego originally a child’s toy Lego Mindstorms now has broad appeal particularly for University students and professional and business professionals says Soren Lund a director at Lego in
Denmark quote it has kept the product vibrant and Alive even today end quote that’s my accent four years after it was released quote I still get amazed even when I I still get amazed when I see what’s going on out there yeah you should because creation and Innovation creativity is unceasing
Uh continuing considering soon more sophisticated collaboration and Knowledge Management tools will be available and far more complicated projects will be possible it’s easy to imagine any digitized content being developed this way for example a textbook the model could be transferred to many other sectors volunteer Engineers could
Cooperate on the net to provide design inputs into a new generation automobile a car company such as GM could harness the creativity of its own customers to co-design a car it could build an online collaboration Arena that presents 3D visual prototypes participants could include style conscious customers Fleet buyers knowledge knowledgeable service
Technicians supply chain Partners dealers car Buffs and Industrial Engineers industrial designers I’m sorry I [ __ ] that one up industrial designers these participants would be motivated to provide their advice freely because they love cars enjoy interacting with other members of the online community and gain pleasure from influencing the design of
A future car when GM adopted an idea it could publicize the news to the community enhancing the contributor’s reputation the manufacturer could return the favor by providing buyer rebates based on the quality and design of contributions that is a swell idea and the fact that it came up in 2002 and hasn’t been
Implemented in 2023 lets me know or at least I haven’t heard about it lets me know that some companies are out there [ __ ] up the bag for the I don’t know for the sake of greed for the sake of ignorance because they’re [ __ ] [ __ ] when it comes to capitalism and
They say capitalism is bad no it’s just players some players don’t know how to play until they get played and have to learn the rules the hard way the next little subheading here then corporate integrity and the brand investor Warren Buffett says if you lose dollars for the firm by bad decisions I
Will be very understanding if you lose reputation for the firm I will be ruthless that’s a really good quote actually you could lose dollars by making bad decisions it’s almost logical right but if you [ __ ] around because you could lose dollars and not lose reputation right but if if you lose
Reputation it doesn’t matter how many dollars you make it’s it’s [ __ ] you you’re dead I mean dead professionally right that’s career suicide professional suicide for a growing class of products and companies Integrity honesty reliability consideration and transparency are the foundation of brand architecture most brands have included some but not all of
These values in the past coke presents itself as reliable delivering the same taste worldwide it communicates consideration quality control flavor convenience safety philanthropic benevolence even the promise of Lifestyle improvements quote things go better with Coke but values like honesty and transparency were never really necessary for Coke’s
Branding in fact the brand has always boasted of opacity at least in the formulation of its Secret ingredients in that case appropriate yeah I get that I mean we’re we’re dealing with opacity when it comes to like Trade Secrets all right that’s understandable internationally in recent years Coke has
Faced the murder the murders of Union organizers and the clear use of Terror against workers in its bottling plants in Colombia Coke insists that it supports human rights and that bottlers are independent of the Coca-Cola Company reports of these crimes led the international labor rights fund and the
United steelworkers of America to launch a historic lawsuit in Miami on behalf of the Colombian Union against Coca-Cola and its Colombian bottler opponents of Coke’s strategy of indifference with respect to its suppliers say that’s quote Global corporations such as the Coca-Cola Company have a responsibility to ensure
That the rights and safety of all workers who produce package slash bottle or distribute their products are protected just as they have a responsibility to ensure that the products they sell are safe Coca-Cola has a responsibility to ensure that the conditions under which their products are produced are safe and a quote
Critics allege that the real thing is Coke’s unfair labor practices that’s in quotes and quotes the real thing because Coke I guess had a had like a trademarked um what is it a trademarked what’s the term called a motto is it a motto that’s the trademark really quote the real
Thing the real coke it’s not the real coke the real coke has cocaine continuing continuing adding honesty and transparency to the formula creates a higher hurdle and more complex brand architecture today Coke must Endeavor to behave and present itself as a leader in corporate citizenship and a company with
Great integrity it has launched programs on the environment that’s water and natural resources climate change Environmental Education and waste management it has invested considerably in fighting AIDS through employee programs and bottling Partners over the past few years it has invested tens of millions of dollars in educational programs in the many
Communities in which it operates it has however had little success convincing critics that it has taken steps the adequate steps to improve labor practices in its bottling plants or even to accept responsibility for this challenge Coke lives in a house of glass and consumers especially in certain important markets that’s the youth in
