After recent reports of accounting fraud, executive misconduct, and other questionable activities in corporate America the consumers have lost faith. To manage this loss of faith companies must rebuild consumer sentiment. To accomplish this, reputation management needs to be reassessed. The Harris-Fombrun Reputation Quotient assists in corporate image management by providing companies with an established approach to measure reputation and corporate image.
Reputation is measured through: emotional appeal, products and services, financial performance, social responsibility, workplace environment, and vision and leadership. According to Harris Interactive, “your stakeholders’ reputation is your corporate reputation. ” Emotional Appeal “Emotional appeal isn’t easy to define, but you know it when you see it. ” (Alsop) Emotional appeal is a powerful driver of corporate reputation. A positive emotional appeal allows customers to harbor good feelings like admiration, respect, and trust. A company’s reputation can be linked to the consumers’ emotional appeal.
To appeal to the consumer you must focus on their wants and then their needs. According to Binnie Perper, emotion is stronger than intellect. Most people would rather indulge themselves with a desire than to fulfill a need. Many of the most important decisions in life are decided emotionally rather than logically. With this in mind it is important to aim the organizations message at the emotional side of the consumer’s thought process. In general consumers do business with companies that they like so it is essential to forge a loyal bond and build growing relationships.
When genuine bonding happens the customers inner needs are satisfied, which then generates respect and trust back to the organization. According to US News and World Report, “the public likes a company it can trust. ” A good emotional appeal can create lasting relationships with customers that can endure even the hardest of times. Products and Services When it comes to products and services corporate image can make or break a company. Corporate image is the essence of a company and its products and services are like its children. If the company is seen as bad or good this reflects on the success of its products or services.
As Merilyn Seymann notes, “it is important to have a plan [which] becomes a blueprint for who you are and who you are not, what you do and what you do not do. It contains your vision-your reason for being and your missions and the goals that move you toward your vision. ” (Seymann). For any company a mission statement can be the blueprint for what a company’s missions and goals will be. It is important to have a mission statement so if there are questionable products or services they can be measured to see if they parallel it. A company’s services can create various effects when dealing with corporate image.
Earnest Buggish works for a food service company called Corporate Image Dining Services. He says, “when people come into a corporate facility, how you display the food and how key people and staff present themselves—the uniform and the look is extremely important. (Buggish) Buggish’s quote is an excellent example of how service can affect people’s views of a company. If McDonald’s all the sudden had terrible service such as long waiting lines and unfriendly staff, people would no longer want to eat there. Therefore, service is a very important factor of corporate image.
On the other hand a halo effect can occur. If a company’s services are very good, even though their products may not be the best, because of the excellent service people may see the products as being better than they actually are. Good products definitely help a company’s corporate image. Specifically strong product brands are very helpful in boosting a positive corporate image. Timothy Teran a director of consumer insights in Citigroup’s global marketing group says it best. “we are constantly striving to strengthen our brand based on what matters to our customers”. (McGeer).
The customers are the ones who use the products and if they are not satisfied corporate image may suffer. Even if a company may not be focusing on a certain brand it is important to have quality and diversified products. Sometimes too much brand identity may even hurt a company. In the New York Times, Claudia Deutsch gives an example of how two companies who relied on brand identity were negatively affected. Smith Corona was a leader in manual typewriters, and Polaroid had a lock in the instant camera market, but both wound up in bankruptcy when they could not extricate their identity from antiquated technologies.
From the following example it is important to note that product diversity is beneficial to corporate image. Along with a quality product it is good to have a diversified amount so that the company’s is not solely relying on one product for its corporate image. Proctor and Gamble is an excellent example of a company that has a vast variety of quality products. Corporate image relies on many factors and, products and services play a large role in this. Because customers rely heavily on products and services when using and judging a company, it is important that the company have excellent service and quality products.
Having a mission statement can aid a company in being successful when dealing with products and services. Workplace Environment The way employees are managed can create either a positive or negative relationship between the employees and the company they work for. If strong relationships are built the employees are more dedicated and committed to the company itself and the job they are doing. “The difference between a good place to work and a great place to work can be seen in business results. Great places to work realize increased customer loyalty and profitability.
Costs are down as seen in measures of turnover, resistance to change, and healthcare costs. ” (Stopper) Management should always foster an environment that embraces diversity through diversity training. Management should also create a non-hostile atmosphere where employees can feel safe. Employees of the organization should always be treated with honesty, fairness, and respect. Management also has the responsibility to not manipulate, misrepresent, abuse or conceal information regarding employees.
