KATHMANDU: Managing reputation seems to be an increasingly important task for companies as consumers and NGOs become more vocal and more likely to share information on companies’ activities through social media. Nowadays, corporations can lose their heavily invested-in reputation in an instant through information disseminated on Facebook, Twitter or other social networks. Many companies expand their public relations departments and employ reputation managers to build reputation as a strategic asset, which can lead to competitive advantage. They spin information to their benefit and invest heavily on campaigns to build or re-establish their image after a scandal.
In its April 21st issue, The Economist featured an article, ‘Why companies should worry less about their reputations’. Far from stating that reputation is irrelevant, the author primarily sees reputation as a by-product of the core business. Instead of making a good reputation, an objective in itself, he suggests focusing more on providing the best products and services and being recognised and recommended due to
fulfilling (or exceeding) customers’ expectations.
This is an option to consider for those companies which misunderstand corporate social responsibility (CSR) as a mere marketing tool and design their activities for the sheer sake of publicity. Pushing quick and usually short-lived publicity and exposure in the media often does not make a lasting difference in terms of image building. Investing strategically and continuously in good stakeholder relations will, in most cases, result in positive perceptions towards a business.
Building a reputation through CSR would require starting at the same point as recommended by The Economist — providing the best products and services. Apart from that, decent sales and marketing practices, good customer service and quality assurance are more likely to create a positive image among customers than random donations which unfortunately often fail to create a lasting impact.
A company’s reputation among the community will most probably be much better if neighbours benefit from jobs and business opportunities, preventing environmental damage, continuous investment in health and education than just a one-time sponsorship of an event.Last but not least, a company’s reputation will benefit from satisfied employees who can be their strongest advocates. Again, decent compensation packages, fair treatment, long-term investment in workplace cooperation, grievance-handling mechanisms, trainings, conflict-management and safety will go a long way.
A good reputation is almost always built on credibility, integrity and decent business practices. Real CSR should be about creating win-win situations and responding to stakeholders’ needs in order to sustain the business and its reputation in the long run. Or, as the
famous German entrepreneur Robert Bosch once put it: “Better to lose money than to lose trust.”
(The author is a CSR expert at National Business Initiative and can be reached through email@example.com)