Rebuilding a Brand`s Reputation: Strategic Decisions To Overcome

Rebuilding a Brand’s Reputation: Strategic Decisions To Overcome Past Mistakes
Rebuilding a Brand’s Reputation:
Strategic Decisions to Overcome Past Mistakes
Research Proposal
Guillermo Fernández
European Master in Business Studies
October 2012
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Rebuilding a Brand’s Reputation: Strategic Decisions To Overcome Past Mistakes
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Content
Abstract ............................................................................................................................. 3
Introduction/Background .................................................................................................... 4
Problem statement ............................................................................................................. 5
Hypotheses .................................................................................................................... 5
Purpose.......................................................................................................................... 6
Relevance ...................................................................................................................... 6
Review of literature table.................................................................................................... 7
Methodology .................................................................................................................... 12
Desktop research ......................................................................................................... 12
Field research .............................................................................................................. 12
Other specifications ...................................................................................................... 14
Contribution .................................................................................................................. 15
Potential limitations ...................................................................................................... 15
Overview of chapters ....................................................................................................... 16
Plan of work ..................................................................................................................... 17
References ...................................................................................................................... 18
Already analyzed .......................................................................................................... 18
Considered interesting for further steps ........................................................................ 19
Rebuilding a Brand’s Reputation: Strategic Decisions To Overcome Past Mistakes
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REBUILDING A BRAND’S REPUTATION: Strategic decisions to overcome past
mistakes
Abstract
The thesis will explore the actions that companies carry out for recovering the trust of their
stakeholders after a mistake, failure, controversial or deceiving decision has been taken. In
the first part, I will go into the concept of reputation and its implications in depth,
understanding the value for the organization and whether its management is worthy or not.
Secondly, I will analyze the most significant literature on the rebuilding reputation process
in order to extract some conclusions. As a third step, I will compare theory and practice,
meaning by the latter, what some organizations have done in real life. For this, I will make
use of case studies that will lead to the identification of some patterns of strategies and
compare them with what scholars state. Fourthly, by means of a field research, I intent to
gather stakeholder’s perceptions, to get a feedback on what the interest groups of the
companies perceive of its recovery strategy. Finally, I will present conclusions and
recommendations of my investigation.
KEYWORDS: reputation; reputation rebuilding process; reputation strategy
Rebuilding a Brand’s Reputation: Strategic Decisions To Overcome Past Mistakes
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Introduction/Background
Rather often nowadays we hear in the news about companies’ unethical or reproachable
actions, things that should not have been done according to good behavior standards. As
a result, their images are damaged and so is the trust that society in general and
consumers in particular had on them.
In other words, the company seems to be, or is perceived as, less reliable for future
actions, assuming that if something reproachable has been done once, it can be repeated
again.
The concept behind this idea is called reputation. Although many definitions have been
proposed, one that summarizes the core aspects of decades of study is: “Observers’
collective judgments of a corporation based on assessments of the financial, social, and
environmental impacts attributed to the corporation over time” (Barnett, Jermier, & Lafferty,
2006).
Reputations can be decent or wicked. In the second case, when the harm is done, first it is
important to consider whether it is worthy to fix it or not. Companies operate in markets
characterized by imperfect information, and given that consumers cannot know everything,
firms with a positive background have a competitive and differentiation advantage.
The fact is that according to several studies, reputation is a relevant strength for the
enterprise, as it can be seen in “Corporate Reputation: The Definitional Landscape”
(Barnett et al., 2006) there is even a cluster of meaning that comprises definitions of
reputation as an “intangible asset”. It needs to be preserved because of its fragility (Herbig,
Milewicz, & Golden, 1994); and signals stakeholders about quality, enabling firms to obtain
several benefits in its market (Fombrun & Shanley, 1990).
Considered the previous, what does the company do for fixing it and being back on the
track of trustworthiness? Is there a clear strategy or at least an identifiable path of actions
aimed at the restitution of the lost honor? Sims, (2009) in his paper “Toward a Better
Understanding of Organizational Efforts to Rebuild Reputation Following an Ethical
Scandal” proposes a very relevant model that I take as a base to build the core idea of my
thesis up.
Rebuilding a Brand’s Reputation: Strategic Decisions To Overcome Past Mistakes
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Problem statement
What are the crucial strategic decisions that a company has to make for rebuilding its
reputation?
Hypotheses
H1: Proactive strategic actions have a positive impact on the reputation rebuilding process.
Considering the ones stated by Sims (2009) for evaluation:



