Analysis of the Federation Internationale de Football Association Reputation Crisis - Case Study Example

REPUTATION MANAGEMENT PLAN Reputation management plan Customer Inserts His/her Name Customer Inserts Grade Course Customer Inserts Tutor’s Name 13, 10, 2015 Table of Content Table of Content ii Introduction 1 Analysis of FIFA reputation crisis 1 a)Genesis of the reputation crisis 1 b)The effect of the reputation risk to FIFA sponsors 2 c)Danger of FIFA and sponsors losing brand value 2 Proposed FIFA Reputation Management Plan 3 Plan objectives 3 FIFA Reputation Management Roadmap 3 I.Prevention 5 II.Monitoring 8 III.Analysis 9 IV.Mitigation 11 Recommendations 11 References 13 Introduction The Fédération Internationale de Football Association (FIFA) has dominated global news in recent times over claims of corruption. However, this criticism has been ongoing for many years and only gained momentum recently (Pielke 2013). Consequently, FIFA has witnessed unprecedented damage to its image and reputation. The aim of this consultancy report is to provide a comprehensive reputation management plan including situation analysis to the FIFA chairman of directors. The report will also make strategic and tactical recommendations on reputation management in the wake of damages occasioned by the recent corruption allegations. Analysis of FIFA reputation crisis a) Genesis of the reputation crisis The current events are a culmination of an extended onslaught on FIFA to enhance accountability and transparency in the way it handles its affairs. Many critics have accused the organization and its main sponsors of carrying out its affair in secrecy and condoning corruption. Despite these concerns, the organization has done very little to manage its dented reputation. However, FIFA may be forced to move in quickly and restore the confidence of its stakeholders and the public in the wake of recent scandals facing top management officials (Coombs 2015). The recent arrest of members of FIFA management committee in Swaziland aggravated an already bad situation. The turning point of the reputation crisis at FIFA was in May 2015 when seven high ranking officials were arrested in Switzerland by Swiss and U.S. authorities while attending a medical conference. There have been persistent calls for complete overhaul of the FIFA management and resignation of its president due to allegations of engaging in corruption. FIFA reputation is at an all-time low because of current investigations on its officials by the Swiss and U.S. authorities. The investigations are centered on the suspect awarding of the World Cups that will be staged in Russia and Qatar in the next three and seven years respectively (Dipietro 2015). b) The effect of the reputation risk to FIFA sponsors According to Millis, there is a high probability that top brands that sponsor FIFA could suffer massive losses amounting to billions of dollars if they continue their association with the corruption scandal-hit world footballing body. The beverage giant Coca-Cola and Adidas (a major sportswear firm based in Germany) are some of the major entities likely to suffer massive brand damage related loses as their brands have long been associated with FIFA (Millis 2015). FIFA sponsors have been accused of turning a blind eye and adopting a hands-off approach to problems facing the organization. Considering the advertising value that can be achieved during major sporting events organized by FIFA, sponsors need to ensure that there is responsible and sustainable management of such events. Critics argue that that sponsors as well as FIFA are abdicating their duties through outsourcing and dividing their responsibility for the sporting event. Consequently, checks and balances have been removed and stakeholders are happy to make profits but no one is held accountable (Severin 2015). c) Danger of FIFA and sponsors losing brand value The current crisis has the potential to devalue the brands of FIFA and its sponsors resulting loss of billions in image rights. Brand value is intangible and dependent on reputation and continuing customer goodwill. Owing to the current corruption allegations at FIFA, the goodwill is receding. Consequently, there is need to institute immediate intervention measures such as establishing a comprehensive reputation management plan, overhaul FIFA management committee and revise communication plans among other measures. Proposed FIFA Reputation Management Plan Plan objectives FIFA needs to institute a clear strategy that will enhance the understanding and value the components of reputation, including integrity, gov­ernance, and transparency. In addition, it should establish a formal mechanism to allow for periodic monitoring, measurement and management of its reputation. In this regard, the FIFA reputation management plan has the following aims; to identify and categorize the various components of its reputation, to establish clear mechanisms for monitoring and evaluation of the reputation risks, and to institute strategies to mitigate reputation threats. FIFA Reputation Management Roadmap The major aim of the FIFA reputation management plan is to support the participatory development of strategies and policies that will enhance good reputation. The plan will institute long-term strategies aimed at reputation