Anti-multinational corporation activists, distinctly leftist in nature, used a common statistics in the nineties. It was all about how the largest of the large had turnover higher than individual country budgets. The reason the activists didn't win over public opinion and the corporations grew was that they proved quality superior to other competitors. Those opinions might be about to change and if local businesses are listening, the opportunities are dreamlike.
Fear is a contagious state of mind and the disease is spreading fast as far as Samsung consumers are concerned. Close on the disaster of Note 7's exploding during charging resulting in a million device recall, comes exploding washers of washing machines. The Korean electronic and home appliance manufacturer now have a double whammy to deal with. The Note 7 is essentially banned on air flights, even though signage sat Samsung outlet are still hanging, somewhat forlornly. The financial impact will hurt but it is the reputational hit that is going to hurt deeper and longer. Product recalls for the Note 7 happened late, that too after an initial free-replacement drive. The washing machine saga has just turned the first few pages.
The reasons for worry is that consumer forums in advanced countries may come bearing down in litigious manner that will hit the pocket and ego of Samsung shareholders. Speed to market with new products has its drawback, especially if safety issues have not been given the attention required. The sale of the Note 7 in Bangladesh was designed to provide an alternative to the iPhones. How the recall issue will pan out here remains to be seen. In a bizarre way, the incident also exposes the soft and somewhat inconsequential corporate social responsibility issues that the company eschews.
The leftist activists may derive a fiendish delight at seeing giant carmaker Volkswagen cringing and scuttling to regroup after being slapped with a $12-billion fine by the US authorities for safety and emission issues. The charge is that they tampered with actual emission numbers to be within the acceptable limits. The latest is the Chief Executive Officer (CEO) will face investigations about sexing up the company figures for stock market purposes -- a misdemeanour with grave consequences. Once again, a hit to the bottom line mixed with the devastating concoction of reputation damage. Volkswagen too must now do some navel gazing, simply because German engineering has always been above reproach, the reputation built over years of consistency. Emission levels weigh strongly on a society concerned by the pollution levels.
Unfortunately, another German heavyweight, Deutsche Bank has bigger issues. They are now looking for $14 billion that US authorities have fined them for financial irregularities. This has left Chancellor Angela Merkel red-faced, if that were possible after the Brexit and migrant issue. She has so far stayed away from suggesting the government will cough up the money in order to keep the bank above water. Deutsche Bank doesn't have anything to recall, bar the memory of their heydays. Their new fight will be more about believability than bottom line. And that is profoundly more difficult.
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