1. Given strong profit growth, has there been any damage to Baidu.com’s reputation?

2. What would future reputational damage affect, and how could it be measured?

3. What steps could Baidu.com take to restore its reputation, and what challenges will it have to overcome?

4. Governments throughout the world have been slow to react publicly to serious problems such as SARS, mad cow disease, and now melamine contamination. Who benefits and who loses because of these delays?

5. In some cultures, a ‘culture of secrecy’ or manipulation of the news is tolerated more than others. How can this be remedied by other governments, corporations, investors, and members of the public?

6. Many other companies with long supply chains, including subcontractors in far-off lands, have found themselves in difficulty. For example, in 1995 Nike was accused of employing child labor in Pakistan and Cambodia through its subcontractors, and subsequently changed its policy and practices with respect to the minimum age of employees working in contract factories. However, it is very difficult to verify age when people do not have birth certificates or when they can be bought cheaply on the black-market. 

a. Under such conditions, what are a firm’s responsibilities with respect to checking that each stage in the supply chain is complying with company policy?

b. Are there organizations that can help companies set standards and confirm adherence to them? If so, what are the organizations’ mandates and website addresses?

c. Should Menu Foods be held responsible for the melamine found in its products?

d. Would your response be different if it was the lives of people that were at stake rather than the lives of animals?

e. How and why does Nike disclose its policies and practices with regard to supply chain responsibility, and what are the major factors covered?

On July 16, 2008, it was announced that several Chinese producers of baby milk powder had been adding melamine, a chemical usually used in countertops, to increase the “richness” of their milk powder and to increase the protein count. Shockingly, the melamine-tainted milk powder was responsible for the deaths of four infants and the sickening of more than 6,200 more.1 Milk manufacturers had been using melamine as a low-cost way of “enriching” their product in both taste and protein count.