Developing countries can be expected to shift loyalties as Coke’s brand architecture is undermined some companies bake accountability into their brands to gain consumer support even from the most surprising places in 2001 Animal Rights group people for the ethical treatments of animals that’s Peta organized nearly a thousand demonstrations at Burger King
Restaurants throughout North America criticizing the fast food Giants for its suppliers cruel treatment of animals a year later peta’s website glitzly glitzally glitzally what is that a year later peta’s website Glitz maybe it’s the glitz and glamor I don’t know glitzally urged supporters to put down their
Protest signs and Chow Down at Burger King what why it says in June 2001 following peta’s six-month campaign the fast food giant had agreed to hold suppliers accountable for upgraded standards of animal welfare and Burger King also became the first fast food restaurant to add a veggie burger that’s already available
It was already available in Europe and Canada to oh wait not already available because this I mean yeah this book was written in 2002. so it’s saying here in quotes after June 2001 by then the burger was already available in Europe and Canada to all of its U.S sites so
They included a veggie burger in all of its U.S menus Burger King is becoming an open Enterprise a company that serves meat to Millions but is also accountable to animal lovers Royal Dutch Shell faced what we call a trust crisis that damaged its brand when it tried to sink and obsolete’s North
Shore drilling rig called the Brent Spar in deep ocean waters they tried to sink to straight up sink it was it [ __ ] sunk cost just a lost asset they were just trying to trying to write off some [ __ ] expenses public pressure forced shell to reverse its decision and pay to have the rig
Dismantled on Shore I mean yeah I mean what what logic what’s the logic in that and and just sinking and just sinking the facilities instead of paying to have them dismantled and and recycled you could easily recycle it have another rig constructed from it write all of that
Off as an expense [ __ ] retards shell brand has always stood for reliability that’s good quality consistent fuel products and consideration that’s convenient locations competitive prices today shell places integrity at the center of its brand shell is now asking consumers to trust it’s not only to provide good gas
But also to Steward the environments and be socially responsible it positions itself as an honest transparent corporate citizens some critics allege that this is a pure that this is pure window dressing and that Shell’s commitments to advertising how well it behaves is greater than its commitments
To behaving well I I might agree I might agree with that because when you have to advertise when you have to advertise and promote all the good that you do instead of garnering that reputation organically right when you have to promote and put it in people’s faces like like social
Media today when folks go out on the street and start giving away start handing money or bags of food or clothes you know necessities and Staples to uh to the homeless to the Indigent to no sorry to the Indigent to the Indigent to the unhoused quote-unquote and they’re
Videoing it all up in the person’s face and pretty much asking them for a statement asking them like hey tell the camera how [ __ ] shitty your life is and why we’re making it better when they do that when they’re trying to advertise and promote their Good Deeds to me at
Least it comes off as fake so some critics allege that this is pure window dressing and that Shell’s commitments to advertising how well it behaves is greater than its commitments to behaving well but there is no comparison between the genuine shift in thinking and behavior at Shell and the
Thinking at other companies such as Exxon that have just begun to make the turn clerica life insurance boasts it is quote one of the fastest growing life insurance companies in the United States quote or end quote from humble roots as the Midwest Mutual Life Insurance company
Founded in Fargo North Dakota in 1930 it grew slowly until relatively recently when it seems to have found the keys to success today the company is licensed in 48 states and the District of Columbia it has more than six thousand agents and serves over 225 000 policyholders in May 2000 clerica
Was sold to Sun Life Financial for 6.8 billion dollars of that the clerica brand was valued at 700 million dollars How could a brand have such a huge relative value according to former clerica strategist Hubert santong santong yeah I guess saint-tong the brand was based in values deeply held by
Every clerica employee the brand defined the clerica corporate character how employees worked with one another and ultimately how they interacted with the external world and built relationships with customers says santong if you want an authentic brand in financial services the person that provides the service is the service how
You align that person to the values of the corporation is critical the next subheading here branding customer candor openness is Central to the Progressive Corporation brand and to its success in the marketplace it’s CEO Glenn Renwick explains that the information asymmetries in the auto insurance industry have been an impediment to trust
Quote the auto insurance field hasn’t always been understood by consumers end quote Oh no not end quote sorry the quote continues you hold all the cards companies say here’s my price and here are the contract terms but customers are in the dark as to the rationale for
