Corporate Communications and Corporate Branding - Case Study Example

Corporate communications, Corporate Branding (case study) Name: Institution: Corporate communications, Corporate Branding (case study) Importance of trust The provision of products and services tha affect the lives of the consumers are considered as a vital process to the wellbeing of a company. Trust is therefore a major component of the values of any company considering tha it is a strategic asset that directly affects the bottom line (Burke et al, 2011). In addition, trust is also considered necessary since it underlies all the relationships within a company including the definition of an organization culture. For Mattel Company and the British Broadcasting Corporation (BBC), for instance, trust is largely an emotional aspect that binds the clients to these organizations. Trust forms part of the cumulative behavior that facilitates the creation of confidence and a mutual relationship between consumers and the organization (Castaldo, 2007). The responsibility of maintaining and improving on the levels of trust is that of the organizations. This is through the products and services that are produced. Organizations have to ensure that there is the maintenance of confidentiality; consumer integrity and safety in the process of preparing their products and services tha are to be delivered to the (Hong et al, 2008). Mattel company for instance has the responsibility of ensuring tha tall its toys are produced in accordance with the safety standards.it is also the responsibility of BBC to ensure that its news items are reliable, genuine and developmental to the consumers. Loss of trust will not only lead to high instances of suspicion but will also lead to los of integrity of a company’s reputation to its consumers hence affecting its profit levels (Hong et al, 2008). Case study 2: Mattel Company The root causes leading to lack of trust In July 2007 Mattel Company was informed of the potential threat arising from the company’s toy giant supplier in China. This was following the discovery of relatively high levels of lead in its paints which are used in the decoration of its toys. This was considered as a breach of contract since the levels were illegal and the consumption or ingestion of lead from these toys could lead to serious health problems to the children who are the major customers of the company. It is important to note tha the problem was exacerbated by the realization that most of the products of the company that were sourced from China also had high levels of lead in the paint used in toys. In august of 2007 Mattel was faced by an additional problem that required the company to recall about 18 million toys considering that they were made of small but powerful magnets that could bond together in the digestion system if swallowed. The issue of trust levels of the company was resulting from the two problems whose main causes were relatively dangerous methods of producing toys especially in China. The design of the company’s toys was there hazardous to the wellbeing of the children. In addition, the company was also faced with the probability of child fatality considering that most of the target customers were children and for a long time the company had been considered as an honest manufacturer of toys. How effective do you consider the taken mitigation actions? The decision by the company to recall about 20 million toys from more than 40 international markets can be considered as an effective measure to help in the maintenance of a positive reputation of the company to the public. Inasmuch as the company experienced a loss of about $40 million as the cost for recalling and exercising correctional procedures on the products, the company was still able to maintain its corporate reputation. Though the stock price experiences a 30% reduction in a period of five months, the sales in 2007 were up by 6% while at the same time an American pool for the consumers perceptive towards the company’s products was at 75% approval. This was largely because of the technique through which the company used to take the responsibility of the Chinese suppliers. The prompt and immediate response by the company to warn consumers of the potential danger as well as open and candid engagement with the media on matter related to the failures of the company including accepting part of the blame and apologizing to those affected can be considered as an effective statement in boosting the company’s integrity. Despite the presence of numerous law suits filed against Mattel, the honest and contrite stance can be commended as an initiative aimed at ensuring that the sales of the company including its reputation was not only maintained but also improved. The reaction of the company also improved on the levels of interaction between the customers and the employees considering the desire by customers to seek more transparent information on the products of the company. What would have happened if the company did not publicly address the issues and make changes? The problem that was encounters by Mattel Company was not only based on issues of trust but also on the reputation of the company. If the company had failed to publicly address issues and make changes concerning the supply of paints and verification of products in terms of safety, the company could have attracted a negative reputation and reduced levels of trust. This could have been dangerous considering that Mattel was popular for the production of quality toys. Any loss of trust from the customers would mean a decline in the sales of the company and this could also affect the success of other products produced by other branches of the company in other countries. With a damaged reputation and decline of sales and the reduction in