Corporate Reputation Management

Corporate Reputation

  • Corporate Reputation is the sum of all views and beliefs of the stakeholders to the company.
    • Perception: by stakeholders
    • Reality: the truth of the company’s policies, values, way of working, systems, performance.
  • For CEO’s Corporate Reputation is the ‘risk of risks’
    • A continuous process
    • Intangible
    • Complex
    • A key asset
    • Won over time
    • Could be lost in minutes

Corporate Reputation: An Ongoing Process

  • Good corporate reputations are critical because of their potential for value creation, but also because their intangible character makes replication by competing firms considerably more difficult.
  • Building a Corporate Reputation:
    • Multiple things to consider
    • Different people involved
  • Maintaining a Corporate Reputation:
    • It takes approximately 20 years to build a strong reputation.
    • It can be ruined in just 5 minutes.
  • Defending a Corporate Reputation:
    • Must be prepared to defend at any moment.
    • Must be prepared to defend at any place.
    • Defense should be congruent with company values.
  • If a firm has a strong culture of honesty and transparency:
    • Stakeholders dealing with the firm will witness it and remember it.
    • 8686 percent of customers who have good experiences with businesses choose to buy from those firms again.
    • Over 7575 percent of happy clients will share their positive experience with others.
    • Integrity is a reputational advantage that others will weigh in subsequent dealings.
  • Every interaction customers have with your employees has the potential to shape what the public thinks of you.
  • Ensure all employees, from the mail clerk to the CEO, display the highest levels of integrity and responsibility.
  • Saying in your mission statement that you “truly value your clients” isn’t enough; actions must support the words.
  • It’s better to associate with people whose behavior is better than yours; you’ll naturally drift in that direction.
  • Consider the impact of online image.
  • Customer actions before buying a product or service:
    • 9595% of consumers read online reviews before they shop.
    • 5858% say they would pay more for the products of a brand with good reviews.
    • It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.
  • Google AI chatbot Bard sends shares plummeting after it gives wrong answer:
    • Shares of mother company Alphabet dropped instantly with 100100 billion.
    • Questions raised:
      • Will they be competitive?
      • What testing was done before launch?
    • Example given of Bard providing a wrong answer regarding the James Webb Space Telescope (JWST).
      • JWST was used to take the very first pictures of a planet outside the Earth’s solar system, or exoplanets

Building Blocks of Corporate Reputation

  • The products and services
  • The leadership team
  • Workplace environment
  • Financial performance
  • Emotional connection to the company
  • Social responsibility

Products and Services

  • Considerations include:
    • What are the products and services offered?
    • What is the quality of these offerings?
    • How strongly innovative are their products?
    • How is the quality guaranteed?
    • How is the production secured?
    • What are the sources of the raw materials?
    • What is the value for money they create?
    • What are the jobs that the products/services help customers get done?

Leadership Team

  • Considerations include:
    • Who are the leaders in the company?
    • How excellent are their leaders?
    • What is their reputation like?
    • Do they have a clear vision for the future?
    • Do the leaders recognize and take advantage of market opportunities?
  • One can't buy a good reputation, you must earn it.

Elon Musk's Reputation Problem

  • Musk represented over 8080% of all negative mentions, meaning out of every 100100 negative media stories out there about a CEO on any given topic.
  • Tesla only stands 9th among 14 auto companies and Twitter 20th out of 23 tech companies in 2022.
  • Tesla and Twitter, in particular, are each seeing their reputational trendlines dipping.
  • The board of Tesla considers him a serious risk.

Workplace Environment

  • Considerations include:
    • Is it a good organization to work for?
    • Does it look like they have good employees?
    • Does it appear they are managing their employees well?
  • Great Place To Work certification criteria:
    • A score of 7070% or higher on the Trust Index
    • A minimum response rate (on 60 questions)
    • A completed Culture Brief → Trust Index
  • Booking.com’s core principles:
    1. Think customer first: adding value for customers (guests, partners, or colleagues).
    2. Own it: deliver on promises, make informed decisions, and prioritize tasks.
    3. Learn forever: be resilient, reflect, and seek to learn from successes and failures.
    4. Succeed together: celebrate team success through connections, trust, and valuing diverse perspectives.
    5. Do the right thing: achieve the right results in the right way for each other, communities, and the world.

Financial Performance

  • Considerations include:
    • Do they have a strong financial record?
    • Do they have strong prospects for the future?
    • Do they have enough and strong prospects in the pipeline?
    • Are they low risk investments?
    • Do they typically outperform competitors?
  • You get a reputation for stability if you are stable for years.

Emotional Connection

  • Do you admire & respect the organization?
  • Do you have a good feeling about the company?
  • Do you trust the company you work for?

Social Responsibility

  • Does the company support good causes?
  • Does the company act environmentally friendly?
  • Does the company treat their people well?
    • Sustainability Goals
      • Social
      • Environmental

Green Washing

  • Creating the illusion of being ecologically friendly
  • Organizations that spend more resources advertising that they are green than the actual time spent making their products and organization green.
  • DuPont Conaco Double-Hulled Oil Tankers Seal Clapping Commercial (1991):
    • DuPont announced that its energy unit, Conoco, would pioneer the use of new double-hulled oil tankers in order to safeguard the environment.
    • The Oil Pollution Act of 1990, enacted after the Exxon Valdez oil spill, required tankers to have a full double hull; this detail was omitted from the commercial.

Reputation Quotient

  • 66 axes, 2020 attributes
    • Social responsibility
    • Emotional Appeal
    • Vision & Leadership
    • Financial Performance
    • Workplace environment
    • Products & Services
  • Well known: can drive public opinion
  • Reliable
  • ‘risk’ manager in case of investments

Axios Harris Poll

  • Based on a survey of about 17k Americans, nationally representative.
  • Each year, the public’s top-of-mind awareness of companies is surveyed.
  • 100 “most visible companies” are ranked across key dimensions of reputation.
  • If a company is not on the list, it did not reach a critical level of visibility to be measured.

Your Turn

  • Of all companies you know which two have the highest reputation? This from your point of view
  • Discuss amongst your peers (10 minutes):
    • Why so?
      • One note taker
      • One presenter (oral)
  • Choose 1 company
  • Rate the company chosen on the 20 aspects listed using a rating scale from 1 to 10 (1 = not compliant at all, 10 = fully compliant) (10 minutes):
    • Add up the figures.
    • What does this figure tell you about the corporation?
    • Present back to the group.

Corporate Reputation Statements

  • Corporate Reputation should be more about prevention than cure
    • Yes
    • No
  • Companies with strong Corporate Reputation have less turnover
    • Yes
    • No
  • You could influence Corporate Reputation of a company
    • Yes
    • No