Prices and even what other companies are charging Progressive has built a brand based on openness giving all the information a customer needs to make a decision another quote if you give consumers only one data point then you’re only as good as that one data point if you give them
Progressives rates and put it in a context of what other firms are charging you create something new first is a shopping methodology that didn’t really exist in auto insurance where say like buying a DVD customers can Window Shop second you build the relationship you may lose that transaction but Candor
Opens the door to a relationship end quote credit rating is another tricky issue in auto insurance quote people are uneasy about it because they seem to be asking them because we seem sorry because we seem to be asking them how much money they have says Renwick so Progressive
Decided to be open explaining to prospects exactly how their credit rating score affects price and how by correcting errors or improving their credit rating they can lower the cost of insurance customers are very appreciative says Renwick quote transparency has become part of our brand end quote telephone companies have a reputation
For opacity telephone bills are obscure the company’s bureaucracies are impenetrable when you have a problem it is therefore shocking to see British Telecom BT as a world leader in the transparency Revolution the past 20 years have been exciting times for BT in 1984 the company was formed from a Government monopoly to a
Private sector was transformed sorry was transformed from a Government monopoly to a private sector Corporation despite the enormous shock to the corporate culture BT pulled off the transition with finesse for its first for its first 15 years in the private sector life was good dividends per share consistently Rose peaking in fiscal year
1999-2000 then as with many other telecommunications companies in the world profits plunged after a disastrous investment in third generation mobile phone licenses in a bid to restore profits and investor competence BT management announced a host of initiatives built around A Renewed top priority customer satisfaction that’s a wild last name Ben
They’re very very Maybe Ben ver Valiant I guess because it’s a w v e r w a a y e n I want to pronounce the W as a v because that to me seems like the right thing to do especially if it’s from I don’t know
North Europe is that North Europe close to east Europe around those parts maybe Nordic I don’t know Ben Vervain the CEO of BT pledged quotes to outperform competitors consistently and reduce the number of dissatisfied customers by 25 each year end quote reducing dissatisfied customers by 25 each year is an enormous undertaking
Company research shows that customers expect continuous Improvement in customer care and quality of service in other words with escalating expectations BT must continually improve its product simply to maintain levels of satisfaction to increase them is something else again BT calls its plan quote customer candor step one is to deliver a superior
Product BT’s market research makes clear that Superior service does not require the cheapest price customers want to know they are being dealt with honestly and considerately yeah that makes sense I think a customer for the most part is a side comment you’re a customer for the for the most
Part knows that they get what they pay for right and on both sides on both ends of the extreme folks either want the best and are willing to pay more or I mean I guess if it’s uh like if they’re hype beasts about it they’re willing to just shell
Out a lot of money for [ __ ] service even just to be part of an exclusive ooh Uber exclusive group right on the opposite end there are people who will pay who want to pay little to nothing and and will compromise on service they will accept [ __ ] service because that might
Be all they want to pay or that might be all they can pay maybe that’s all they can afford but for the most part if we’re talking about I suppose a bell curve right most people in the middle understand the concept of getting what you pay for continuing here the company strives to
Keep customers informed when problems occur it gives customers a clear commitment when a job starts and updates them until the job is completed satisfactorily satisfactorily satisfactorily customers can track repair work Via SMS messaging on their cellular phones if service is interrupted for an extended period and the customer doesn’t have a
Cellular phone as backup the cus the company provides one the company pledges to do business in a way that has three points here in a way that first maximizes the benefits of information and Communications technology for individuals second contributes to the communities in which it operates and third minimizes any adverse impact that
It might have on the environment the company sets out a statement of business practice the way we work which is which it makes widely available it defines the business principles that apply worldwide to all the employees agents contractors and others when representing BT the statement also sets out specific aspirations and commitments
That apply in the company’s relations with customers employees shareholders partners and suppliers and in the communities in which it operates in the area of the environment for example the company has scores of programs that demonstrate its commitment to ecosensitivity including details such as prohibiting advertising on pay phones
That are located in areas of outstanding natural beauty national parks open Countryside or world heritage sites with respect to supplier relationships the company pledges to ensure that all dealings with suppliers from selection and consultation to recognition and payment are conducted in accordance with the principles of fair and ethical Trading