Leaders' importance:
o
Reaction to crises
o
Leader’s attention
o
Role modeling
o
Allocation of rewards
o
Criteria for selection and dismissal
Single-loop redressive actions (short-term)
o
Denials
o
Referential accounts
o
Reactive decoupling
o
causal account
o
penitential account
Double-loop learning redressive actions (long-term)
o
Fixing the outcome
o
Rewarding positive behaviors
o
Employee training
o
Proactive decoupling
o
Implement new policies
H2: Only the passage of time, without any proactive action from the company, has a
positive impact on the reputation rebuilding process.
H3: Proactive actions are perceived as faster reputation rebuilders than the passage of
time by stakeholders.
Rebuilding a Brand’s Reputation: Strategic Decisions To Overcome Past Mistakes
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H4: Proactive actions are perceived as more successful reputation rebuilders than the
passage of time by stakeholders.
Purpose
During the research process I would like to answer the following derived questions
(partially based on the ones already formulated in the topics proposal)
1. Problem resolution

Are there different alternatives? Or does a clear path exist when it comes to
achieving the outcome of having a restored reputation?

What do companies do in practice?
2. Stakeholders perception

Which are the involved stakeholders?

Do people perceive the strategy?

How do they approach each of the groups?
3. Long-term consequences

Has the behavioral pattern of the company changed?

How to set up the methods for not failing again?

Do people perceive that something has changed?
Relevance
The identification and test of a pattern of strategic actions carried out by companies who
had failed in respecting social norms can result in a profitable set of tools for business that,
for whichever reason, have lost the trust of their stakeholders.
Rebuilding a Brand’s Reputation: Strategic Decisions To Overcome Past Mistakes
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Review of literature table
AUTHOR
Fombrun,
C., &
Shanley,
M.
Fombrun,
C., & Van
Riel, C
TITLE
MAIN OUTCOMES
RELEVANCE FOR THESIS
CONCLUSIONS
INTRODUCTORY ARTICLES
Aimed at giving a first background on the concept of Reputation, its definitions and theoretical implications
What’s in a
Reputation
 Sets the basis of:
 Referred by many as one
 Importance of reputation
- "The concept of Reputation"
of the first Academic works
management.
name?
definition,
The
consequences
of
on
"Reputation".
Reputation
Model
managing Reputation
 How to find out about the
building and
Reputation

Establishes
a
Model
for
reputation of a company?
corporate
Building,
Reputation
Building.

Gives ideas for the practice
strategy
Reputation

Sets
and
describes
a
list
of
part: ""How would you rate
Identification
signals to identify reputation in a
these companies on each
market with incomplete
of the following
information:
attributes..."
- Market
- Accounting
- Institutional
- Strategy
The
reputational
landscape
KEYWORDS
Reputation
perspectives

Gives several perspectives on
the concept of Reputation
(economic, strategic, marketing,
organizational, sociological) and
finally proposes an integrative
view.

First article published in the 
"Corporate Reputation
Review" and also a good
starting point.
An integrative view about
what reputation means.
Rebuilding a Brand’s Reputation: Strategic Decisions To Overcome Past Mistakes
AUTHOR
Barnett,
M. L.,
Jermier, J.
M., &
Lafferty, B.
A.
TITLE
Corporate
reputation:
the
definitional
landscape
KEYWORDS
Corporate
reputation ;
identity ;
image ;
reputation
capital



