Online Reputation Management - Assignment Example

Online Reputation Management Table of Contents Definition of terms 2 Importance of Corporate Reputation 3 The Shift to Online 4 Online Reputation Management 5 Conclusion 10 Abstract Online reputation management is a growing area of concern with significant academic as well as practical implications. Its importance as an area of study is underpinned by the increasing influence of social media on organizations and their outcomes. Unlike several decades ago where companies had nearly full control over the information that was publicly available about them, today, much of that control has shifted towards consumers. Thus, organizations have to be warieras a simple mistake or error, or otherwise undesirable element, is easily relayed to a virtually global audience. Several instances of corporations which have faced negative publicity outcomes due to damaging information release are provided. To overcome negative publicity, it is essential that corporations establish an online presence and closely monitor the information that is circulating online about them. By so doing, they will be able to manage their online reputation, and by extension their overall reputation. Introduction Organizations exist for particular purposes, primarily to maximize value for stakeholders. To achieve this objective, they usually interact with and engage a variety of stakeholders. They can only fulfill this, however, if they are perceived favorably by the different stakeholders. It is for this reason that organizations engage in reputation management through marketing activities such as public relations campaigns. In the traditional landscape, it was easier for firms to manage their corporate reputation, owing to the centralized nature of media outlets which meant that sources of information were limited, known and easy to control. However, with the dawn of the internet, and particularly web 2.0 technologies, the end user, the consumer, has become empowered. They can to generate their own content and relay the same to a virtuallyglobal audience. This has made it difficult for organizations to manage the information about them that is available within the public domain. To address the potential risk of reputation damage that is inherent and that has been made ever so imminent due to the pervasiveness of social media, it is imperative that organizations engage in online reputation management. The topic of online reputation management is intensively discussed. Definition of terms Corporate reputation refers to the image of an organization amongst stakeholders. Reputation threats usually pose a risk of detriment to the company’s image among stakeholders. They often arise due to expectation gaps between stakeholder’s expectations of corporate behavior and the perceived corporate behavior1. Such threats can be mitigated through reputation management, which is a tool used to diminish the risk of negative interaction outcomes2. Increasingly, this risk is arising out of interactions happening online, particularly on social media. Online reputation management refers to the way in which companies can deal with the content about it by people on social media effectively, so as to defend its reputation. Its importance is underscored by the need for companies to maintain a favorable public image that will sustain good stakeholder relationships.Social media refers to a collection of software tools, which are designed to facilitate social networking online and sharing of knowledge3. Social media use has increased, as have the number of social networking sites and other social networking tools. Importance of Corporate Reputation Corporate reputations and the corporate image of an organization play an important role for organizations. According to Hung et al.,good reputations are instrumental in establishing cross-buying intentions amongst customers and in increasing trust and affective commitment4. Customers usually affect one another’s perceptions about an organization. The sentiments of a single customer or a group of customers on an organization may have a profound and reverberating impact on the perceptions of other organizational stakeholders. The importance of corporate image is underscored by the fact that organizations commit considerable amounts of their resources to image control. In larger organizations, there is usually a public relations department whose primary task is to ensure that the organization has a favorable external perception amongst the general public. Moreover, firms also constantly engaged in strategically timed press releases, which avail a considerable amount of control over the specific content and quantity of information about an organization that is within the public domain. This is beneficial to organizations as they are constantly aware of what the dominant perception is about the organization is, and they can also shield themselves from negative publicity. The Shift to Online Advances in technology have occasioned a shift in the context of organizational reputation towards an online based context. This shift has radically altered the landscape in terms of corporate reputation. This is because of the pervasiveness of the internet. Of particular significance/concern is Web 2.0 technologies, commonly referred to as social media. Web 2.0 technologies, the platform facilitating socials media, is a dynamic descendant to previous web 1.0 technologies, which were static and did not allow for feedback mechanisms, and as such was essentially unidirectional. Web 2.0 technologies are however bidirectional and as such, individuals can respond to the content they read online5. More importantly, they can generate their own content, which is then broadcast to other users. The pervasiveness of social media has further been exacerbated by the prevalence of Smartphone possession