Reputation Management and sales (Essay Sample)

Name: Tutor: Course: Date: Reputation Management and sales Introduction Reputation management refers to the activities that an organization performs in an attempt to create or maintain a particular frame of mind as regards the organization in the eyes of the public (Helm, Liehr-Gobbers, & Storck, 2011, p.7). It therefore refers to a process of figuring out what the public is saying about the organization or what they feel about its business. After such aspects have been identified, the organization will institute the necessary measures to ensure that the reputation of the organization is in line with its goals. The internet has quickly developed into a major platform through which organizations manage their reputation (Lieb, 2011). It is common for organizations to apply various online tools such as social media, blogging, and so on, to monitor and manage their reputation. Reputation management is undoubtedly an integral element of public relations (PR) for any organization. The description of reputation management can be classified into three distinct categories. These categories are in fact the basis on which any organization undertakes to manage its reputation; they include; Building, maintenance, and recovery of reputation: Building reputation This form of reputation management entails the dedicated efforts to establish reputation for an organization in some or the entire aspects of its business. An organization assesses the public perception about the activities of the organization and utilizes it to improve its offerings in line with the wishes of the public. When a company builds good reputation for itself, chances are high that the company's sales will be substantially be boosted (Pearce, 2008, p.1). Maintenance of reputation Maintenance of reputation entails the reputation management activities meant to keep a superior organizational image in the public (Pearce, 2008, p.2). A company that has already established its reputation must consistently work to ensure that such reputation stays secure; through consistent market research, this can be undertaken in various ways, an organization substantially increases its chances of keeping its reputation secure. Recovery of reputation If an organization's reputation has been damaged by a particular incidence, it is important for the organization to institute recovery measures. With good self-promotion and marketing activities, which many reputation management companies are offering today, a company can be able to recover from bad reputation (Pearce, 2008, p.3). Online Reputation management Online reputation management is a practice of monitoring and regulating the reputation of an organization on the internet (Beal & Strauss, 2009, p.2). It is a practice undertaken with a view to regulating the perception of the public regarding that reputation. There are many strategies of online reputation management; they include various social networking techniques such as: directory listings- optimized key words are used to list a website in various directories; Blogging; it entails the use of blogs which are updated daily; Direct Reviews; a company hires individuals to write positive reviews of the organization on websites; Online Publicity; refers to syndicated writing of articles, banners, and links; Social networking; an organization can manage its reputation through page posting on Facebook, MySpace, and so on. Fundamental aspects of Reputation Management Reputation management has two fundamental sides to it, namely: monitoring what the public is saying, and controlling what the public see about the organization. Monitoring what the public is saying This is a great way of judging how people perceive a particular product or service. Most often, people will be honest about how they feel about an organization's services or products; the downside is that the organization is likely to receive more negative than positive feedbacks. When people are satisfied about a particular service or a product, they will rarely talk about it, but when the service is poor, they will write about it or tell everyone (Garcia, 2007, p.16). It is therefore highly important to monitor what consumers are saying about the organization. This can help the organization in tailoring its products in line with what the market desires. Controlling and regulating what people see about the organization If an organization is able to control what the public is reading about it, it becomes easy for such organization to manage its reputation online. It also helps the company in damage limitation. Basically, damage limitation entails addressing negative outcomes on the internet and instituting measures that reduce the level of damage it can do the organization. One of the ways through which such an objective can be attained is through managing results on search engines (Garcia, 2007, p.19). Through online management tools, an organization can prevent negative articles about it from appearing in a search engine's first pages. Organizational Case: Toyota Motor Corporation Toyota Motor is one of the largest corporations, globally, in the business motor vehicle production and sales. The company operates on a global scale in regions such as Europe, Asia, North America, Latin America, Middle East, Africa, and Oceania. Toyota's basic value proposition is offering consistently safe, reliable, and high quality products with a view to being able to inspire enthusiasm within its customers. The company's expansive global operations require well-tailored strategies in various areas, and one of such areas is reputation management. Reputation risk is one of the many risks that Toyota, due to the globalized nature of its operations, is exposed to. Consequently, the possible risk of damage to its reputation has to be considered as one of the forces that shape Toyota's reputation risk management. Forces that shape Toyota's reputation management Toyota's reputation management is driven by interplay of various factors, or rather forces, both in its internal and external environment. Generally, the key factors that have the capacity to affect a company's reputation greatly influence the company's risk management. Business and industry risks This factor can be explained in terms of the highly competitive and volatile nature of the global automotive industry. The global automotive market is intensely competitive and this means that to attain sales a company must maintain a good public image. This calls for effective reputation management. The intense competition in the automotive industry directly affects Toyota. Though the global economy gradually continues to recover, competition in the motor vehicle industry has only intensified in the face of difficult and challenging overall market situations. With the continuing trend of globalization, competition in the industry is further expected to intensify, possibly leading to further reorganization of the industry (Toyota Annual Report, 2011). The competition is influenced by factors such as product features and quality, reliability, fuel economy, safety, pricing, financing terms, customer service, and various innovation aspects. Amidst this competition companies cannot afford to risk reputational damage. If a company's reputation management is ineffective there are high chances of negative reactions from the public as they may turn to products of competing companies that whose reputation is good. Negative reputation in the automotive industry has the capacity to lead to decreased vehicle unit sales. The company's results of operations and financial condition may be impacted by trends such as downward pressure on prices. This intense competition is therefore one of the reasons why Toyota must take reputation management seriously. With effective reputation management, Toyota can increase its capacity to respond adequately to the factors that may have negative impact on its reputation and thus sustain its competitiveness. Maintaining competitiveness is one of the factors that are essential to the future survival of Toyota in the existing as well as new markets. No company is sure that its reputation is free of any threat. In the face of this intense competition, maintaining market share is highly important (Toyota Annual Report, 2011). Mitigating the factors that may threaten Toyota's reputation is therefore quite important. Political Forces External political factors are among the primary factors that determine the governess corporate model that a firm adopts. Corporate governance is the basic factor determining the ways through which an organization safeguards its financiers' (lenders, investors, and creditors) interests and this has a substantial impact on the reputation of the organization (Shaw, 2011). This factor is therefore quite relevant in the context of Toyota's operations. Toyota, due to its operations in diverse political environments, considers political factors as quite important in its reputation management. In having to operate in the different political environments, there are many risks posed to Toyota's reputational standing. Policy changes have the capacity to quickly alter Toyota's reputation. Additionally, the nature of a political system can have a substantial impact on Toyota's reputation. The damage limiting aspect of reputation management is quite important for Toyota to deal address any issues with its reputation (Shaw, 2011). Political factors are a significant cause of uncertainty with Toyota's reputation. Consequently, the factor plays a key role in shaping Toyota's strategies of managing its reputation. Economic factors Toyota's reputation management also takes into consideration diverse economic factors and conditions in the country where it operates. Currently, there are many messages regarding issues such as corporate social responsibility and the eco...