Amit Biswas
One important step in strategic reputation management is to understand the environmental landscape the organization is breathing and living in. In other words, the strategic tools and approaches to managing reputation could be ideally very diverse in the context of the company’s environment, which represents the arena of engagement between the organization and the external world. It may be smooth, slippery or a hot ground to negotiate, and the strategic game plans also do differ based on the ground realities. To allude to some theoretical perspective, the ‘arena’ model on organizational reputation was emphasized by several management experts like Ralf Stacey (1991), Pekka Aula & Saku Mantere(2008). The important enquiry for any company to understand the mechanics around reputation management is to envision its arena - the bounded landscape for socio-corporate exchange, interaction and communication with the public. It is the zone where its reputational communications flourish or perish, get successfully interpreted or misinterpreted. Most organizations strive to build a positive public reputation as close to its own perceived identity by framing different communication contents and encoded messages with a view to bringing cognitive, emotional, ideological and functional consequences on the receiver (Hall, 1992). But no organization has full control over the meanings and interpretations of such communication on the public. The reputational communication is a dynamic process where its meanings are - based on the characteristics and the configurations of its operative arena – contested, negotiated or accepted in interpretation.
Reputation is negotiated in the ‘arena’ which forms its platform for communication, competition and combat. To elucidate reputation-strategizing Aula & Mantere [“Strategic Reputation Management – Towards a Company of Good”, 2008] talked about four distinct arenas the organizations find themselves in. While establishing their model, they relied on two elements – (i) the undercurrents of the existing communication system, whether integrative or dissipative, (ii) the actors or agents, mainly indicating the organization and the public. Basically, the cross-currents of these two elements define and shape four arenas, where reputation thrives or perishes.
Peace
The first arena is characterized by ‘Peace’ and goodwill - some sort of utopian harmonious state, which however is an idealistic construct. Here, trust and harmony prevail in the environment; the messages and stories delivered by the organization are accepted by the public with an integrative credence with no doubts. For the public, there is no contradiction between what the company seems to be (‘seeming’) and what the company really is (“being”). Here, the stories told by the organization are accepted by public honestly without dispute or conflict. Hence, building a framework of reputation becomes a goodwill journey – linear, smooth and trustful.
Defensive Battle
The second arena pertains to what they called ‘Defensive Battle’. Here the semblance between ‘seeming’ and ‘being’ gets broken by various dissipative interpretations, and they tarnish the sanctity of reputation. The messages sent by the company are received with mixed and contradictory reactions, sometimes with mistrust and confusion. With the reigning perception of the organization being challenged, the company rolls back on a defensive stance and concentrates recovering the lost ground. The communication storylines get reframed to reinforce the company values, reassure their societal and corporate commitments, all aimed at restoring the dissipated recognition. As a recent example we may talk about Great Lake Cheese, a fairly well-known Ohio based dairy products company. This is a 60 year old $2 billion company in the Midwest and was accused of animal cruelty and abuse by the animal rights activists. A non-profit animal rights organization, Mercy for Animals, sometime in fall 2014 published an under-cover video taken at a Wisconsin farm, a milk-supplier to Great Lakes, showing the dairy farm-workers chopping off the end of a cow’s tail.
Following the uproar and media outrage, which were definitely dissipative and disintegrative for the reputation of this 60-year old company employing about 1,800 employees, it responded quite constructively by affirming its no-tolerance policy to any sort of bovine cruelty or mistreatment. They said tail-docking is to be completely phased out by 2018. Apart from stopping the procurement of milk from the Wisconsin based diary, which was at the root of the outrage, Great Lakes also adopted an animal welfare policy in line with one of the United States’ major diary trade associations.
Other examples, where the organizations launch defensive battle to protect their reputation, include the recent automobile-related recalls. According to the National Highway Traffic Safety Administration, the USA auto industry recalled close to a third more vehicles (22 million) in 2013 than it sold (little above 15 million) that year. Recalls spiraled up to 25 percent during 2013, the known industry’s highest percentage since 2004. Not only Toyota, Ford or GM alone went through that defensive battle on similar turbulent turf, every known car company also had to struggle through the crucial phase of recall at some point over the decade.
