Tuesday, July 10, 2007

China's sullied image

A strong global reputation matters

From The Statesman

Let’s see how long it will take China, Inc. to refurbish its sullied image of selling contaminated toothpaste, farm-raised catfish, shrimp, eel, pet foods (responsible for numerous deaths), toys (with lead paint), electric goods, and poor quality tyres responsible for hundreds of accidents in the United States.

Since China’s economic boom depends upon exports, China, Inc. is dumping poorly inspected goods on the global market. India, Inc. should be on the alert about the quality of its products and services. The whole world is watching.

Reputation matters. Reputation is the foundation of trust and loyalty, which gives people confidence in dealing with a corporation or for that matter a country. A strong reputation and endearing image of a company or a country can help it to rise from any serious crisis. A company’s identity and its image are the building blocks of its reputation.

Identity is a company’s assertion of its individuality and embodies the company’s vision, its reason for being there. It re-enforces its business case. The image of a company on the other hand is the distinct memorable impression in the minds of the people as they interact with the company. Together, identity and image raise the profile of a company, its reputation, its significance beyond commercialism and profit-making. People’s perception of a company, however, emerges from the totality of the impression created by the company, sometimes in spite of itself.

While a company could do its utmost to build and control its identity, it cannot totally control the image, the impression, the perception, the public has about it. A company’s identity and its image are never the same, but closer they are, better is the reality, which is the basis of the company’s reputation. A company’s name, symbols, products, services, employees, buildings, all its tangibles and intangibles, are not merely a cluster of facts; rather, they constitute a dynamic system that creates specific values and meanings for the stakeholders.

While it is possible and desirable to achieve consistency in identity, Apple’s (iPod, iTune and iPhone), for example, the image of a company should no be expected to be the same in every country. McDonalds’s and Pizza Hut are two of the many fast food chains in the United States but in India they have the image of a desirable American food, in spite of the fact that the identity of the company, its sounds and images, are by and large the same in India as in the United States. The corporate identity of a company must embody its core values and the sums and substance of what is called its business case. Identity as the visualisation of a company’s mission answers the unasked question: Who are we, and what are we doing here? Through logos, mottos, slogans and brands, a company enacts the drama of self-presentation and builds its image and perception in the mind of the public and various stakeholders.

While a consistent and well-defined identity of a company and the image it projects before the public helps it to build a perception of the company what it stands for, the reputation is built over time and depends upon how the company conducts itself in conformity with its identity and image.

China-Darfur, China-Olympics, China-slave labour are in the same perceptual domain.

A strong reputation matters because it enhances a company’s attractiveness, softens criticism, and creates public support for the company’s activities. Customers don’t mind paying a little extra for a product when it comes from a company with a strong reputation for reliability. It becomes easy for a company to implement changes and introduce innovations based on the trust created by the company’s good reputation.

A company with a strong reputation attracts talented employees, who like to stay with the company for personal and professional growth. The likeability of a company by its employees and their day-to-day interaction with various stakeholders adds to the reputation of the company. Employees become the corporeal identity of the company embodying its values and mission. But when a CEO is found with his pants down or his hand in the cookie jar, the reputation comes crashing down.

Corporate advertising can be a very effective communications tool for projecting the image of a company in support of its business case. Moreover, it can be an uncensored and unfiltered voice of a company, especially when the company comes under media attack. Institutional advertising can be used to express a company’s views on various political, social, and environmental issues as well as in support of its corporate vision.

When two companies merge to form a new company, corporate advertising can be effectively used to inform stakeholders about the new vision of the emergent company. The newly merged company needs to forge an image and identity that are new and at the same time incorporate the past trust and traditions of the original companies. A case in point is AT&T corporate advertising that presents its new global vision symbolised by the space image of the earth and the company’s networking abilities. Building on the strength of the two telecommunications companies (AT&T and SBC), the new company began to create a new brand image and identity for itself.

AT&T has now become associated with iPhone and its reputation will rise and fall with the quality of service it provides to customers. Issue or advocacy advertising is very important for companies, especially when they come under a threat from special interest groups, civic society activists, and the government. Since issue advertising deals with controversial topics, it should be handled very carefully. Issue advertising reaches the stakeholders of a company directly; therefore it can counteract the unfriendly opinions of journalists who have negative views of the company. An imaginative and creative corporate advertising programme can enhance the reputation of a company and increase its likeability in the minds of various stakeholders.

Likeability generates goodwill and creditability, which are very precious assets for a company to attract and retain good and highly skilled employees.

In some ways countries that depend upon external trade are no different from global corporations. They depend upon international public goodwill. While China may suppress public opinion at home, it cannot tell Americans to shut up and accept whatever shoddy goods it exports to the country.

ND Batra is the author of Digital Freedom: How Much Can You Handle?

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