“It is difficult to maintain a good reputation”
A company’s reputation is among its most valuable assets. It is important to be visible and to be an active participant for not getting involved with lawsuits concerning poor labour conditions or corruption for instance. The company must be aware of their suppliers and workers, if they want to avoid allegations for violating human rights. The company has to choose their employees wisely. If you are not seen as a good corporate citizen, various groups may protest or demonstrate where you do business, decline to do business with you, or not invest in your company at all. Therefore it is important to build and maintain it in a way where everyone has their own form of responsibility. Nobody knows how much a reputation is really worth, although many would say that it's priceless. The one thing we do know, however, is that once a reputation is tarnished, it takes a lot of hard work, and a long period of time, to regain its luster.
The main arguments of the article A stitch in time – How companies manage risks to their reputation is an article published in “The Economist” (January 17th 2008) are analyzed from the point of view of the relationship between companies and their reputation. There are several companies who have been accused of complying with global business rules. CSR is about companies operating globally and are socially responsible, for example by respecting human rights, social conditions, employment, environment, climate, etc. According to the Economist, it has become a fashionable thing to enhance ones reputation by getting involved in social programmes, especially when you support the so called third world countries. The logic in doing so is that the company gets to burnish its brand and protect itself from out coming attacks. The authors of the Economist article point out that it has become increasingly popular thing for companies to spend money on HIV testing and general treatments in Africa. Merck for instance has entered a partnership with the Bill & Melinda Gates Foundation and the government of Botswana to fight AIDS in Africa. When companies embark on doing something good and noble for the society or other countries aside their own, they automatically place themselves to achieve the trust of consumers, which in turn earns them a good reputation, thereby fulfilling their main goal in doing these “charity work”.
A good reputation can play a key role in a company’s success and development. When a company has a good reputation, it is more attractive to both customers and investors. Just as customers tend to assign a higher value to products produced by reputable companies, investors value reputable companies higher than disreputable ones. A company that has invested in its reputation is better equipped to influence stakeholder decisions concerning the company. Financial institutions, suppliers, and the media also pay close attention to a company’s reputation. A company that has a good reputation will also be able to attract and retain the best employees. It is what we have come to believe and expect from a company. With most investments and companies it takes time to develop a solid corporate reputation. Making sure that corporate CEO’s adhere to a code of conduct is also an important step towards developing a positive corporate reputation. The reason why business and brand names should be carefully managed and controlled is because they are the “public face” of one’s company. Although it can take time to build a solid corporate reputation, it can be lost almost overnight. In some cases, all it takes is a single scandal, or even the perception of corporate impropriety, for a company to lose their good reputation. Rebuilding a company’s reputation after it has fallen can take much more time and resources than simply making the investment to maintain it. Keeping close tabs on...