and use. According to Hennig-Thurau, et al., (2010) users can carry out whatever activities they intend to undertake on their smart phones6. This is as opposed to traditionally where individuals had to have a desktop to gain web access. Social media use has profound effects on marketing activities of organizations. According to Hennig-Thurau, et al., consumers usually share their enthusiasm about particular products and brands through social media platforms and social networking sites7. In the same breath, consumers will also express their distaste and displeasure with particular products or services. In both instances, this information is disbursed to the same audience. Of essential emphasis is that such word-of-mouth campaigns over the internet tend to reach a greater number of individuals. The outcome can thus be of either of benefit or detriment to the organization depending on the nature of information disbursed, whether positive or negative. The importance of such impromptu and user-generated content on organizations cannot be ignored. Statistical findings indicate that many consumers rely on online reviews from other consumers to make decisions about business institutions. Gesenhues (2013) finds that buying reviews affect consumers' buying decisions, with 67 % of respondents reporting that they read online reviews. In particular, positive reviews affect 90% of buying decisions; while in the case of negative reviews, 86%. Thus, an organization’s online reputation is of substantial importance. It can have resounding economic repercussions and if left unchecked, can lead to devastating consequences. An example of this is Taco Bell. According to Dolle, a video of rats running around one of its stores in New York was posted to YouTube8. Within minutes, duplicates and new versions were being produced and spread across social media. The effect of the video was that the cleanliness of its restaurants was called into question, affecting sales in over 7000 of its franchisees and leading to a drop in its stock prices. Online Reputation Management To address threats to an organization arising from reputational damage, it is pertinent that organizations’ engage in online reputation management. Online reputation management is a relatively new area of academic study and marketing research, due to the impact of the internet revolution on business. Of particular significance is the advent and impact of web 2.0 technologies. Through online reputation management, organizations can influence the prevailing perception about them that is within the public domain. There are different types of online reputation threats to an organization. They include those that are merely mildly irritating such as unauthorized use of logos and the spread of rumors9. In more extreme instances, there are those designed to ruin brand reputations while others yet are merely meant to spread negative consumer comments10. Whatever the reputation threat that an organization may be facing, it is prudent and desirable that such a threat be avoided. To achieve this, organizations should engage in environmental scanning which allows them to identify potential reputation threats and to react to them appropriately11. When this is done, it results in less damage to the organization’s reputation. While online reputation management is of critical importance to the survival and prosperity of organizations, it is problematic for many of them. This is particularly due to the nature of social media communication. For starters, with the new set of informational and communication technologies, organizations do not have explicit control of the information available about them. Consequently, communication about brands happens whether or not the firms in question have permitted such communication. A further implication here is that the firms are not necessarily aware of the information that is available about them. Coupled with the problem of lack of control over content is the pervasiveness of social media, as illustrated by the Taco Bell instance. The problem is further exacerbated by the multiplicity of social media sites as well as the diversity of ways in which content can be published. Thus, while content on an organization will initially be published on one site, other sites may serve as amplifiers12increasing the reach of published information. Unlike traditional media, whose reach was largely curtailed by geographical limitations thus confining it to specific geographic jurisdictions, social media, thanks to its internet propelled nature, is a global communication tool. Thus, information posted in one part of the world is quickly relayed to a global audience and can have resounding impacts on an organization’s activities thousands of miles away. The pervasive and intrusive nature of social media, which largely empowers the consumer, paints a grim and damning picture for organizations aspiring to manage their reputation. It would appear that there is little that such organizations can do to shield themselves from negative publicity. However, online reputation management is the avenue through which organizations can defend their image and reputation. Reputation management begins with environmental scanning. Through environmental scanning, organizations can identify threats to their reputation before such threats are deployed13. Environmental scanning places the organization in a proactive position rather than a reactive one. There are certain tools that can be used by organizations for purposes of environmental scanning. One of these tools is online search engines14. Participation in social networking sites is also of importance. For example, Facebook feeds display the discussions of multiple users and can as such be useful in monitoring what the public is saying about a brand or organization. Firms can, therefore, harness this feature to their