The company supply chain initiative quote sourcing with human dignity relies on standards based on the UN Universal Declaration of Human Rights and international labor organization conventions quote we intend to gain the support of our direct suppliers to promote these standards throughout our supply base end quote Recent research shows that UK residents
Have a large and growing belief that companies should behave in a socially responsible manner the research also shows that the customer’s most interested in socially responsible behavior tend to be the most affluent these customers are demanding and most likely to leave the company if dissatisfied BT’s conclusion is that Corporate social responsibility CSR
Contributes solidly to the bottom line the next subheading here the new risk of global brands in a world of diverse local values evidence is mounting that Global Brands may not always Thrive for the first time there is considerable hand-wringing among Marketing Executives about global branding anti-corporate activists Naomi Klein
Argued in her best seller no logo that corporations like Nike shell Walmart and McDonald’s have become metaphors for a global economic system gone awry for adherence to her view these brands have become mistrust marks and targets for attack she predicts that outrage against these Brands will change the way
The companies present themselves some brand experts are working to determine whether the global qualities of their brand are positive or negative others are trying to measure the impact of corporate values on a global brand according to research international Observer that’s Rio today’s Global consumers will adhere to their favorite
Brands and turned a blind eye to the company’s political and ethical malpractices most consumers in the 40 countries they studied love U.S Brands even though they may dislike U.S policies imagine that maybe made in the U.S has you know has something behind it oh no this [ __ ] was
Made this [ __ ] was published in 2002 in 2023 it’s slightly a different story I mean the quality is there sometimes the quality is not but even this study argues against homogeneous or homogeneous homogeneous Global brands or a quote one size fits-all approach says Rio Global director Malcolm Baker quotes brands are
Becoming driven by a need for reconnection to local with local roots and a form of in-your-face authenticity that seeks to deny marketing Construction consumers want to find the brand and not the other way around yeah I get that that’s understandable I feel like uh that this is also the
Reason why a lot of firms a lot of corporations are you know formal organizations will we will go out of their way we’ll go out of their way to um establish subsidiaries of establish uh uh child companies not child what what’s the term I’m looking for yeah I guess
It’s a subsidiary and then this is the subsidiary has a parent company right but you don’t call them child companies Offspring Offspring companies just offshoot projects I guess offshoot Ventures with a different name with a different name even in instances where I guess populations don’t have the best sentiment toward us brands
U.S Brands will go out of their way to uh form new corporations in these foreign lands with the appropriate name the appropriate identity the appropriate uh marketing marketing scheme for the sake of the dollar chasing the almighty dollar continuing yet a low profile is not always the best policy Monsanto bruised
And battered after its disastrous attempt to introduce genetically modified foods to Europe is a telling example in the United States the company had happy customers and a strong brand but when it attempted to extend this to Europe it landed in a firestorm of protest the Europeans had huge sensitivities to genetically modified
Foods not shared by Americans Monsanto had an active stakeholder web and didn’t know it so Monsanto was fumbling the bag and it didn’t even know ahead of the [ __ ] bag that’s funny in explaining why the company was so out of touch with European public sentiment its former president and CEO Hendrick a
Verified verified these last names v-e-r-f-a-i-l-l-i-e Vera the CEO person said quote we don’t understand that we didn’t we didn’t understand that when it comes to a serious public concern that the more you stand to make a profit in the marketplace the less credibility you have in the marketplace of ideas when we
Tried to explain the benefits the science and the safety we did not understand that our tone our very approach was seen as arrogant we were still in the trust me mode when the expectation was show me end quote Monsanto epitomized the wrong attitude to the brand for any company in
An increasingly transparent Society Monsanto management felt that as a researcher leader that is a research leader Monsanto I’m [ __ ] that sentence up Monsanto management felt that as a research leader the company was in the best position to judge whether its products were safe knowing the subject to be controversial
The company decided to keep a low profile and attract as little scrutiny as possible fueling this point of view is the subject’s aching complexity there are no simple answers to the question surrounding genetically modified organisms indeed it’s even hard to find arguments on the questions to ask nevertheless the company should have
Recognized the enormous contribution it could make to the debate and participated fully Monsanto is not the only company to suffer enormous losses and damage to its brand due to underestimating the public appetites for good values and responsible behavior unlike BP and shell Exxon Mobil until recently chose to ignore growing public
