DAMAGED IMAGE FOR DELL
Chapter
No Reason to Delay
Part
II
The American computer manufacturer Dell had to exchange more than four million notebook batteries during a massive product recall. Although the defective batteries were made by Sony energy devices, it was Dell’s image that suffered in the end. The value of a share in the world’s largest computer manufacturer has been reduced by nearly half in the last two years. To a significant extent, this was the result of Dell’s poor business communication. The company was criticised for not responding quickly enough to reports of combusting notebooks and for leaving clients that reported complaints sitting out in the cold. Such a ‘communication strategy’ does not sit well with customers who are highly communication-oriented. Dell sells its products these days only via the Internet. So it can be assumed that its customers are in contact with one another and can quickly share experiences and information. The ‘Financial Times Deutschland’ even described Dell’s operations as ‘ignorant’ (idiotic). Dell responded to the problems with the announcement that it would invest 100 million dollars in its marketing and that 2,000 jobs would be created in the customer support department. The damage to Dell’s image has been caused not only by patchy communication and a slow response to customer complaints. The remarkable thing in this entire story is that batteries from the same production series installed in the computers of Apple, HP and Sony did not experience any similar problems. Because of stiff price competition in this sector, manufacturers try to save money in the production process, but that can lead to a poorer quality product. Striking a balance between profit maximisation and maintaining the good name of the company presents producers with an ever-greater challenge. Stephan Steins
CSR
Economic centre of gravity
management-theory (academically driven)
creation of value in the long term (investor driven)
Ethical centre of gravity
consumer-behaviour (consumer driven)
critical tradition (ethics driven)
irrelevant. But with CSR thinking, companies can grab the chance to develop market mechanisms based on ethical considerations in addition to economic ones. Four Levels If CSR is to be recognised and embedded in the business world as an economic necessity, it is important for consumption to be the starting point. In view of the fact that consumption has always been the driving force behind economic thinking, participating in consumption is an essential condition for keeping the system afloat. CSR faces the challenge, from an ethical perspective, of building a bridge between the opposing mindsets of companies (with their focus on consumer behaviour) and NGOs (with their critical attitude as stakeholders). On the other hand, interest in the further development of a positive management theory and the interest shown by the capital markets in value-creating opportunities over the long term are the driving forces. Both of these phenomena form the economic kernel of the CSR discussion. The innovative potential of CSR comes from its dynamics, where the focus is always on the economic and ethical aspects. CSR initiatives have to take stock of all four levels and make evaluations while keeping the objective concerned in sight. This enables CSR’s internal claim to be acted on by delving into socially relevant problems. As stated, CSR is not focused on charitable initiatives as a partial solution, but on an integral thinking process within management, which is connected with a ‘new’ awareness.
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CSR in Practice This requires managers to handle the theme of CSR very cautiously. A serious approach to it also means, after all, that it concerns fundamental strategic considerations that, as such, pertain to the basic orientation and/or the business model and the identity of an organisation. For this reason, the organisation must be able to