MAIN OUTCOMES
Differentiation between “Identity”,
“Image” & “Reputation”.
Link between the three concepts.
Very good inventory of previous
Academic definitions of
reputation, clustered according to
groups of meaning.
RELEVANCE FOR THESIS
 Summarizes previous
definitions: Very easy to
identify differences and
similarities among them.
 Proposes a new one.
 Clarifies connections
between key concepts.
8

CONCLUSIONS
Quantitative and
qualitative summary of
“Reputation” and
concepts related.
ON THE FIELD ARTICLES
A more specific set of articles, that provide insights on the core objective of the Thesis: “The Reputation Rebuilding Process”
Herbig, P., A model of
Credibility;
 Link between “Reputation” Helps to continue the
 A firm is reputed after its
“Credibility”.
process
of
understanding
credible transactions.
Milewicz,
reputation
Reputation
“Reputation” and the
 Proposes the: “Competitive
 For a company to be
J., &
building and
related concepts.
credibility model” to connect both
sustainable, credibility
Golden, J destruction
of them.
and Reputation should
have both a positive sign.
 A firm’s credibility is
positively related to its
reputation.
 Mixed signals will have
larger negative effects on
reputation and credibility if
spaced closer together
than further apart.
Rebuilding a Brand’s Reputation: Strategic Decisions To Overcome Past Mistakes
AUTHOR
Sims, R.
TITLE
Toward a
Better
Understandin
g of
Organization
al Efforts to
Rebuild
Reputation
Following an
Ethical
Scandal
KEYWORDS
Reputation
management
; reputation
rebuilding
process




MAIN OUTCOMES
Increasing relevance of the study
of Reputation.
Main structure of a reputation
rebuilding process (Public
breach, crisis, redressive action,
reintegration).
Relevance of the leader’s role
and actions to be implemented.
Differentiation between Singleloop (Short term) and Doubleloop (long term) actions.
RELEVANCE FOR THESIS
 It merges two models: one
on social drama and
another on leadership
mechanisms for building or
changing culture.
 Provides what seems to be
a consistent model on the
Reputation Rebuilding
routines.
9