Concern about the oil industry and the environment supporters praised its singular focus on shareholder value arguing that it shows how so-called responsible behavior of its competitors does not contribute to and possibly undermines shareholder value yet apoll conducted by m-o-r-i social research for Greenpeace in November 2002 revealed that one million UK motorists
Say they’re boycotting Exxon because of its stance on global warming what about climate change what about flip-flopping back to global cooling y’all remember that one anyways another report released in May 2002 asserted that Exxon mobil’s attitude toward climate change is fraught oh now it’s climate change is fraught with unnecessary risks and missed
Opportunities that could threaten more than 100 billion dollars in long-term shareholder value the report entitled risking shareholder value question mark Exxon Mobil and climate change an investigation of unnecessary risks and missed opportunities was commissioned this report was commissioned by shareholder activist Robert monks the Coalition for environmentally responsible economies that c-e-r-e-s and
Campaign Exxon Mobil the report concludes while quote while ExxonMobil continues to gain respect in many quarters of it for its financials I [ __ ] that one up hold on quote while Exxon Mobil continues to gain respect in many quarters for its financials it also has marched into a potential Minefield
Of reputational risk future shareholder losses exposure to litigation and policy costs on the issue of climate change we find real and increasingly serious risks to shareholders having to shirt wait wait wait wait whoa whoa uh we find real um but I [ __ ] that up no we find real and increasingly serious risks to
Shareholders have arisen oh okay yeah so we find re we find real we find real and increasingly serious risks to shareholders have Arisen from the way Exxon Mobil has stood out from the crowd and let itself become the obvious Chief climate change Middleton in quotes the climate change villain I
Don’t know if it was the way that sense was written or the way my brain was working but something felt off about that sense continuing commenting on the report’s findings monks said quote this report suggests that ExxonMobil has little to fear and much to gain from a significantly more
Constructive approach to climate change this is a respectful request to ExxonMobil you say you are right about climate change and yet the way in which you speak seems to create needless confrontation you say that you have contingency plans in the events that you are proven wrong in five or ten years
And yet you do not share them with the world we know of the efforts by comparable companies to reduce carbon emissions from you we have not only silence but also rejection you declined to engage in dialogue with other interested constituencies that is to say all the rest of us this study is an
Effort to begin that dialogue X end quote Exxon may be starting to shift its view but the evidence is scanty in November 2002 it contributed 100 million dollars toward a 10-year 225 million dollar program at Stanford University for Research into technologies that would help reduce greenhouse gas emissions General
Electric will contribute 50 million dollars Exxon Mobil explained its contribution by saying new technologies for producing energy while reducing emissions of heat trapping green gases were quote vital to meeting energy needs in the industrialized and developing world end quote so far many global companies that have suffered a values crisis that
Damage their brands for having trouble fighting are having trouble finding back so far let me reread that so far many global companies that have suffered a values crisis that damage their brands are having trouble fighting back McDonald’s has stuck its toe into the globalization debate to defend itself in
April 2002 the company published its first corporate social responsibility status report using some guidelines from the global reporting initiative the initiative brings together a group of companies governments non-governmental organizations unions accountants and academics to develop standardized measurements of corporate social environmental and financial performance pulling together its reports was a
Complex and costly exercise that took almost two years but McDonald’s says it was worth it since its hopes the reports will temper its critics however so far it has mainly drawn fire welcome to the corporate Warframe Paul Hawkin author of The Ecology of Commerce and natural capitalism and founder of the
Sausalito based natural Capital Institute Unleashed a withering critique of the McDonald’s reports calling it the quote low water mark for the concept of sustainability and the promise of corporate social responsibility it is a melange of homilies generalities and soft assurances that do not provide hard metrics of the company its activities or
Its impacts on society and the environments Hawking Cuts McDonald’s no slack an honest report would detail the externalities borne by other people places and generations the draining of aquifers the contaminated waterways the strip mined soils the dangerous abattoirs where migrant workers are employed the inhumane injury-prone dead-end jobs preparing chicken
Carcasses for chicken nuggets the global Greenhouse methane gas emitted by the millions of hamburger cows in feedlots you know they’re still on this methane [ __ ] okay Hawking Hawking posted on the web a list of 47 issues that McDonald’s sidestepped in its corporate self-portraits example quote one-fourth of the cow slaughtered
