Reputation Capital
Joachim Klewes Robert Wreschniok Editors Reputation Capital Building and Maintaining Trust in the 21 st Century 123
Editors Prof. Dr. Joachim Klewes Pleon GmbH Bahnstr. 2 40212 Düsseldorf Germany joachim.klewes@pleon.com Robert Wreschniok Pleon GmbH Theresienhöhe 12 80339 München Germany robert.wreschniok@pleon.com ISBN 978-3-642-01629-5 e-isbn 978-3-642-01630-1 DOI 10.1007/978-3-642-01630-1 Springer Heidelberg Dordrecht London New York Library of Congress Control Number: 2009933415 c Springer-Verlag Berlin Heidelberg 2009 This work is subject to copyright. All rights are reserved, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilm or in any other way, and storage in data banks. Duplication of this publication or parts thereof is permitted only under the provisions of the German Copyright Law of September 9, 1965, in its current version, and permission for use must always be obtained from Springer. Violations are liable to prosecution under the German Copyright Law. The use of general descriptive names, registered names, trademarks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. Cover design: WMXDesign GmbH, Heidelberg Printed on acid-free paper Springer is part of Springer Science+Business Media (www.springer.com)
Contents Reputation capital Building and maintaining trust in the 21st century...1 by Joachim Klewes and Robert Wreschniok Introduction...1 Acknowledgements...7 Part I: Reputation in the 21st century Good or evil? Trust and reputation in the age of globalisation...11 by Mark Eisenegger Trust and reputation Fundamental and indispensable...11 The true, the good and the beautiful Three-dimensional reputation..12 Why is reputation important?...15 Regularities...16 In conclusion: The financial market crisis and its consequences...20 Reputation or: How I learned to stop worrying and love the market...23 by Jonathan Silberstein-Loeb Reputation and testimony...24 Reputation and the market...26 Propositions...30 Markets, information, and reputation...31
VI Contents Part II: The business case for reputation Recognition or rejection How a company s reputation influences stakeholder behaviour...39 by Manfred Schwaiger, Sascha Raithel and Matthias Schloderer Reputation as a management objective...39 Our approach to corporate reputation management...42 Reputation and capital market performance...46 Reputation and the war for talents...49 Conclusion...51 What s measurable gets done Communication controlling as a prerequisite for a successful reputation management...57 by Reimer Stobbe The basic model of communication controlling...57 Reputation in the impact level model of communication controlling..68 Conclusion and implementation...69 The role of corporate and personal reputations in the global war for talent...73 by Kelvin Thompson And yet the war for leadership talent rages on...73 Talent and the science of assessment...74 Reputation matters more than ever...75 The search begins...77 Why executive search can help...80 The CSR myth: true beauty comes from within...83 by Matthias Vonwil and Robert Wreschniok Corporate social responsibility an approximation...85 CSR as a function of social reputation...87 Social reputation in the public s perception...88 Actively cultivating social reputation as a reputation risk...92 Beyond CSR: towards a new approach to corporate social responsibility...96 Summary: Questioning CSR...97
Contents VII The Brussels reputation story the interplay of public affairs and reputation...101 by Peter Lochbihler Reputation and the European Union...102 Reputation and public affairs...103 How does an organisation s reputation have an impact on public affairs activities with EU institutions?...105 A glance at public affairs in practice...107 What characteristics of a good reputation matter especially in Brussels, and how must an organisation present itself there to enjoy the trust of EU institutions?...109 Part III: The 21st century of reputation crisis Managing reputational risk A cindynic approach...115 by Sophie Gaultier-Gaillard, Jean-Paul Louisot and Jenny Rayner The essential triangle: the organisation, its message and its partners expectations...115 The mechanisms of reputation...119 Potential dissonances impacting negatively reputation...127 Reputational risk management A vital approach within the ERM framework...136 Managing reputational risk Case studies...143 by Alex Hindson and Jean-Paul Louisot Case study 1 Tylenol product recall Treating contamination?...144 Case study 2 Coca-Cola product contamination Leaving a bad taste....149 Case study 3 Mattel recall Playing with safety?...152 Summary of the lessons learned from the cases...157 Managing reputational risk From theory to practice...161 by Sophie Gaultier-Gaillard, Jean-Paul Louisot and Jenny Rayner What is reputation?...162 Why is reputation valuable?...163 Implementing risk management for the risks to reputation...168