advantage by monitoring public discussions and thus determining what is the prevailing public perception about their organization. They are then able to respond adequately and rapidly to counter any negative perceptions that may be emerging. An especially interesting theme in terms of reputation management is whether or not organizations should always respond to threats. Veil, Petrun and Robertsnote that no all threats require the same type of response and that some do not even warrant a response15. Indeed, it has been noted that there are different kinds of threats. Organizations may feel compelled to respond to even the slightest of provocations to their reputation. However, Veil, Petrun and Roberts (2012) argue that sometimes, responding to a threat can be more damaging than beneficialto an organization. This is particularly in the case of humor and parody. In the instance studied by Veil, Petrun and Roberts, the National Pork Board responded to what it deemed copyright infringement on its trademark slogan by ThinkGeek with a cease and desist letter. This was after ThinkGeek had used the phrase ‘the new white meat’, in an April Fool’s prank, in which it claimed that unicorn meat was now available for purchase16. In response to the cease and desist letter, ThinkGeek then issued an apology letter on its website, along with the cease and desist. This culminated in the viral spread of the story both on conventional and social media platforms. As a result, the Board became the bane of much public criticism. While the prank had not initially received much public attention, the National Pork Board’s response to what it deemed a reputation threat propelled the story into prominence. Moreover, this had detrimental effects on the Board’s reputation. The real damage to the board’s reputation arose from its response to what was initially merely a prank. Much of the negative publicity was not because of what ThinkGeek had originally published. Rather, it was because of the board’s harsh and overbearing response to what was clearly just a prank. This is especially highlighted by the context surrounding the act. First, the fake product version which ostensibly infringed on the National Pork Board’s trademark was published on April Fool’s day, which is a conventionally accepted as a prank day. Secondly, the product involved was unicorn meat, whereas unicorns are fictional animals, a fact that the National Pork Board would later admit through a statement. Veil, Petrun and Roberts indicate that at the time that the story eventually made news, the primary news item was “the absurdity of the legal responseto an obviously ridiculous April Fool’s Day” (2012, p. 326). This case is an astute indicator of the fact that in some instances, it is more prudent for organizations not to respond. Evidently, not all perceived threats warrant a response from an organization or a firm. Sometimes it is better to let the story quieten down by itself. This is the case where such a story is not likely to result in significant reputation damage to the organization or a brand17. In other cases, organizations may attempt to read and relate to the public mood within the online spectrum. In light of the inappropriateness of the National Pork Board’s response, Veil, Petrun and Roberts provide four recommendations for the purpose of online reputation management. First, they argue that it is important for organizations to consider the perceived threat and determine whether or not a response is necessary before deciding on how to respond. Secondly, in light of the nature of the perceived threat, online parody, they argue that responding is more dangerous than not responding. Thirdly, they also contend that it is vital for organizations to have an online presence so that they keep up to speed with expectations gap. In this regard, they further argue that it is advisable for entities to respond to threats through the same media platform through which they were issued. This is indeed a valid assertion considering the pervasive nature of social media and its ability to reach an exponentially wide audience within a short period. Finally, they recommend that organizations adapt to the internet culture, which is characterized by equal and full participation, which is skewed towards consumer empowerment. Conclusion Social media avails users with an avenue through which they can express their opinions and experiences to a virtually global digital audience. Through social media, customers can express their enthusiasm for a particular brand. In retrospect, the same consumers may also communicate their displeasure with a particular service or brand. This can affect the reputation of the concerned brand or corporation. The negative publicity can have potentially devastating impacts on the firm, and it is for this reason that firms should engage in online reputation management. Online reputation management involves monitoring content by individuals about a corporation and dealing with such content appropriately so as to avert any negative impacts on the firm’s reputation. To achieve effective online reputation management, corporations should first engage in an analysis of the threat to determine whether or not a response is necessary. This analysis should take into consideration the context of the perceived threat. If indeed a response is warranted, then corporations should endeavor to respond on the same media platform that the threat was launched on. Finally, it is essential that corporations engage with their customers on social media so that they can understand the internet culture and to get in touch with the prevailing mood as regards their corporations. Bibliography Veil, S. R., Petrun, E. L., & Roberts, H. A. (2012). Issue management gone awry: When not to respond to an online reputation threat. Corporate Reputation Review, 15(4), 319-332. Read More