Are worn out to dairy cattle animals most likely to be riddled with diseases Cancers and antibiotic residues McDonald’s relies heavily on old dairy cows because they are lower in fat cheaper and allow them to say that all their meat is raised in the U.S what the [ __ ] kind of benefit is that
That because these cows are riddled with diseases and Cancers and antibiotic residues that they’re better at that I don’t understand that foreign anyways continuing Hawkins Hawkins posted on the web a list of 47 issues that McDonald’s sidestep in its corporate Portrait uh we already read that despite mcdonald’s’s I’m continuing
Now further down despite mcdonald’s’s best efforts and no matter how many reports its issues Hawkins list of 47 issues won’t go away it sits there like a PR nightmare waiting to churn the stomach of its next visitor Hawking represents a point of view shared by many critics to silence them McDonald’s
Will have to revamp its business model or show why its overall contribution to society is positive ignoring the issue accomplishes nothing in the transparent World corporations need a new ethos the truth will out the truth will out what the truth will out even if the truth is
Never as Extreme as the critics allege you know I’m whatever that sentence the truth will out what the truth will out even if the truth is never as Extreme as the critics allege I don’t understand that sense McDonald’s can’t brush a side criticism of the fast food industry by
Busily noting how many pounds of cardboard each franchise recycles every week in the eyes of extreme critics serving quote billions and billions of burgers is an egregious abuse of natural resources and the company has to engage in that debate the value of the internet is not to construct warring websites each lobbying
Assertions at the others it is a tool for dialogue if McDonald’s believes its use of resources and business practices are defensible it should not shy away from the serious issues that accompany the fast food industry the next subheading here the dark side privacy transparency has a dark side not only
Are corporations becoming increasingly transparent to customers customers are becoming increasingly transparent to corporations as the net becomes the basis for Commerce work entertainment Healthcare learning and much human discourse each of us is leaving a trail of digital crumbs as we spend a growing portion of our day touching Networks
The books music and stocks you buy online groceries scan at the supermarkets or bought online your child’s research for a school project the card reader at the parking lot your car’s conversations with a database via satellites the online Publications you read the shirt you purchase and in a
Department store with your store card the prescription drugs you buy and the hundreds of other network transactions in a typical day point to the problem computers can inexpensively link and cross-reference such databases to slice Dice and recompile information about individuals in hundreds of different ways in the past are we only worried about
Big Brother governments assembling detailed dossiers about us but now the threat also stems from Individual corporations and their data little brother [Laughter] little brother compared to big brother that’s that’s funny I like that that’s funny go back and listen to uh what was it season seven episode I think it’s episode one like
The very intro of this book you’ll recognize the interconnectedness of these networks where corporate and governments they’re not one in the same they scratch each other’s back and they do it out of is it self-interest self-preservation so they’ve got resource they each have resources that they need from one another
I’ve seen it happen I’ve seen it work I’ve seen the cooperation I’ve seen the backstabbery I’ve seen the [ __ ] the Cloak and Dagger the skull buggery I mean it’s fun to an extent and there’s money to be made in there and then you know there’s the Dark Side [ __ ] the dark side
Intense comp I’m continuing intense competition is making marketing departments look for any Edge they can get companies can’t afford to squander marketing dollars on people who have no intention of ever buying their product that means companies want to know more and more about what makes each of us tick our motivations Behavior attitudes
And buying habits the good news is that companies can give us highly customized Services based on this intimate knowledge and build trusting relationships the bad news is that these Pro is that as these profiles are compiled the net result is the potential for the destruction of everything we’ve come to know as privacy
To further complicate the issue each of us has a different often inconsistent sense of what constitutes privacy and permissible encroachments while some encroachments are invasions of privacy I mean like we’ll we’ll allow invasions to an extent but only if it benefits us somehow or or we don’t uh completely
Compromise our vulnerabilities for the sake of you know this this privacy that a corporation or some type of organization our doctor even wants to make use of because our vulnerabilities aren’t out there like the doctor is you know there to help there to practice medicine uh allegedly right there to make us be
Better to to facilitate Health Care to us and the hope is that their invasion of privacy is kept professional only right but well you know you know the game to further complicate the issue where did it go while some demand the right to remain anonymous others clamor for example to
Exchange every detail of their online behavior for free gift certificates or air miles of course that’s their choice private privacy is all about the freedom to choice to choose man I’ve really botched that last sentence up of course that’s their choice and privacy is all about the freedom to choose
