how the best social enterprise companies handle a scandal

Corporate Responsibility Examples

At 602, we talk a great deal about corporate responsibility. We are proud to provide so many corporate responsibility examples for you to learn from, in our resource library. Usually, we present our corporate responsibility examples as something positive. We hold up the best examples and spotlight companies who are getting it right. Today we are going to take a slightly different tack. We would like to give you a non-example- a large, well-known company that faced a scandal and did not react the way customers expected. Then we will contrast the company’s non example with a more positive story of corporate responsibility. We hope the contrast will help you see what to do and what not to do when it comes to being a conscious business. Non-examples or failures can be just as instructional as success stories.

Volkswagen’s emission scandal took place in 2015. The EPA issued a statement that emissions systems on VW cars were set up only to function when they were being tested. This meant that the cars could pass emissions, but were still putting pollutants into the environment the rest of the time. Longtime customers felt betrayed, and took to the internet to say so. The CEO lost his job, and upper level management faced congressional committee hearings.

The Rest of the Story

The company’s deception was not the whole scandal. Just as damaging was the fact that the company never admitted to any wrongdoing. Instead, they issued a half hearted apology. Stock prices plummeted. The company still has not recovered. By deceiving its customer base, and then not holding itself accountable, Volkswagen permanently changed its public perception—and not in a good way. The company recently pleaded guilty to charges in U.S. court.

Odwalla Steps Up

Contrast Volkswagen’s saga with the scandal facing Odwalla organic juice drinks in 1996. A young girl died from drinking one of Odwalla’s E. coli infected drinks. This could have been the end of the company. Negative publicity ran rampant, and many people called for a boycott of Odwalla’s products. Things couldn’t have been much worse, but the company stepped up in a major way. Odwalla became completely transparent about its manufacturing process and took steps to change that process, preventing another tragedy and keeping the company solvent. Through it all, Odwalla welcomed criticism and did not attempt to sidestep accountability for what they did.

Volkswagen seemed to show no remorse for their faulty products. Odwalla took full responsibility for their failure to protect the public. Volkswagen did not mend its ways; Odwalla did, and now the company is in a much better place. We hope all companies can follow Odwalla’s corporate responsibility example and avoid the poor choices that Volkswagen made in handling its crisis.