risk management and prevention. Consequently, FIFA will be well prepared to tackle emergent risks and minimize the damages occasioned by scandals like recent allegation of corruption and arrest of its top ranking officials. The basic constituents of an efficient FIFA reputation management plan are exemplified in the figure below: I. Prevention Within prevention, the key elements are as discussed below:- a) Formation of FIFA Reputation Management Team A cross-departmental FIFA reputation management team should be set up. The membership of the proposed team should be representative of the major stakeholders. FIFA should ensure that each of its department including marketing, customer care and human resources are equitably represented in the team. This will not only promote teamwork and ownership of the risk management, but will also foster cohesion and interpersonal relationships among the team members. In addition, each department will feel that it helped in development of the plan and so support its implementation. Consequently, the participatory approach will enhance acceptance of the proposed FIFA reputation management strategies among the key stakeholders. Like majority of corporate brands, FIFA brand is represented across various external stakeholder information entry points like televised advertising, print media, customer service department, and retail outlets among others. These information entry points offer FIFA stakeholders with opportunities to gather information necessary for advancement or attack its reputation as they typically cover extensive areas (Prema 2000). In order to enhance the effectiveness of the reputation management team, FIFA must ensure that team members are representative of a diversity of roles within the organization. The team should have an overall leader tasked with overseeing the daily functions and management of the risk management process. In addition, the team should have a person responsible for each function within the plan. These functional leaders will be in charge of various groups that make up the entire team including marketing department, human resource, customer care, brand promotion and sponsors. The diversity of the team and unique contribution of each functional group will enhance the success of the FIFA reputation management plan. Therefore, all the groups represented in the team have a crucial role that will ensure protection of the FIFA brand as well as conformity with established standards of governance within corporate entities. The diversity in team membership will help in implementing strategies necessary for protection of the protection of the FIFA brand as well as support capacity building of the team members through trainings. The team leaders will also contribute in development and implementation of departmental policies that offer favorable environment for the implementation of the reputation management strategies. The team executive will spearhead resource mobilization efforts in addition to cultivating a culture that is appreciative of the FIFA brand value and the reputation risks that threaten the brand. Finally, the team leader will assemble the resources necessary for safeguarding the brand on a daily basis is as well as institute proper procedures for addressing emergent issues (Prema 2000). b) Developing policies and procedures FIFA may be able to lessen damage to its reputation if it puts in place a clear procedure for responding to reputation threats. In addition, a clear threat response plan has potential to lessen crucial time used by employees in trying to refute claims and safeguard reputation. Clear response procedures provide opportunities to prepare media and public response briefings in advance hence drastically reducing response time. Such a plan is also crucial as it helps the employees to make structured responses and protect them against divulging sensitive organizational information. Therefore, chances of an employee contravening disclosure rules are greatly reduced since employees have better understanding of response rules and are able to quickly notice violation. For example, FIFA may establish a communicated and enforced written corporate disclosure policy, a policy on crisis communication and reporting among others. However, formation of such strategies is time consuming but the reduction of the response time makes the effort worthwhile. Reduced response time is important in freeing time for other fundamental FIFA objectives such organizational development (Argenti & Druckenmiller 2004). c) Communication and training For effective implementation and success of the reputation management plan, it is important that all the stakeholders and partners have clear understanding of the issues. Therefore, it is prudent to put in place proper communication strategies and institute staff training programs. This will ensure that the people involved have common understanding of issues and so enhance corroboration in risk mitigation. Generally, reputation threats are so diverse that it necessitates marshalling of collective efforts in identification and monitoring of the threats. In addition, development of diverse risk mitigation strategies require the assemblage of diverse people endowed with unique skills and informed on modalities of tackling emergent risks. Therefore, it is