the price of its shares in the stock market, the company could not only have been faced with possible closure but also liquidation of the company’s assets. There could have been law suits against the company. This could have been attributed to negligence to safety standards that had been set by the international market. Such forms of negligence could have led to the suspension of the company’s activities in the local and international markets. In addition, the charges of negligence to the safety standards could have led to high amounts of fines against the company. Through fines and law suits the company could have been compelled to withdraw and recall all its products from the market and this could have been detrimental to the success of the company. Do you believe that the companies’ reputation can be re-built, or will they suffer the consequences also in the years to come? Despite the possibility of suffering from the consequences of the production of products Mattel can still build its reputation and improve on the level of trust among its customers. This can be realized through effective engagement of all stakeholders on the techniques of improving the image of the company. One of the ways is through effective communication to employees on the commitment of the company towards the promotion of high levels of integrity. This is essential in the maintenance of internal optimism and moral among employees. In addition, it is also a way through which the company cans communicate to its customers the effective measures put in place to deal with any form of crisis in future. The company will also be able to improve on the levels of its trustworthiness and reputation by lobbying for the strengthening of external regulations as way of improving on the perceptions stakeholders. For Mattel Company it will be relatively easier to rebuild its reputation. This is because the initial investigations into matters related to trust failure led to the discovery of more shortcomings in the design and production of its toys. This brought an understanding of the situation in the company and it can be considered essential in the development of reform interventions that will help the company in demonstrating its ability, benevolence in handling challenges. The decision by the company to share its experience of trust repair to the public is considered as an initiative that will augment the reputation of the company’s employees and that of the company itself in the process of rebuilding itself. Case Study 5: The BBC The root causes leading to lack of trust In 2007, BBC one of the leading broadcasting companies in the word was face with a crisis following a series of editorial misjudgments that had characterized most of the live and pre-recorded programs of the company. In July 2007 for instance, there were reports in the newspapers that the BBC was engaged in fake broadcast of programs. This included reports by viewers that in one of the flagship children television programs, Blue Peter, no viewer could get to participate in the live show despite numerous attempts. While citing an unavoidable technical difficulty BBC made it difficult for any viewer to participate in a charity phone in competition. One of the outstanding challenges was the allegation that a junior employee in a live broadcast of the program Blind panic, asked one of the visiting children in the studio to pretend to be a winner and this sparked reaction necessitating response from BBC. The realization of the deliberate intention among the broadcasters to deceive and mislead the audience led to trust related complications. Numerous incident including the phone- in competitions which provided the impression that but did not necessarily allow active participation of viewers brought with it significant damages to the reputation of the publicly financed broadcasting company. Questions were raised on the role of the BBC in reducing the maintaining of high levels of integrity and the ability to broadcast in excellence. This explains why by the end of July 2007more than 55% of the public had the feeling that their trust towards BBC had been damaged. How effective do you consider the taken mitigation actions? The decision by the company to suspend all the live phone competitions on half an hour broadcast can be considered instrumental ensuring an eradication of instances of fraud in the broadcasting industry. However, this is considered as a challenge to the broadcasting industry considering that it limits levels of creativity in broadcasting. The introduction of guidelines in the editorial policy and training on mater related to interactive broadcasting can be considered as an instrumental technique in ensuring tha there are high levels of professionalism among journalists. This was emphasized by the decision of the company to nominate a senior journalist to play the oversight role in ensuring that the live broadcasters operate according to the requirements of the organization’s codes of conduct and policies in live broadcast. The review of premium calling rates in live broadcast children programs, review of the existing laws on vote rigging and lions with mobile phone service providers to engage in constant checks and closure of lines that have been tampered with were effective measures that could ensure that the process of voting or engaging in phone-in competitions during live broadcast were not only streamlined but also transparent enough to minimize the possibility of the members of the organization engaging in corrupt initiatives. The measures were effective enough and this explains why the poll results of a study conducted in 2007 confirmed the confidence of the viewers in the ability of BBC to solve the problems. However, there were trust related compilations among employees