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 6: Interface Inc.: a model of a self-regulating corporation?

Terry O’Callaghan

Subjects: business and management, strategic management


Unlike Royal Dutch Shell and the Toyota Motor Corporation, Interface Inc. has never been the subject of a severe reputational crisis. The company has never had to endure ongoing media attacks, serious government sanctions, or vocal complaints from anti-corporate activists. In many respects, Interface is a model corporate citizen, a poster child for a new approach to business that Jackson (2004) defined earlier in the book. Interface is a relatively small company compared with the other two goliaths of industry. Interface’s revenues of US$960 million in 2013 and US$1004 million in 2014 are modest by comparison. The relatively small size of the company has, probably, allowed it more easily to become a self-regulating corporation. The lessons that Interface has learned about its manufacturing processes, about how to reduce waste and innovate, and how to develop a strategy to become carbon neutral by 2020, has set a new benchmark in leadership, vision and cultural change within corporations. The Interface Model (now called Mission Zero) is a ‘eureka’ moment in business conduct. The company offers a new way of thinking about the relationship between business and society; one that also takes seriously the environmental challenges that the earth faces. There are other examples of MNCs moving toward self-regulation. These include Unilever, Patagonia, Green Mountain Coffee Roasters, Stonyfield Farm, Timberland and Ecover, among others. Each of these companies is worthy of analysis as they progress toward self-regulation. However, there are a number of reasons why Interface is a compelling case study.

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