CONCLUSIONS
Reputation is more like a
marathon than like a
sprint.
the consequences of a
damaged reputation run
far and deep (Pellet,
2008).
it is harder to recover
from reputation failure
than it is to build and
maintain reputation.
Rebuilding a Brand’s Reputation: Strategic Decisions To Overcome Past Mistakes
AUTHOR
TITLE
KEYWORDS
10
MAIN OUTCOMES
RELEVANCE FOR THESIS
CONCLUSIONS
METHODOLOGICAL RELEVANCE
Articles that clarify the methodological approach that can be taken in order to measure reputation
The two articles from Sabrina Helm presented below are part of the same Research. In “Designing a Formative Measure for Corporate Reputation”
she investigates about a suitable technique to measure reputation, and in “One reputation or many?: Comparing stakeholders’ perceptions of
corporate reputation” the results of the implementation of this already contrasted scales are shown.
Helm, S.
Designing a
formative
 Review of different
 Useful for the
 Interesting and very
methodologies for measuring
methodological part of my
comprehensive multi-step
Formative
indicators;
reputation:
study.
field research approach
Measure for
reflective;
o Measurement approach
to:
 I could use a similar
Corporate
reputation
o
Corporate
personality
approach
to
measure
how
Reputation.
measuremen
o Trust-based measures
stakeholders perceive the
1) Refine the terms to be
t; scales;
o
Expectations-based
reputation reconstruction
used:
structural
 Display of her own methodology.
after a failure.
o 40 interviewees
equation
 Filtering questions.
convenience
modelling
Consumers who:
sample
Helm, S.
One
stakeholder
 Different stakeholders consider
o Knew the company
o Two focus groups
similar criteria for evaluating a
reputation or analysis
name and were
o Scales refine
corporate’s reputation.
many?:
process (26
customers of the
Comparing
respondents)
company’s products
stakeholders’
o
20 consumers
and
perceptions
“Think aloud”
o Felt knowledgeable
of corporate
answer mode”
about its reputation.
reputation
2) Quantitative study once
the scales are contrasted
(762 usable questionnaires)
Rebuilding a Brand’s Reputation: Strategic Decisions To Overcome Past Mistakes
AUTHOR
TITLE
KEYWORDS
11
MAIN OUTCOMES
RELEVANCE FOR THESIS
CONCLUSIONS
METHODOLOGICAL RELEVANCE
Articles that clarify the methodological approach that can be taken in order to measure reputation
Puncheva- The role of
 Quantitative approach
 Introductory questions like:  Good complement to
considering 500 respondents in
“You have been offered a
Sabrina Helm’s research
Michelotti, the
different
situations:
job
that
you
like,
how
much
in order to identify my
P., &
stakeholder
o purchasing products from
would each of this
methodological approach
Michelotti, perspective
a company
statement influence your
to the subject.
M
in measuring
o
seeking
employment,
decision
to
take
the
job”
corporate
o purchasing shares
 Six different versions of the
reputation
o supporting the operations
questionnaire depending
of a company in their
on the targeted
community
interviewees in order not to
 Presentation of groups of factors
make it boring.
to evaluate reputation.
Rebuilding a Brand’s Reputation: Strategic Decisions To Overcome Past Mistakes
12
Methodology
The working process on the thesis will be divided in two major subprojects: Desktop and
Field Research. The two of them will be complementary and aimed at obtaining a global
perspective of the topic.
Desktop research
Objectives
1. Provide with a sustainable background of knowledge in:
a. The core concepts of reputation and the reputation rebuilding process
b. The field methodologies used by scholars specialized in this field.
2. Be an input for the field research
Implementation
Research on existing bibliography on the topic. Academic journals’ articles and
books:
-
Theory
-
Companies’ case studies
Some of the documents that I am already considering can be seen at the bibliography
section of this document.
Field research
Objectives
1. Obtain primary data to complement the findings obtained during the desktop stage
of the project.
2. Confirm or deny the theoretical assumptions
Implementation
Considering my experience taking part in various researches, and after reviewing relevant
literature on the methodological approach to study such an intangible concept as
reputation: (Helm, 2005, 2007 and Puncheva-Michelotti & Michelotti, 2010) I find wellgrounded the decision of opting for a Mixed Research Method; a combination of qualitative
Rebuilding a Brand’s Reputation: Strategic Decisions To Overcome Past Mistakes
13
and quantitative techniques in a sequential way; using qualitative data as an input for the
quantitative one.
Qualitative methods, like an in-depth interview, may provide me with detailed information to
justify my conclusions, whereas quantitative methods, like an online questionnaire, may
bring a pool of answers to establish the base ground.
Implementation:
In order to contrast the results from the theoretical part, and also to figure out if there is a
difference between individual and social perception of reputation; the implementation could
follow the next guidelines.

Ask about the stereotype of the company. What is your perception? before giving
any information about the company and putting it in the frame of reputation
repairing.

Storytelling:
o
Propose a small text (between 100 and 150 words) explaining the situation
of a company that has failed.
o
The firm could be:

Real (so the subjects recognize it and have a background on the
story)

Invented (in order to present critical issues that might be of interest
for the research)
o
After the text, some questions regarding the content will be proposed. the
groups of questions might be:

Perception of the company's reaction to the crisis.

Personal response in terms of behavior (i.e. did you avoid taking
petrol from BP? for how much time? are you taking it again?

Group response in terms of behavior (i.e. what did your friends do?
how long do you think that they would keep it in mind?)