considering that the organization was accused of ignoring matters related to the scandal in its annual report of 2008. What would have happened if the company did not publicly address the issues and make changes? Being a publicly funded organization, there are expectations on the role of BBC in maintaining high levels of integrity especially in the way it conducts its broadcasting initiatives, the main role of the company s to provide information and entertainment to its audience. This must be done in accordance with the professional code of ethics. Any failure in publicly addressing matters arising from the broadcasting programs and failure in making the necessary changes would have led to loss of public confidence. The public through representatives in the legislature would have used their powers to censure the organization together with its executives on graft allegations. Such allegations would have not only led to loss of employment opportunities to those found culpable it would have led to a reduction of the financial resources directed towards the organization by the government. The failure to publicly address issue related to the scandal and the institutionalization o the necessary changes would have led to accusation of the executives of the company of gross misconduct and the establishment of an alliance to defraud the public of different financial resources. It could have also been an indication f of the intention to hide information related to the natives of the company towards secret mobilization of financial resources. This could also have led to filing of numerous law suits against the broadcasting corporation and the involved employees. Such law suits are not only detrimental to the government but also to the public who would have had the responsibility of paying more taxes to support the intention to compensate the consumers affected by the scandal. Do you believe that the companies’ reputation can be re-built, or will they suffer the consequences also in the years to come? BBC can be considered as a great beneficiary of a positive reputation in the broadcasting industry considering its large consumer bases that over the years was developed by high levels of integrity and benevolence in the execution of their responsibilities. Based on this reputation and larger customer base, it is possible for the company to rebuild its reputation. The rebuilding of a positive reputation is considered as a paramount initiative for the company since it draws much of its legitimacy and finding from high levels of integrity when broadcasting to the public. The possibility of creating a positive reputation is evidenced from the ability of the organizations to engaged in costly but successive rounds of investigations to uncover the root causes of the scandal and introduce immediate and workable measures to control and diminish the possibility of the scandal reoccurring. Inasmuch as the introduction of new policies and procedures of regulating the conduct of staff may seem uncomfortable to the journalists, they are techniques tha are necessary in revealing to the public the level of commitment of the organization to solve problems. It is also important to note tha the intention of the organization to allow staff to speak out through the provision of amnesty was geared towards the attribution of blame to the right people. Taking responsibility of the scandal an organizational matter is also a technique that the company can use in the reconstruction of its reputation. Through such an action the organization can then engage all the concerned stakeholders and develop solutions that are not only applicable but those that are aimed at improving the image of the organization. Summary Trust is a major component of the values of any company considering tha it is a strategic asset that directly affects the bottom line. In addition, trust is also considered necessary since it underlies all the relationships within a company including the definition of an organization culture. Mattel Company was informed of the potential threat arising from the company’s toy giant supplier in China. This was following the discovery of relatively high levels of lead in its paints which are used in the decoration of its toys. In addition, the company toys to be containing small but powerful magnets that could bond together in the digestion system if swallowed. These led to a reduction of the trust levels in the company’s products. In 2007, BBC was faced with a crisis following a series of editorial misjudgments that had characterized most of the live and pre-recorded programs of the company. Beings a publically funded organization the levels of legitimacy and trust dropped and this prompted senior management to institute measures that would eradicate scandalous behavior while at the same time working on initiatives of improving the company’s reputation. From the problems identified by Mattel and the BBC, and the process followed to regain pubic trust it is possible to argue that public admission of the problem prior to the introduction of all the necessary measures is paramount in maintaining an existing reputation. Keeping the consumers informed and presenting a public apology on their behalf also provides a platform for the consumers with the view that the organization is transparent and dedicated in undertaking responsibilities in their interests. References Burke, R. J., Martin, G., & Cooper, C. L. (2011). Corporate reputation: Managing opportunities and threats. Farnham, Surrey: Gower. Castaldo, S. (2007). Trust in market relationships. Cheltenham, UK: Edward Elgar. Hong, S. Y., & Syracuse University. (2008). The effects of relational satisfaction, organizational reputation, and identification with company on customers' communication behaviors. Read More