Critically evaluates the role and purpose of managing corporate reputation with multiple theory models and practical scenario of managing corporate reputation in Nestle Lanka PLC.
To: CEO Nestle Lanka PLC
From: Marketing Executive for Nestle Lanka PLC
Date: 26th February 2018
Subject: Online and offline factors effect on Managing Corporate Reputation
Corporate Reputation influence by its key stakeholders and in terms of how they perceive it. “Disrupt Asia in 2017” has discussed about the study subject, the opportunities and risks in digital era and how far companies are ready to be competitive in online presence to enhance corporate reputation.
This task critically evaluates the role and purpose of managing corporate reputation with multiple theory models and practical scenario of managing corporate reputation in Nestle Lanka PLC. Further study has given benchmarked examples from industrial and non-industrial to explain how other companies managing corporate reputation and what made them to manage.
It’s necessary to evaluate how proactively Nestle Lanka mange corporate reputation in online and offline context and critically has assessed to understand the areas which Nestle Lanka need to give their attention. Such areas are namely crisis management, communications, identity gaps, online presence which required to provide recommendations to manage and improve each aspect of corporate reputation of the organization.
Recommendations has given to complete the task requirements with benchmarked examples and have linked online and offline context to justified the suitability of concepts and models to be used to improve corporate reputation respective to the organizational context.
The studies of Smart Insight have highlighted marketing trends in digital era for year 2017 such as focus on measuring content marketing ROI, adaptive mobile design approaches, more moment focused communications from Snap (Snap Chat) and have stated 40% businesses use strategies in online context to mitigate business risks and work for opportunities to cope their business performance and image (Smart Insights,2017). As per online reputation management statistics in table 1.1, acknowledge the interconnection between modern communication and Corporate Reputation.
Table 1.1 Online Reputation Management Statistics (Gefen, 2000, p. 733)
McKinnsey,2017 highlights the recent evidence about full blown corporate crises due to the unpreparedness to mitigate crises and globally recall cost accounted for $100 billion yearly. In year 2010 to 2017 the companies listed in Forbes has recognized 80% of top 100 companies meet with crises, further it highlights how companies’ stakeholders will perceive their reputation and possibility of facing bad impacts (2017). The study assesses the practical example with Fombrun theory stated as “Corporate Reputation is the overall assessment about the organization by its stakeholders” (Fombrun,2007) with Balmer’s interpretation, “It’s a perception built overtime upon historical accumulated impacts” (Balmer,1998).
This joint statements discussed identity cues and organizational behaviour impact for corporate reputation when Fill contradict his view from corporate personality, which through identity stakeholders can recognize and identify the organization (Fill,2002).
Chart 1.2 Corporate Reputation Framework (Fombrun, 1996),
Mckinsey elaborates companies which slow and reactive for acquire potential targets, timid in developing relationships with key stakeholders lead for a reputation with process heavy and loaded overhead (2017)Respective to the favourable framework, chart 1.2 (Fombrun, 1996), Nestle Lanka image has developed to be a respectable brand and identity elaborates shared value proposition through their products to deliver stakeholder perceptions but their act for recent food crises ex Milo indicates that they have acted reactively to manage risks than being proactive (Nestle Lanka Website,2016).
Chart 1.3 The Reputation Value Cycle
The Reputation value chain (Chart 1.3) emphasize how financial value and stakeholder support are interrelated (Van Riel & Fombrun, 2007). Accepting the idea Mckinsey discussed invest on corporate reputation consider as acquirers with real mentorship and distinctive capabilities enables them to decrease searching time, complexity of integration to position them in the market place (2017)Nestle Lanka approach is mostly a follower than an acquirer for the investments on corporate reputation and that could be justified by slow for addressing new customer segments such as diabetic patients and slight revenue growth of 5.1% in year 2016 compared to before year (Nestle Lanka Annual Report,2016).
Chart 1.4 Corporate Reputation Chain (Davies etal,2004)
Davies interpretation about managing corporate reputation differ from other authors as it elaborates identity is the internal view and image is the view of external stakeholders but with added emotional and rational links (Davies etal,2004).
Nestle Lanka employees are grateful about the career opportunities and benefits they earn through their career and organization makes them retain by offering opportunities for learning and development with the expectation of better business performance but addressing them in communications is lack and none transparency of information have caused for their poor performance (Nestle Lanka FB Page,2016).
As per the discussed theories from different authors the study concludes corporate personality, identity and image as corporate reputation elements and also to consider corporate identity as the organizational internal self-image to critically assess how Nestle Lanka managing corporate reputation.
Leadership changes in year 2015 highlights changes of communication messages of enhancing lives of Sri Lankan rural communities (www.sundaytimes.lk,2013) and year 2013 it was about financial growth(www.sundaytimes.lk,2013) via offline context but none were about empowering their employees, further elaborates the use of digital activities to influence the dimensions of RepTrack for better performance in Appendix 4.
Benchmark: Kishu Gomes, CEO of Caltex discuss about “Have the Desire to win (2016).