In January 2003 the California Department of Motor Vehicles that’s DMV revoked All State Insurance companies electronic access to confidential driver’s license and vehicle registration information because the government said the company had failed to adhere to state laws and regulations concerning access to these records all states the eighth largest car
Manufacturer in California had and other companies other insurance companies have online access to DMV records to help investigate insurance claims and to set rates on the basis of a person’s driving record the department stated the reason it revoked Allstate’s online access to data was because the company engaged in
Continuous and system-wide violations of the security provisions governing the data a DMV audit at seven of all states California claims offices found that company employees routinely violated the confidentiality requirements of the company’s contract with the government in one case an All-State employee released a confidential home address
That enabled a road rage driver to send a written threat to another driver just a side note yo this [ __ ] happens every day this [ __ ] happens every day and if it’s not an All-State agent it’s an executive and if it’s not an executive it’s a [ __ ] hit team it’s a
Hit squad it’s a it’s a wet work uh it’s yeah it’s a wet work group this [ __ ] happens all the time there’s gangs inside of gangs there are alliances inside of uh inside of what’s the term I’m looking for there’s I mean corporate if if there’s anything I guess
If if there is a value to being in a corporate to being a corporate Cowboy it’s learning how to and when to leverage access to information right but then but then you got the flip side you got these other [ __ ] who are just [ __ ] up the bag we’re getting access revoke for everybody
While they themselves violate the regulations that govern the access to this data you have that [ __ ] happening inside of [ __ ] police departments you have that happening inside of insurance companies obviously institutions that have access to this private information to this intimate information they are always at risk of
Becoming corrupt and for the wrong reasons too like there are there’s good reasons to move corruptly there’s good reason to move within the Shadows and these companies don’t [ __ ] have it they don’t they have no [ __ ] reason these these organizations like the police I can’t tell you how many times never
Mind I’m not I’ll just shut my [ __ ] mouth but the threatened driver the driver who was threatened the threatened driver complained to the DMV which investigated while it could not identify the person who leaked the address the DMV did find 131 other violations of confidentiality rules including the staffs making up
Fake car claim numbers to get into friends or family members DMV records the violations were so egregious here without an ironclad agreement in our hands that it wouldn’t happen again we had to pull the plug DMV director Stephen Gourley told a local newspaper oh how atrocious how [ __ ] shameful [ __ ] [ __ ]
Continuing Allstate not only violated privacy rules but also resisted the DMV’s attempts to investigate and fix the problem there was such a LAX culture at all states that they didn’t even know it was regulated Gourley said sometimes they wouldn’t let us in to investigate and in other cases they threw us out
Allstate spokesperson Mike Trevino called the actions of an undisclosed number of all state claims employees a quote breach of internal policy that Allstate regrets let me reread that because I feel like I had a [ __ ] stroke All State spokesperson Mike Trevino called the actions by an undisclosed
Number of all state claims employees a breach of internal policy that all states quote regrets no I read that right it’s just that my brain was [ __ ] retarding he added that Allstate had taken quote decisive action to make sure such breaches don’t occur but couldn’t immediately say what those actions were
Makes you wonder almost always continuing almost always corporate breaches of customer privacy have a well-meaning intention but the All-State incident shows how companies can be breathtakingly Cavalier about privacy concerns companies need to understand the principles that must be respected in good corporate privacy policies there is consent people must
Agree to having information about them compiled limiting The Collection the collection of such information must be limited to what is needed there’s identifying purpose the purposes for which personal information is collected must be made clear there’s limiting use disclosure and retention unless authorized by the individual information
Must not be used for purposes other than those for which it was collected and the information must be kept on file only as long as necessary it would be a big mistake for companies to conclude that corporate transparency should be applied to individuals that customers should get used to being naked
Customers will want to be closed for the foreseeable future and firms need to respect their privacy if corporate transparency is critical for trust then so is individual privacy when it comes to customers privacy is good business well oh no that last sentence it it rings it
Smacks they say that [ __ ] smacks of um hypocrisy that concludes chapter six of the naked Corporation how the age of transparency will revolutionize business I was your host for this chapter Alex yours truly and I thank you for joining me stay tuned as we continue reading the naked Corporation how the age of
Transparency will revolutionize business thank you very much have yourself a fine day
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