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CHAPTER 19
THE PUBLIC AND CORPORATE REPUTATION
INTRODUCTION
How the general public perceives a business firm can have a major effect on its
performance and its ability to remain in business. Therefore, building a positive public
reputation for providing superior products or services is of great importance. Most
companies employ many people to help establish and maintain a good reputation. Their
job is to formulate a strategy that includes, at a minimum, the careful management of the
brand, interaction with the media, and managing key issues that may arise, and
successfully responding to any unanticipated crises. Ultimately, maintaining a positive
public reputation depends on acting in an ethical and socially responsible manner.
PREVIEW CASES
Yahoo and Yelp Partnership
Beef Products Inc. (BPI) and Pink Slime
Both the Yahoo-Yelp and BPI examples illustrate the importance of maintaining a good
reputation with the public. In an era when information travels at lightning speed through
both conventional channels – television, radio and newspapers – as well as social media
outlets – blogs, Web sites, twitter, e-mails and others – reaching thousands, if not
millions, of people, reputations can be lost in an instant. While businesses seek publicity
and spend millions of dollars annually to improve their image and reputation, company
executives must navigate many minefields as they compete for the hearts and minds of
the consuming public. This chapter will define the general public as a stakeholder and
present a variety of tools that businesses can take to build and protect their reputations
and brands.
CHAPTER OUTLINE
I. THE GENERAL PUBLIC
Teaching Tip: The General Public
There are numerous issues important to the public that involve
businesses. One of these issues is childhood obesity but there are many
others. It may be a good exercise for students to search various media
sources to identify some of these current issues.
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II. WHAT IS REPUTATION?
A. Why Does Reputation Matter?
III. THE PUBLIC RELATIONS DEPARTMENT
A. Using Technology-Enhanced Channels for Public Relations
IV. BRAND MANAGEMENT
V. CRISIS MANAGEMENT
VI. ENGAGING KEY STAKEHOLDERS WITH SPECIFIC TACTICS
A. Executive Visibility
B. User-generated Content
C. Paid Content
D. Event Sponsorship
Teaching Tip: Crisis Management
Are there recent examples of a business crisis in your region or
nationally in the news? Students could analyze these examples and
compare them to examples presented in the chapter. Or, have the
students carefully analyze the Wendy’s crisis management response, as
described in Exhibit 19.B. How could Wendy’s have improved their
crisis response? Students also may want to apply the 12 steps found in
Exhibit 19.C to a current crisis situation faced by an organization.
Teaching Tip: Why Does Reputation Matter?
Students might want to poll other students at their school to see which
firms have the best and worst reputation. The survey could go outside
the school to people on the street, or people students work with, or
family members. The differences, or similarities, might be interesting
to discover.
Teaching Tip: Executive Visibility
Ask students “who are the most visible executives in your region?”
“Why are they visible, because of a tragedy at their company or for
good works in the community?” “Does an executive want to be visible
or stay behind the scenes?”
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E. Public Service Announcements
F. Image Advertising
GETTING STARTED
KEY LEARNING OBJECTIVES
LO 19-1: Recognizing why the general public is an important organizational
stakeholder.
LO 19-2: Understanding what constitutes a good corporate reputation and why it is
important.
LO 19-3: Knowing the basic elements and activities of a firm’s public relations
department.
LO 19-4: Assessing how brand management can best manage a firm’s reputation.
Teaching Tip: Event Sponsorship
Students could engage in an exercise where they are planning an event
and think about who could become a sponsor for their event and why
are these sponsors helpful to the event?
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LO 19-5: Evaluating a firm’s crisis management plan as an effective tool for
handling an unexpected situation.
LO 19-6: Recognizing tactics that enable businesses to engage with the general
public and other stakeholders to enhance the firm’s reputation.
KEY TERMS
brand management
corporate identity
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INTERNET RESOURCES
DISCUSSION CASE
JP Morgan Chase’s #AskJPM
Discussion Questions
1. What are the benefits and costs to JPMorgan Chase’s reputation given its use of
a stakeholder question-and-answer session on Twitter? How do its various
stakeholders now think of JPMorgan Chase’s image?
freedom that the social media offers to those with strong opinions. The public had
2. Develop a reputation management strategy for JPMorgan Chase to combat the
bad publicity it encountered.
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and professional. It is unclear if any of these approaches were used in the social
media effort described in the case.
Other options are available to JPMorgan and mentioned in this chapter.
3. Would you define this incident as a crisis? Assume you are JPMorgan Chase’s
CEO and are conducting a press conference, what main points about the
incident should you emphasize to the media and convey to the public?
Assuming that JPMorgan had prepared for a crisis, essential for any crisis
JPMorgan may also need to correct the misconceptions people have of the company
4. What other tactics mentioned in this chapter could JPMorgan Chase use to
improve the public’s opinion of their products? Should it use Twitter again and,
if so, how can it avoid a repeat of this embarrassment?
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