In year 2013, dairy crisis Nestle Lanka focus was arguing for the impacts that can caused for the industry and the organization and in Maggi crises reaction was focused to customers (www.sundaytimes.lk,2013), thus Appendix 3.4 indicates that Nestle Lanka has neglected the importance of communicating to employees, distributors even in crisis communications which justifies the “Average” ratings from respective parties.
Referring to Appendix 5.1 corporate personality audit (Davies et al, 2003), highlights below key points,
Chart 1.5 Highlights of Corporate Personality Audit (Appendix 4.1)
Hence study acknowledge the improvements which required to develop trustworthiness and credibility for stakeholders towards understanding about future growth and to retain for the organization.
Chart 1.6 Corporate Personality (Davies et al, 2003)
Bench Mark: Life at Google, technologies, innovations have shared stories of Google professionals via YouTube to build online corporate reputation (Google YouTube,2013)
Appendix 6, cultural web by Johnson, Scholes & Whittington,2005 illustrated Nestle Lanka story in 2015 about 150 years of service illustrated their commitment to offer more nutrition (Nestle YouTube,2014) and in year 2014 stories were focused to customers and communicated “More Nutrition with Happiness” but none were targeted about their internal resources and capabilities to position their selves as great place to work (Nestle YouTube,2014). Webcast meetings with Nestle South India is functioning as a routine but none other than in practice of using online context for the functioning of cultural web(www.nestle.lk,2013).
1.2.4.a Open vs Closed Cultural Climate
Nestle Lanka cultural climate is an open culture because they provide opportunities to employees to be connected to share their ideas ex: facilitated Chatter, social media platform to connect with Nestle global employees (Annual Report ,2013). However, Appendix 7 pin points the required improvements to make their employees engaging in decision making and to make them share their ideas quicker with the practice of using online context to develop a supportive cultural climate in a work hard culture (Further discussion in Appendix 7, Ideal Communication Climate by Redding, 1972).
Chart 1.7 Cultural Type (Deal and Kennedy)
Benchmarking: Nestle (Mother Company) active via their YouTube channel, they have shared professionals’ experiences and review about reasons to make them exciting to work for Nestle (Nestle YouTube Channel,2016).
Referring to the Appendix 10, AC2ID model by Balmer and Greyser (2002), discuss the possibility of fluxtuations between ideal identity and communication identity due to poor responsiveness for non-controllable word of mouth. Further Appendix 11 highlights how Maggi noodles product verbal symbolism “More taste, More Nutritional Value” in year 2012 changed in year 2015 with added phrase of “More Trust”, to be responsive to the crisis communications (Appendix 11). However, the study acknowledged, the taking time to be responsive is too long which can lead for conflicts about Nestle Lanka corporate image.
Disrupt Asia 2017 conference presented the topic of “Whether the Sri Lanka is ready for the Digital age? and discussed how competitively enterprises can drive via digital context (Disrupt Asia,2017). This directs for the further study of Nestle Lanka communications in the digital era.
Chart 1.8 Corporate Communication Model (Grunig &Hunt ,1984)
Nestle Lanka currently follows asymmetric model strategy for their communications. Communication flow is asymmetric, so that When communities questioned about their food safety testing facilities, they developed advertising campaigns based on nutritional value & trust instead responding to every question from media and communities directed due to Maggi communication crisis. (Appendix 12.3).
Benchmarking: Coca Cola Brand successful storey communicates their focus on two way communications in storytelling and their active online presence (Santore, 2017)
Nestle Lanka Managing Director, Alois Hofbauer,2012 communicated their commitment for empowering Sri Lankan farming communities via newspapers and the same offline channels has been used for the communication of success in exporting coconut milk powder in years later and none management communications were addressed to empower employees (Appendix 12.1). In year 2016, 5000 of coconut hybrid plants donated to improve local farming communities’ wellness and such messages of Organisational communications were not formed to online context other than in the website (Appendix 12.2).
Referring to the Appendix 12.3 Marketing communications, Online presence mostly about product enhanced features, less information about innovations and careers and less shared videos which visually & verbally communicates their slogan “Good Food, Good Life” ex Nescafe Alegria is an innovative coffee machine for a new way of making coffees but the communications were limited to offline context (Sundaytimes.lk,2014).
Chart 1.9 Digital Marketing Redar (Chaffey,2014)
Nestle Lanka in its presence for online communications, further to assess the corporate reputation in online presence, sub tasks elaboration has been conducted.
Chart 1.10 The Readiness Audit (Author,2017)
The assessment of readiness to manage online corporate reputation, indicates “Below the Average” as the results for all the dimensions (Chart 1.9). Mainly due to poor listening and not proactive for trends. Lot of Sri Lankans are diabetic patients and they haven’t communicated their focus on less sugar products (Appendix 17.1)
The Maggi Crisis, 2015 was slow in responsive to the media questions and didn’t address to any contingency plans or didn’t build marketing communications about expertise capability on maintaining food safety (Appendix 14).
