Corporate Reputation

Corporate Reputation

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Gaines-Ross, Leslie John Wiley & Sons, Inc., 2008 Audio summary available
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IN THIS SUMMARY

Corporate crises, such as those resulting from the Three Mile Island nuclear accident and the Tylenol poisonings, have always been a part of business, but the number and magnitude of crises have increased greatly since about 2002. In studying these crises, “it became apparent that corporate downfalls were neither born overnight nor accidental. A lengthy trail of missed or misinterpreted signals usually preceded a crisis.” In Corporate Reputation, Dr. Leslie Gaines-Ross explains why reputation matters to a company’s bottom line and its well-being, identifies 12 steps companies can take to recover from a damaged reputation, and offers guidelines for restoring and maintaining a company’s long-term reputation. Damage to a company’s reputation is very likely in today’s fast-paced business world which involves the instant transfer of information through e-mail and blogs, influential individuals and organizations who can sway public opinion, and consumers who have learned to distrust corporate intentions and actions. Gaines-Ross believes that “everyone deserves the opportunity to redeem themselves and that second-act performances are in many cases far superior to the first.” She uses a medical analogy to suggest that reputation recovery is not just about what happens in the emergency room to help stabilize vital signs, but it needs to include postoperative care and a long rehabilitation before a company can begin life anew. Gaines-Ross makes the case that a positive reputation is crucial to the success of companies and political groups. In a crisis, a company with a good reputation is given the benefit of the doubt by stakeholders–they give the company an opportunity to make amends and expect the company to do the right thing. One group estimates that as much as 63 percent of a company’s valuation is attributable to reputation from both hard and soft payoffs. The opposite is true for companies with poor reputations; they must “work harder and longer than companies held in high esteem.”