Daniel Diermeier, Ph.D.
IBM Professor of Regulation & Competitive Practice; Director of Ford Motor
Company Center for Global Citizenship, Kellogg School of Management
Reputation Management: Beyond the Obvious
Reputation Management:
Beyond the Obvious
Toyota
March 2, 2010: Hearing before Senate Commerce Science & Transportation Committee on Toyota’s recall
LIVELINESS:
© 2012 Daniel Diermeier
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Goldman Sachs
LIVELINESS:
April 27, 2010: Hearing before Permanent Subcommittee on Investigations United
States Senate
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BP
June 17, 2010: Testimony before Congress
LIVELINESS:
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The Cost
Company
Lost Value
Equivalent
Goldman Sachs
$26 billion
American Express
BP
$90 billion
Procter and Gamble
Toyota
$25 billion
Motorola
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The Taste of Water
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Consumption
Amount of water consumed (mL)
Amount of Each Company's Water Consumed
Engaged
140
Defensive
No Comment
120
100
80
60
40
20
0
Company in Crisis
1
Unrelated Company
2
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What do Managers think?
Predicted Public Attitudes
Predicted Public Attitudes
5
4
3
2
1
Engaged
Defensive
No Comment
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Empathy
The Trust
Radar
45
40
35
30
25
20
15
10
5
Commitment
Transparency
Expertise
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Beyond
Customers
Company
Customers
Media
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Reputational Terrain
Societal Importance
Analysis and
Interpretation
Facts
Stories
Live Updates
Audience Interest
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An Integrated Approach
Intensity
Business Decision
Reputational Crisis
Impact on
Company
Managerial
Control
Time
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The Second
Circle
Firm
Customers
Media
Influencers
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Issues –
Influencers –
Impact
Firm
Customers
Media
Influencers
Issues
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Risk Driver: Outrage
•
Moral outrage is derived from perceived norm violations. The deeper the attachment
to moral norms, the bigger the outrage. Trust violations are particularly serious.
•
Outrage is accompanied by strong emotions and a desire for punishment rather than
deliberate reasoning.
•
Fairness is one of the most widely held moral norms. It can be observed universally
though its exact content is affected by culture.
•
Many business decisions are based on efficiency calculations and ignore fairness.
They focus on incentives and the creation of wealth. Lay people tend to focus on
fairness and the distribution of wealth.
•
Issues of pricing and compensation issues are particularly prone to trigger outrage. In
many cases they are also interpreted as signal about a person’s or organization’s
“moral character”.
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Novelty
Risk Driver:
Fear Factors
Dread
Powerlessness
Salience
Victims
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The Awareness – Control Tradeoff
Issues
Influencers
Impact
Intensity
Awareness
Control
Time
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Reputation Management System
Decision System
Alert
Actionable
Feed-Back
Strategy-Driven
Intelligence System
Early-Warning System
Impact Assessment
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