Management should always avoid conflicts of interest between work and personal affairs and has a responsibility to never act or ask anyone to act unethically. The appeal for others to want to work for your organization is also an essential aspect of the work environment. The main question asked here is “Is this a good company to work for? ” This can encompass the physical working conditions, established relationships, and also additional benefits of working for the specific organization. The physical environment can vary between actual safety issues to adequacy of pay or even the availability of additional benefits.
The appearance of good working conditions and good jobs makes organizations attractive to the public’s opinion. The way employees are treated is not just an internal aspect of how a company is viewed. The customers’ opinions of how employees are treated are just as relevant. Employees should be treated with respect because they add value to the company. Companies can use internal quality audits to increase employee satisfaction and in turn improve the quality of the workplace. “Companies should view themselves as a group of individual functional units and internal customers.
Middle managers have the responsibility to create a positive work environment by developing a common goal, encouraging employees to reach their potential, and coordinating the total quality effort. The steps in implementing an internal quality audit include establishing objectives, developing process measures, auditing the process, solving problems, and re-auditing the process. ” (Dodson) These steps are necessary because satisfied employees that are dedicated and committed to the organization are more willing to give back to the company. Long term satisfied employees make companies look good.
Let’s face it; you cannot fudge employee satisfaction and dedication so it is a great overall measure of the company’s environment. Vision and Leadership In today’s busy marketplace a company’s leadership and vision along with the corporate image can be the deciding factors between success and failure. Sixty-one percent of the surveyed executives at Columbia Business School said, “Vision is one of the three most important skills needed by global business leaders. ” (Pomeroy) The vision must fit with the businesses overall strategy. The purpose of the vision is to attract, motivate and retain leaders.
It needs to focus on the practices and programs the organization has to offer. Corporations that define and establish a clear and concise vision statement gain both competitive advantage and the loyalty of their employees. A strong corporate image will help to attract the best leaders in the market. When a company has a negative image, qualified people are not as easily attainable. This in turn can create a cycle that will lead to the overall demise of an organization. A company with a strong vision, which is accepted and supported by the general public, will help boost its corporate image.
A great example of this would be Microsoft. Bill Gates took his vision and made it into a world known and renowned empire. Another example would be for a monopolistic company to flood the market with faulty products and shoddy customer service to expect a negative rapport with the consumers reflecting their poor corporate image. Financial Performance Financial performance has a direct link to corporate image. With a positive corporate image stakeholders will look to purchase portions of a company through stocks. A positive image makes the company more attractive to prospective buyers.
The financial performance is not only affected by stakeholders but by the customers that purchase and use their products. Most consumers choose to not do business with a company that has a poor corporate image. Companies with a positive image are able to attract and retain employees, which helps keep training and hiring costs down. According to Margolis and Walsh, there are two types of relationships between corporate image and financial performance. These are short and long term financials. Short-run financials can be positive or negative due to a publicized act that has created an overly good or bad image.
Enron is a perfect example of a negative publicized act that had a dramatic affect on their financial position. A consumer could not watch a news program without hearing about the latest Enron scandal that affected the trust of all their stakeholders. The second type studies the long-term effect using accounting methods to track the financial performance over an extended period of time. Analysts that are watching companies and comparing financial statements year to year can easily see this. Both short and long term relationships have had mixed reviews when studies were done. Social responsibility
Corporations are spending an increased amount of resources to promote programs contributing to the good of society and the organization. Widespread reports of unethical and illegal decisions made by high-level business executives have led to the demise of the corporation’s social responsibility. “The public has a show-me attitude and won’t easily absolve a company of reputation flaws. People are waiting to see companies demonstrate more goodwill toward their customers, employees, and local communities. ” (Alsop) There is much debate on how much social responsibility a company should have. The Harris Interactive public opinion poll found people split on how far citizenship should reach. More than half believe companies’ responsibility should be limited to employees, customers, shareholders, and local communities. About 45 percent, however, feel that companies must address global social problems, too. Only 2 percent said a company’s responsibility is simply to generate profits for shareholders. ” (Alsop) To have a powerful corporate citizenship a company needs to be highly visible and trusted without seeming fake because even the most scandal-ridden companies have made superficial attempts to appear ethical.
When a company truly believes in the social initiatives and programs they support this can be accomplished. Responsibility in many areas is important, as show by Toyota who believes that there are many areas like “social contribution and environmental image” are equally important to their quality products. (LaReau) In today’s highly publicized market companies can no longer ignore the importance of their corporate image. If companies want to maximize the value of their reputations they must make reputation management a fundamental part of their corporate culture and value systems.