In dairy crisis, risk identified by spokesperson, prepared with information, evaluated as a warrant treatment and communicated openly via offline platforms. However, Appendix 14 identified they were inactive to communicate information for both dairy and Maggi crises. Therefore, the study acknowledged the importance of placing a proper crisis management procedure.
Table 1.2 Gap analysis of Crisis Management (Author,2017)
Chart 1.11 The Status of Strategic Objectives (Nestle Lanka Annual Report,2016)
Chart 1.10 indicates the achievements of strategic objectives from year 2013-2016, highlights the need of attention to innovations, technologies and Employee perceptions and communications to manage corporate reputation.
Table 1.3 Summary of Managing Corporate Reputation(Author,2017)
According to AC2ID Model (Appendix 10), gaps identified between communication, Ideal and desired identities. Nestle Lanka has been likely to develop sub identities for product related brands, promotion campaigns etc.
Chart 1.12 The Framework of Managing Organizational Identities (Pratt and Foreman ,2000)
Strategies are recommended as per chart 1.11, illustration of chosen Deletion and Integration strategies relevance to Nestle Lanka.
Chart 1.13 Corporate Communication Mix (Fill,2011)
It is recommended that Nestle Lanka need to focus on below suggestions to improve task 1.2.7, identified corporate communication gaps
|Management Communications||Benchmark||Marketing communications||Benchmark|
Dialog partnership with airtel as a strategic change has been communicated via social media advertisements
|1.Address employees, shareholders and communities||Dialog open access for information (WSO2 Tech Flicks,2014)|
|2.Accessing information via online will save time and motivate employees to perform well since the recent study showed $5000 per worker is wasted annually due to information delays.|
|3.Strengthening connections to promote idea sharing via a mobile App and practice an open door policy|
Table 1.4 Recommendation to improve communications (2016)
- Process of Implementing Corporate Communication
The study recommends Nestle Lanka to implement a standard advertising planning model with corporate storey as the starting point
|Vodafone develop their story with the collaboration of sales workforce and R&D||(SalesforceUK, 2015)|
|Vodafone collect feedback from stakeholders and identify sustainable risks which they try to minimize through informed strategies|
|IPA trainer Paul Burns discuss about developing a creative brief||(2016)|
|Apple “Your Verse” voiceover by Robin Williams convey about different ways of using Ipad||(www.ipa.co.uk,2013)|
Chart 1.14 Seven Step Model (Van Riel & Fombrun,2007)
The study highlights the below suggestions to improve Nestle Lanka Online reputation.
|Online Reputation Audit Highlights||Recommend Tools/Suggestions||Benchmark|
|Use digital channels to be proactive, listening, engaging and security to manage crisis communications (Appendix 17.1)||Use Automated tools such as,|
|Organic and paid exposure need to improve since it has effected for the search engine optimization (Appendix 17.3)|
|Poor visibility due to lack of supportiveness from backlinks to direct for the website|
|Poor Connection of all online and offline touch points|
|Improve Content Process and assets|
|Poor monitoring performance|
Table 1.5 Recommendations to Online Reputation Management (Author,2017)
Image 1. Six Components of a successful Digital Audit (Appendix 16.4)
1.3.3.a Online Outreach Assessment
In order to optimize online presence of Nestle Lanka , the study propose Online Outreach Assessment to utilize as a process for their online reputation managementInvalid source specified.
Chart 1.15 Nestle Lanka Online Outreach Assessment Invalid source specified.
1.3.4.a Strategies to Follow During Crises Communications
Refereeing to Appendix 14, Acknowledging a recommended strategy based on perceptions of the key stakeholders and giving focus to the elements of successful crisis communication can manage corporate reputation during a crisis.
Chart 1.16 Strategies to follow during crises communications (Coombus,2006)
1.3.4.b Elements of Successful Crisis Communications
|Elements of Crisis Communication||Benchmark|
|Prepare a crisis management plan and train both spokesperson & the|
crisis handling team
|SWA shared photos and videos about the crisis of technological failure transparently ,promptly and personalized the response|
|Be quick, accurate and steady|
|Design a website section prior to the crisis and deliver web based response|
Utilize a mass notification System and intranet to reach key stakeholders
|SWA missed Instagram to update information and result was angry comments|
|Review growing of crisis history and prior reputation|
Use a mentioned strategy in task 1.3.3
|Target posted a statement with detailed information about data breach crisis before fully informed officials and led to key problems due to less attention for agenda setting|
|Reduce the likelihood of negative word of mouth|
|Deliver all the gathered ,promised information and inform about recovery efforts||SWA apologised for the inconvenience caused and updated gathered information continuously during the crisis|
|Update about recovery efforts via online and offline platforms||Target offered free data credit monitoring for effected parties|
|Integrate crisis learnings to the organization crisis management system||Target learnings about responding to a crisis with appropriate channels|
Table 1.6 Elements of successful crisis communication(Author,2017)
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