Suggestions proposal (i.e. what would have you done if you were in
the shoes of the company? (individual assessment), What do you
think that society would like the company to do? (social component)
what do you claim to be the best strategy to get back on track?
Rebuilding a Brand’s Reputation: Strategic Decisions To Overcome Past Mistakes
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Participants
Individuals with enough knowledge about the companies analyzed and their past actions
and who consider having enough knowledge about the company's reputation (Helm,
2005).
At this moment I do not consider restricting the sample to a specific socio-demographic
group, given that the chances for people to know about the subject are not constrained by
these characteristics. Potentially, anyone with a sufficient level of awareness can take part
in the study.
Nevertheless, it would be very interesting to be able to achieve a multi-perspective view of
the rebuilding reputation process from different stakeholders. This would be a variant of
the strategy used in Helm’s article, where she wanted to evaluate the way of assessing
corporate reputation that different stakeholders had (Helm, 2007b). More information has
been provided in the review of literature section of this document.
Other specifications
Settings
Measurement Instruments
Qualitative
In person (Kassel/León) or
via Skype
 Storytelling
 Means-end chain
 Word association
 Sentence completion
 Wall of Pictures
 Projective techniques:
fictitious
situations:
““You
have
been
offered a job that you
like, how much would
each of this statement
influence
your
decision to take the
job”
(PunchevaMichelotti & Michelotti,
2010)
 Open-ended
questions
Quantitative
The Internet
Online questionnaire
Rebuilding a Brand’s Reputation: Strategic Decisions To Overcome Past Mistakes
Intervention materials
Qualitative
Video or voice recorder
Quantitative
Online survey software
Procedures
5 to 10 in-depth interviews
Between 200 and 300
responses
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Contribution
1. Analyze the impact of the different strategies in the success of reputation
rebuilding.
2. Provide with a different implementation of Helm's reputation measurement scales
(Helm, 2005) in the field of reputation rebuilding.
3. Statistical evaluation of the different strategies proposed for each of case using the
concept of support from the association rule learning method (Wikipedia, 2012)
Potential limitations
The most interesting approach would be being able to gather primary data from both the
companies subject of the study and the stakeholders involved.
In this regard, I currently find two major issues:
1. Unfortunately, lacking a direct contact with CEOs or business men from those
companies would risk my chances of reaching them. I will consider contacting them
as an additional option, but not as a first solution.
2. When interviewing stakeholders, it may be difficult to find subjects who are familiar
with the insights of how the reputation of a company is built.
Rebuilding a Brand’s Reputation: Strategic Decisions To Overcome Past Mistakes
16
Overview of chapters
1. Introduction
1.1. Background on the topic
1.2. Purpose of the study
1.3. Methodology used
1.3.1. Desktop Research
1.3.2. Field Research
2. Theoretical framework
2.1. The concept of reputation
2.1.1. The definitional landscape
2.1.2. Linked concepts and its relationships with reputation
2.1.3. Relevance of reputation and validity of the term “The Reputation Economy”
2.2. The reputation rebuilding process
2.2.1. Concept
2.2.2. The successful strategy
2.2.2.1.
Different authors’ proposals
2.2.2.2.
The reputation rebuilding journey: Agreed steps
2.2.2.3.
Short vs. Long term actions
2.2.3. Short vs. Long term consequences
3. Case studies: Reputation rebuilding implemented
3.1. Identification and analysis of main patterns of actions from companies trying to
rebuild their reputation
3.2. Comparison with theory
4. Stakeholders
4.1. Perceptions of the stakeholders about the process
5. Outcomes of the thesis and conclusions
6. Recommendations and limitations
7. References
Rebuilding a Brand’s Reputation: Strategic Decisions To Overcome Past Mistakes
Plan of work
17
Rebuilding a Brand’s Reputation: Strategic Decisions To Overcome Past Mistakes
18
References
Already analyzed
Especially the work of Charles Fombrun (Founder & Chairman of the Reputation Institute),
Ronald Sims and Sabrina Helm seems very interesting to me up to now. My Research
Proposal and knowledge about the subject is highly grounded on their publications.
Barnett, M. L., Jermier, J. M., & Lafferty, B. A. (2006). Corporate Reputation: The
Definitional
Landscape.
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9(1),
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Fombrun, C., & Shanley, M. (1990). What’s in a name? Reputation building and corporate
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and
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Herbig, P., Milewicz, J., & Golden, J. (1994). A model of reputation building and
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Sims, R. (2009). Toward a Better Understanding of Organizational Efforts to Rebuild
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