VIII Contents Reputation and regulation...179 by Hans Caspar von der Crone and Johannes Vetsch The mechanism of reputation...179 Emergence of regulation...181 Regulation and risk awareness...182 Re-establishing the reputation...184 Regulation of financial markets...185 Self-regulation and government regulation...187 Measuring risks to reputation...197 by Frank Herkenhoff The location of reputation risks...197 The basic model of risk management...198 Theoretical basis: selection research...198 The process of risk management...203 Risk management...210 Crisis management in the media society Communicative integrity as the key to safeguarding reputation in a crisis...215 by Ansgar Thießen The value of reputation for organisations...215 Crisis situations as a threat for reputation...218 Safeguarding corporate reputation through crisis communications...220 Conclusions and outlook...226 Getting the stain out of sustainable brands...235 by Jeremy Cohen In PR terms Green is red hot...236 Green branding A new industry...237 Beyond PR The cardinal sin...240 The 3 Es...244 Conversational marketing...246 In conclusion...247
Contents IX Our reputation is at stake Corporate communications in the light of the global economic downturn...249 by Dirk Popp This crisis is especially vicious. Isn t it?...249 Media in downturn Crisis communication in upturn...250 Globalisation and new media act as accelerants...252 Day-to-day business is eating up strategy...253 Crisis communications in practice: Proven instruments have to be deployed strategically...254 Telling bad news and keeping morale high...258 Part IV: New perspectives for reputation management in the 21st century Community reputation communicates change to the world...263 by Joachim Kuss Reputation is people s business...263 Community reputation is a phenomenon of globalisation...265 If you concentrate too much on your image, you endanger your reputation...267 Use and communicate the full range of events...269 Community branding is the core of reputation management...270 Practical rules for community reputation management...271 EU accession: Turkey s reputation on its journey towards EU membership...273 by Arzuhan Doğan Yalçindağ and Julia Schankin How does country reputation management work... 274 The TUSIAD campaign: Managing Turkey s reputation...276 The role of the media... 277 The role of opinion leaders... 278 Measuring a country s reputation... 279 Dialogue as a trust building measure... 281
X Contents Consistency: a proven reputation strategy. How companies can optimise their message...287 by Joachim Klewes Corporate Messaging A challenge similar to herding cats?...287 Reputation A complex concept...288 Observing the reputation building process The Reputation Experiment...290 Strategies for successful corporate messaging...294 The Agora of the 21st century: On the invention of many-to-one communication...299 by Robert Wreschniok Onwards comrades, we have to go back...301 Reputation opportunities and risks in the media society...302 The Agora of the 21st century...304 The democratisation of communications...305 Are companies ready for many-to-one dialogue?...307 People seek dialogue...308 The leader's role in managing reputation...311 by Gary Davies and Rosa Chun The potential role...311 The spill-over from leader to corporate reputation...312 The curse of the charismatic CEO...315 The personality of the leader...317 The leader s role in a crisis...318 The role of other leaders...320 Coca-Cola Hellenic reputation case study...325 by Jens Rupp Reputation and trust...328 Building reputation responsibility...330 Corporate social responsibility...331 Watching reputation grow...336
Contents XI Never underestimate the importance of details...339 by Tomaso Galli Building reputation in luxury today...339 The role of the fashion press...340 Critical assets for a luxury brand reputation...341 Luxury brand strategies...343 Luxury brands and corporate communication...344 Learning from the luxury business...345 Is there no prescription? Reputation in the pharmaceutical industry...347 by Andrea Fischer All just a question of communication?...349 A long way: Approaches to improving reputation...350 We market our products according to strict rules...351 We produce safe products...353 We care about others...355 We can work better...357 Part V: Reputation strategies for the 21st century Who wants to be a millionaire? Investment strategies for reputation management in the 21st century...363 by Robert Wreschniok and Joachim Klewes Reputation as a strategic investment...365 Return versus risk...376 One man, one company, two sectors: The first reputation millionaires of the 21st century...381 Part VI: Appendix About the authors...387 Index...393