In order to retain market value, a customer base and employee loyalty, an organisation must take stock of its reputation. With social media and public opinion increasingly dictating the success or failure of companies and brands, workplaces must provide sound customer service and be cognisant of wider society when managing their public image.

From diverse disciplines in Management Sciences, such as Business Management, Marketing and Human Resource Management, we aim to unpack the outcome of reputational damage, especially when it’s based on racial profiling, and what can be done in the aftermath.

Demonstrating inclusivity and sensitivity – when advertising products, dealing with customers and retaining employee loyalty – can assist an organisation to build a positive public reputation. However, demonstrating conflicting values can alienate customers and lead to a loss of employees.

As the Black Lives Matter movement grew in the USA, organisations like JPMorgan Chase and Pinterest were criticised for endorsing the action group yet failing to combat racism and equal rights in their own workplaces. The Ellen DeGeneres Show experienced backlash because of reports of racism and intimidation behind the scenes, while the host herself endorsed equal rights and regularly encouraged kindness towards others.

Despite changes made by management and a public apology from both the company owners and Ellen DeGeneres, the show is still struggling to regain its viewership and repair its reputation. As part of their Unhate campaign, Benetton featured an advertisement that showed world leaders kissing each other. The ad ran in several countries and was severely criticised as Benetton had not got the consent of the world leaders pictured. The campaign also featured Pope Benedict XVI kissing a famous Egyptian imam. This picture was immediately removed after being condemned by the Vatican.

In South Africa, a Tresemmé/Clicks advertisement that depicted black African women as having dry, damaged hair in comparison to white women, who were shown as having fine, flat hair, was met with furore. These types of ads are ingrained in deep-rooted structural differences related to race, ethnicity, gender and more that permeate organisations and form the basis of inequality within the corporate environment. These companies state that their values are to demonstrate openness and respect; yet this goes against the content of the adverts that went out. Another company in SA that is facing reputational damage, as well as bankruptcy, is aQuellé, following an investigation involving allegations of human rights violations, including molestation and rape, and money laundering.   

Many are well acquainted with the concept of “people, planet, profit”, but organisations tend to focus on the “profit” aspect, forgetting that profitability also depends on “people” and “planet”. Companies need to be aware that they exist within a particular environment, and form part of the communities in which they do business. Businesses that treat their staff negatively tend to lose sight of the fact that within these communities are political, economic, social and technological factors (PEST) that could potentially affect operations.

Therefore, it is essential that organisations regularly perform environmental scanning, which will provide a better idea of the social implications of employee treatment (diversity and perceptions), the political environment (the reaction of political parties) and the technological environment (social media). Crisis situations that result from negative behaviour should not be purely negative – they present an opportunity for organisations to make improvements to their management processes in a way that considers stakeholders.

The backlash that Clicks experienced highlights the fragility of brand reputation. If consumers hold unfavourable perceptions towards a brand, that will culminate in a negative brand reputation and reputational damage. Organisations need to be mindful of the fact that the reputation of their brand can easily be damaged if they are perceived as enabling any undesirable values or practices.

It is essential that companies engage in market research before any marketing campaign is implemented, and to pre-test the campaigns to ascertain if the desired outcomes are realised and the reputation of the brand is sustained. However, when there’s been reputational damage, organisations need to reposition themselves in the market. This entails changing the views consumers hold towards a brand. But before repositioning can commence, organisations need to be guided by market research to determine the desired image of the brand. The function of public relations can also be used to help rebuild a brand’s reputation.

The vision, mission and values of an organisation inform the culture of the workplace. However, attitudes and actions demonstrated by leaders and staff enforce the culture and climate experienced. Employees are vulnerable to decisions made by management and colleagues – one act or miscalculated risk can cost an organisation its reputation and have a huge impact on staff. Here are a few possible outcomes for staff from a human resource perspective when organisations experience reputational damage:

• Employees will experience feelings of mistrust and uncertainty, and feel unsure about the future of a company; they might question whether they should stay committed towards their leaders and colleagues.
• If before a crisis there was incongruence between what an organisation stands for and its social climate, staff are unlikely to be as loyal during a crisis. However, if there was congruence between the existing culture and the experienced climate, staff might be more loyal.
• How the leaders in an organisation respond to a crisis will affect staff morale further and could determine whether they remain or not.

It takes time to repair damage to an organisation’s reputation. Leaders need to gain the trust and commitment of employees by utilising these strategies:

• Acknowledge that a mistake was made and own it. It’s important to stick to the facts, rectify the mistake and be transparent about why the mistake was made without focusing too much on blame-shifting.
• Reinforce the values of the organisation and provide clear examples of conduct that is in line with the set values. Provide plausible explanations of why an action that led to the mistake goes against the organisation’s values
• Take authentic action to repair the crisis – clear steps that will be implemented to prevent this from happening again.

Leaders need to think carefully before taking important decisions that could hamper the reputation of an organisation and from which they might never recover. Marketers should also conduct proper research proceeding with campaigns, and managers should be fair and inclusive in meting out fair treatment to staff.  

Professor Nasima Carrim is an Associate Professor in the Department of Human Resource Management; Professor Alewyn Nel is Head of the Department of Human Resource Management; Dr Olebogeng Selebi is a Lecturer in the Department of Business Management and Dr Tinashe Ndoro is Senior Lecturer in the Department of Marketing Management at the University of Pretoria.