Offensive
The third arena, profiled as ‘the offensive’, is characterized by an organization going on a proactive or offensive campaign to smash the unified meaning of the reputation prevalent in the society and public, and rebuild identity from scratch. In parallel, the public perception of the reputation could be volatile and dissipative, replete with contradictory and unfavorable interpretations. In scenarios of this kind, the organizations consciously try to escape from its entrenched reputation, which might have already turned either anachronistic or inconsistent with its current identity. The organization might discover a big gap between the views of its ‘being’ and ‘seeming’ and aggressively set out to challenge its own image. Alternatively, often a company may even go to the extent of challenging and dismantling a very coherent reputation - well-synchronized with its real corporate identity but marred by some contradictory and adverse public perceptions - and venture to re-position itself with some different characterizations.
Riot
The fourth arena is symbolic of riot. It is characterized by ruckus and turmoil, when neither the public nor the company tries to unify their perceptions. It is a state of affairs when the reputation of the company is in shambles and their stakeholders are in utter disarray and confusion on how to rebuild reputation. Reputation of the company, as we mostly observe in the riot arena, is splintered and their official messages are in conflict with their marketplace actions. In the arena of riot, the companies are generally found to pursue flawed reputational strategy and ethical lapses are quite common. Many recent scandals have experienced the riot. Some known examples includes Enron( 2001) leading to its bankruptcy, Freddie Mac( 2003) that misstated $5 billion earnings, Lehman Brothers(2008) hiding $50 billion in loans as disguised sales and Satyam(2009) falsely boosting revenue by $1.5 billion.
In the backdrop of the arena model discussed here, a question automaticallypops up – what strategies the firms do need to embrace under different reputational arenas? Here, the strategic choice rests largely on the institutional relationship that company maintains with the public. The strategic plan is operationalized through the commonly agreed communication channels, which ae governed by the institutional relationship. These are mainly ‘one-to-many’ institutional channels like press, radio, publications, internet and social media.
When the organization is calmly ensconced in Peace arena, the suitable strategy the institution emphasizes may be referred to as the ‘Senator’ strategy. Here the company takes the stance of a statesman, spreading the reputational messages openly and consistently with logic with the least lash-back or refutation. As we had earlier mentioned, ‘peace’ is a sort of less realistic construct in the context of institutional and business relational complexities, this strategy stands just as a theoretical paradigm.
In the ‘Defensive Battle’, the strategy to adopt is of a ‘Defense Counsel’. In defense counsel strategy, the company utilizes the official channels to present facts, logic and the arguments to justify and vindicate its position. All efforts are directed toward repairing the misunderstanding with the public and restoring the lost ground. To quote an example of the strategy of this sort, we may allude to Johnson & Johnson’s response to the Tylenol crisis in 1982. The company landed into a major crisis, when seven people died after taking extra strength Tylenol, which were laced with cyanide. The company immediately called off the capsules from the market ignoring loss of huge sales and expressed its commitment and concern with the consumers. It is still rated as classic defense counsel strategy that helped the company successfully manage the crisis and rapidly restore its trust in public.
The strategy consistent with the third arena (the offensive) is known as the ‘Champion’ strategy. You need the vigor and valor of a champion to challenge the ‘adverse’ reputation story etched in public mind. The company goes out with a convincing agenda and a loud voice through public channel to make the challenge. With this strategy, the organization goes full on with a proactive bang to uproot the old and seed in the new reputation story. During early 1990s Denny’s restaurant chain became the symbol of continuing racism in America as tales of discrimination emerged, replete with repulsive treatment to black customers.
Into that abyss stepped in Jim Adamson, who at the time was heading Burger King. With his charismatic championship, he delivered a loud and clear message to make inclusiveness and diversity as the core theme of the company culture. Since his take-over in 1995, he turned Denny’s not only profitable, but its reputation went through a very significant and positive reversal. For two successive years, Fortune magazine named it as one of the 10 best companies for minorities to work for, with almost 20% of its supplies being controlled by minority contractors, and more than 30% of its franchised restaurants owned by people of color.
In the arena of riot the institutional strategy, a company may choose is of a ‘Chameleon’, where the company radically changes its form and character. It intentionally demolishes its story coherence and spreads messages to tease out the element of surprise with a view to generating chaos. In the chameleon strategy, the company presents a very contradictory, yet convincing, story with a major image- re-branding agenda, generally coupled with a substantial advertising push.
