The paper “ Enron Scandal - Internal and External Reputational Forces, Facts That Make Up the Brand Corporate Reputation, Importance of Managing the Corporate Reputation“ is an earnest variant of case study on marketing. It is a common trend in all industries for companies to protect their brand and in this respect; they can even incur huge costs to ensure that they have a good brand reputation for a long period. Corporate reputation is of great importance to organizations but at times, this can be challenged. Thus, the need for companies to ensure that they maintain a good reputation.
A good corporate reputation will be of benefit to a great number of stakeholders such as the employees, the customers, and the investors. Thus, companies need to invest highly in their corporate reputation to have a competitive advantage over their competitors in the industry. It is a common trend in all industries for companies to protect their brand and in this respect; they can even incur huge costs to ensure that they have a good brand reputation for a long period. A strong and good brand reputation plays an essential role in making an organization a success over its competitors in the market.
Thus, companies treat their reputation with the greatest level of esteem and they do everything to ensure that their brand name is maintained and protected at all times. There are companies such as BP, which have failed in one way, or another and this have really affected their reputation in the market greatly. The example of the BP oil spill shows how a big name and company can be crippled by a bad public opinion.
Thus, managers ought to take note of these and ensure that at all times they maintain their reputation at all costs. The Enron scandal which was publicized in October 2001 and later led to the bankruptcy of the Corporation and the dissolution of Arthur Andersen offers on the way in which the reputational risk of a company can be a major threat to it. By analyzing and looking at the aftermaths of the scandal, there is a clear demonstration that organizations need to manage with a lot of scrutinies about their corporate reputation.
This is because when a reputational risk occurs the value of the brand in the market is affected greatly and at the same time, the society may shun away from such companies, which at times may lead to reduced sales, and at times, some businesses may be forced to close shop indefinitely. The reputational risks of companies are usually spread through the use and negative public opinion. From the Enron case, it is evident that the company suffered because of having a negative reputation and thus the credibility of the firm was really questioned.
Thus, in the end, the shareholder lost an equivalent amount of cash four years before the bankruptcy. Defining brand corporate reputationCorporate reputation can be termed as a soft concept that entails the overall estimation in which all the internal and external stakeholders hold the organization and this is may at times vary based on the probability of its behavior as well as the past actions. It is important to note that organization have at times been found to have different reputations from its stakeholders and this is mainly as a result of the experiences that the stakeholders have when it comes to dealing with the organization and also based on what the various stakeholders have heard from the others (Aaker & Joachimsthaler 2000).
A great number of organizations all over the globe place a lot of importance on a good reputation in all their dealings and thus they consider their good name and reputation as being their greatest assets. This mainly applies to the knowledge-based organizations, for example, those who deal with professional services.
Despite the fact, reputation is an intangible concept, a good reputation tends to increase the corporate worth and offer a sustained competitive advantage over the others in the industry. There exist three major components that make up the corporate reputation and they include the corporate image, corporate identity as well as the corporate personality. Thus to enhance a good reputation organization always needs to address and take note of the corporate personality, corporate identity and corporate image (Awang & Jusoff 2009).
Aaker, D & Joachimsthaler, E 2000, Brand Leadership, The Free Press, New York.
Aaker, D 2000, Brand Leadership, Free, New York.
Awang, Z & Jusoff, K2009, ‘The effects of corporate reputation on the competitiveness of Malaysian telecommunication service providers’, International Journal of Business and Management, vol. 4, no. 5, pp. 173-178.
Baden-Fuller, C & Hwee, S 2001, ‘Building reputations: the role of al¬liances in the European Business School scene’, Long Range Planning, vol. 34, no. 6, pp. 741-755.
Barnett, M, Jermier, J & Lafferty, B 2006, ‘Corporate reputation: the definitional landscape’, Corporate Reputation Review, vol. 9, no. 1, pp. 26-38.
Blackston, M 2000, ‘Observations: building brand equity by managing the brands' relationships’, Journal of Advertising Research
Craig, C, Douglas, S & Nijissen, E 2001, ‘Integrating Branding Strategy across Markets: Building international Brand Architecture’, Journal of International Marketing, Vol. 9 No 2pp 97-144.
Healy, P & Krishna G 2003, ‘The Fall of Enron" (PDF)’, Journal of Economic Perspectives, vol. 17, no. 2, pp. 1.
Keller, K 2003, Building, Measuring, and Managing Brand Equity, Prentice-Hall, New Jersey.
Mudambi, S 2001, ‘Branding importance in Business to Business Market’, Journal of Industrial Marketing, no. 31