crucial to involve all the necessary stakeholders through establishment of open communication channels. Finally, periodic update of the plan implementation to the stakeholders is only possible when a clear communication plan is in place (Argenti & Druckenmiller 2004). d) Progress appraisal against objectives For FIFA to succeed in reputation risk management, it is important to have clear and SMART objectives. However, the objectives may be quantitative such as reduction in the quantity of scandals or more qualitative in nature. The objectives may also be tailored to address either internal or external goals, the latter being of more concern and significance to FIFA. In order to enhance success and monitor progress, the FIFA reputation management team must prioritize the selection of clear objectives (Argenti & Druckenmiller 2004). II. Monitoring Periodic assessment of the reputation management plan is an integral part of implementation necessary for FIFA to realize its objectives. Monitoring helps in early detection of any problems thus assist in timely roll out of corrective measures. Monitoring can be done though an internal audit team or FIFA may employ the services of external experts to monitor the plan implantation. Monitoring will help in checking whether the set objectives are being realized as planned. The aim is to ensure that if a given strategy is working, then it is strengthened. A plan implementation strategy found to be ineffective after monitoring may need to be restructured on be completely overhauled (Prema 2000). III. Analysis FIFA needs to institute procedures that will help in decision making in prioritization of needs. The organization receives a large volume of information and it might be challenging to select and address a multitude of concerns without proper analysis of information gathered. Most organizations often handle reputation management in diverse manners in various sections of the organization. Therefore, it is important to analyze the generated information in order to ensure that priority is given to urgent matters and correction measures are implemented in a more a more coordinated manner. A proposed FIFA multidepartment analysis is illustrated in the figure 2 below. Figure 2: Analysis of FIFA reputation risks The FIFA reputation management team should be tasked with coordination of all efforts aimed at safeguarding the brand reputation. Therefore, the team should complement the work of the chief officer in charge of reputation. Finally, analysis is important as it filters information hence promote a decision making process that is based on accurate and relevant information (Prema 2000). IV. Mitigation Approaches to risk mitigation will vary depending on the nature of threat observed. Generally, FIFA risk mitigation measures should be rolled out on a three pronged approach; those aimed at mitigating threats to its clients, those aimed at mitigating threat to its assets and those aimed at mitigating reputation threats associated with public and stakeholder perception. These threat mitigation measures may need to have a particular focus on brand abuse. This will help in lessening incidences of infringement and bland violation as well as spell out apt response criteria in case of attack on reputation. In addition, FIFA ought to institute prearranged mitigation measures to counter nay attacks on its reputation through engaging a vibrant public relations department and marketing among other strategies For FIFA to effectively mitigate reputation risks, it should enhance threat detection techniques through use of a proper monitoring structure. It should also ensure that the relevant stakeholders are informed of the risks in a timely manner so as to sanction mitigation measures that will quickly resolve the reputation threats (Prema 2000). Recommendations 1. Formation of a FIFA reputation management team with members drawn from all key external stakeholders and internal FIFA departments. 2. Drawing of workable policies that in conformity with FIFA reputation risk management tactics. 3. Development of comprehensive risk assessment tools and procedures necessary for timely threat analysis and establishment of suitable mitigation plan. References Argenti, PA & Druckenmiller, B 2004, ‘Reputation and the corporate brand’, Corporate Reputation Review, vol.6, no.4, pp. 368-374. Coombs, WT 2015, Why FIFA was so slow to Adopt an Effective Crisis Response. Available from< http://www.instituteforpr.org/fifa-slow-adopt-effective-crisis-response/>. (10 October 2015). Dipietro, B 2015, ‘Crisis of the Week: FIFA Responds to a Scandal’, The Wall Street Journal: Blog, Available from< http://blogs.wsj.com/riskandcompliance/2015/06/08/crisis-of-the-week-fifa-responds-to-a-scandal/>. (10 October 2015). Millis, J 2015, ‘Fifa in Crisis: Tarnished footballing body could hit sponsoring brands for billions’, International Business Times 28 May, Available from (10 October 2015). Pielke, R 2013, ‘How can FIFA be held accountable?’ Sport Management Review ,vol.16, pp. 255–267. Prema, N 2000, ‘Corporate reputation management:" CRM" with a strategic twist?’, Public Relations Quarterly, vol.45, no.2, pp. 35-42. Severin, P 2015, ‘FIFA’s corruption scandal holds reputation risk for sponsors’, Asset Management: Blog. Available from . (10 October 2015). Read More