To retain stakeholders, companies must build a rapport through lasting relationships based on trust and integrity. Each dimension: emotional appeal, products and services, financial performance, social responsibility, workplace environment, and vision and leadership are equally essential to the reputation quotient. With high rankings in each of these dimensions a corporation should be well on their way to achieving a positive corporate image and reputation. Corporate Image and Wal-Mart Emotional Appeal Wal-Mart appeals to its customers with friendly greeters and yellow smiley faces scattered throughout their stores.
With their everyday low prices, Wal-Mart appeals to all price conscience consumers. The motto of “Always low prices. Always” says it all in regards to Wal-Marts success and appeal. Wal-Mart does not only offer low prices but it prides itself with outstanding customer service. A great example of pride in customer service is the “Sundown Rule. ” This concept is based off the saying “why put off until tomorrow what you can do today. ” Wal-Mart strives to fulfill requests they receive before sundown, recognizing that their customers are important and should not have to wait.
Just like every company, Wal-Mart has its fair share of unhappy employees. Wal-Mart has recently been in the spotlight due to allegations regarding employment law infringements. Wal-Mart has also been named in an ongoing gender discrimination lawsuit. Overall there is mixed sentiment regarding these issues, but it does not change the physical and monetary appeal of Wal-Mart to their shoppers. Products and Services Wal-Mart’s statement of ethics is centered around Sam Walton’s “Three Basic Beliefs. ” They are: 1. Respect for the individual, 2. Service to our customers and, 3. Strive for excellence (www. almartstores. com). When analyzing Wal-Mart on corporate image for products and services they have always held their ground. Focusing on number 2. Wal-Mart definitely provides much service to its customers. Currently Wal-Mart carries all the major brands when it comes to appliances, home care products, auto products, clothing and, groceries. Wal-Mart’s Supercenters are also very innovative. Each Supercenter has: a full grocery and bakery, a pharmacy, an apparel department, a fine jewelry section, a photo processing center, a vision center, a lawn and garden center, and a Tire and Lube Express.
In addition to all these amenities some Wal-Marts even have nail shops, hair salons, banks, and a food place such as McDonald’s. Wal-Mart has definitely diversified itself when it comes to products and services. By focusing on the customer and having a wide variety of products and services, many customers are loyal Wal-Mart patrons. Wal-Mart Work Environment According to Wal-Mart’s ethics statement they are committed to create a workplace that their associates are proud to work for. They refer to their associates as the global members of the Board of Directors; this shows that they want to build ties with their employees.
They also go on to discuss the positive environment that they want to establish between their associates, suppliers, business partners and any other stakeholders associated with Wal-Mart. Wal-Mart Vision and Leadership When Sam Walton opened his first Wal-Mart he had a vision, a vision of a great store that has grown beyond anything he could have imagined. Current CEO Lee Scott said it best with “All we want to do it grow” (The Economist) and grow they have. Wal-Mart has aimed for the top and has made it there. But it wasn’t by luck that it became the giant it is today.
Strong leadership has pushed Wal-Mart to achieve more; the introduction of the Supercenters is a prime example. Wal-Mart Financial Performance Wal-Mart has become a giant in the financial arena, with its strong hold in the stock market along with its dominance in every community. In 2004 Wal-Mart boasted sales of $288. 189 billion with projections looking positive for 2005. To go along with the enormous sales Wal-Mart stock is currently trading no the New York Stock Exchange at $47. 35 with 4,224,587,000 shares outstanding. The skies are the limit for Wal-Mart when it comes to financial performance.
Social Responsibility High on the priority list at Wal-Mart is community improvement. They have a unique approach that is guided by associates living in neighboring areas in order to understand community needs. Wal-Mart’s contributions are not only financial but also with volunteer support organizations to help make a difference. Wal-Mart offers a Sam Walton community scholarship programs for high school seniors, non-traditional applicants, and current Wal-Mart associates. Overall, Wal-Mart has shown its concerns not only for the consumers that walk into their doors but to the community that surrounds the store.
In conclusion we acknowledge that Wal-Mart has many weaknesses that are hopefully offset by their strengths. Wal-Mart prides itself on customer service that appeals to its stakeholder’s emotional side. They offer a variety of products at extremely low costs and provide exceptional customer service. The structure of the workplace is in the best interest of the employees’ welfare. Wal-Mart has a strong vision and is obviously a leader in the marketplace. The company reflects outstanding financial performance. Wal-Mart is positively involved with community development.