Reputation Risk and Globalisation

Reputation Risk and Globalisation

Exploring the Idea of a Self-Regulating Corporation

Terry O’Callaghan

Recently, multinational corporations have begun to reinvent themselves as socially responsible actors. This is largely in response to activist pressure. These activists have perceptively understood the link between corporate success and corporate behaviour. Corporate self-regulation has emerged as an important mechanism to counter this activist pressure. The author argues that corporations have a capacity for self-regulation because their reputation is critical to their success. As such, reputation is beginning to discipline corporate behaviour. The book first explores the link between corporate reputation, corporate behaviour and self-regulation. The author then compares and contrasts various studies of multinational corporations that have sought to self-regulate.

Chapter 5: The rise and fall and rise of the Toyota Way

Terry O’Callaghan

Subjects: business and management, strategic management


Orsatto and Clegg (1999: 264) argue that the automotive industry is ‘the economic sector that is most emblematic of modern times and the polluting consequences of modernity’. Not only is it a major source of greenhouse gas emissions, it is also responsible for the release of other dangerous gases, referred to collectively as ‘volatile organic compounds’ (VOCs). Moreover, pollution from motor vehicles is linked to numerous health problems, particularly in the developing world. As Suzuki (1993: 138) argued some time ago: ‘[c]ar-generated air pollution degrades human health, causes premature death, and reduces crop yields’. Putting to one side the health issues, the number of fatal motor vehicle accidents is staggering. According to a 2004 World Health Organization (WHO) study, approximately 1.2 million people died in car accidents globally that year, with about 250 000 in China alone (WHO, 2004: 3). The same study estimated that this figure will increase by approximately 65 per cent by 2020 (WHO, 2004: 35). The latest report from the WHO (2013) has revised the number of fatalities annually up to almost 1.24 million victims. The report also notes that 90 per cent of road deaths in the future will occur in low and middle-income countries. The Organization of Motor Vehicle Manufacturers (OICA) published data points out that some 67 525 346 motor vehicles and 22 222 084 commercial vehicles were manufactured in 2014. Clearly, the footprint of motor vehicles on the world is enormous and, as developing countries such as Brazil, China and India experience accelerated economic growth, this number is sure to grow in the decades to come.

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