This report contains the substantial management of corporate reputation within Dialog GSM; the following report begins with the argument of the need for active management of reputation by using force field analysis model in the context of Dialog GSM to make strategic decisions.
Further this report advances to map and understand the key forces which impact the corporate reputation of Dialog GSM based on a mini survey conducted (Refer Appendix -B) and understanding the internal and external key forces which impact the corporate reputation. Based on this identification current process of managing reputation in Dialog GSM is analyzed on its effectives and mapped with the new process methodology suggested to actively manage corporate reputation.
Finally this report concludes with making key recommendation to the CEO and potential barriers which organization could face in terms of corporate reputation management.
2.0 Introduction to Managing corporate reputation
Bennett and Rentschler (2003) defined reputation as "a concept related to image, which refers to value judgments among the public about an organization's qualities which is formed over a long period, regarding its consistency, trustworthiness and reliability". Marken (2002) also defined reputation as assets which included quality of products/services, ability to innovate, value for long-term investment, financial stability and ability to attract, develop and retain talent staff. This can be suggested that corporate reputation is aggregate perception of outsiders about the salient characters of an organization (Fombrun et al, 2000), which we need to understand that A company will not have an reputation, where people hold the reputation of companies (Dowling, 1986)
Marken(2004) also addressed that corporate reputation should be build and managed on day to day actions within organization, which will enhance short term & long term performance of organization reputation(Haywood, 2005). As a collective of author's verdicts reputation could be summarized as where reputation are difficult to duplicate as they derive from unique internal features of the firm (Fombrun &Van riel, 2007).This explains how organizations success and sustainability become increasingly dependent on reputation where the lack of systematic attention to corporate reputation will harm organization in long term (Fombrun and Rindova, 1996).
Assessment of Arguments on "for and against actively managing corporate reputation" at Dialog GSMGSM
It is critical in today's dynamic telecommunication (wireless) industry to analyze the importance for and against managing corporate reputation to make strategic decisions. Therefore, for this purpose force impact analysis model is adopted (Refer Figure 1.0). We could use this model to assess the factors identified below based on the information gathered in the dipstick study (Refer Appendix - B)
Figure 1.0 - Force Field Analysis Diagram (Kurt Lewin Model, 1951)
(Evaluated in the scale of 1 - 5)
(1 - Very Low, 2- Low, 3- Medium 4- High, 5- Very High)
Source - Mind tools
The competitive arguments on "For and against managing corporate reputation" recognizes the fact that, in the context of Dialog GSM corporate reputation needs to be actively managed, As a market leader in telecommunication industry in Sri Lanka Dialog GSM should build a strong reputation plan, by adopting an active corporate reputation approach. Therefore by implementing active management of reputation Dialog GSM would gain the following benefits addressed in sub heading- 4.1
Managing Reputation in terms of Dialog GSM
In terms of Dialog GSM to actively managing corporate reputation it needs to understand the other factors which forms and influence the current corporate reputation which is illustrated below
Environmental Forces
Organizational Culture
Corporate Philosophy
Core Value
Corporate Mission
Corporate Personality
Corporate Strategy
Leadership & Vision
Products & Service
Organization Structure
Corporate Identity
Behavior
Management & Employees
Symbolism
Communication
Corporate Personality
Corporate Image
Corporate Reputation
Stake Holders
Interface
Image
Identity
Feedback
Feedback
Figure 2.0 - Corporate Identity and reputation Management process
Source - Nelson & Kanso
Based on the Diagram illustrated above it clearly indicates that environmental forces and organizational culture needs to be well managed where the organization core values, leadership vision and communication needs to be aligned constantly with the factors which influence the corporate reputation of Dialog GSM, which means reputations are also externally perceived, and so are largely outside the direct control of organization (Fombrun, and Shanley, 1990)
As a need for managing reputation Dialog GSM needs to identify and map its key stake holders. Each stakeholder must be mapped in terms of their relevance given to the corporate reputation and finally implement a program to manage reputation as an ongoing basis. Gary Honey (cited in Haywood, 2005) a reputation strategist argues that key factor of managing a good reputation is to close the gap of the stakeholder perception and company performance
We could consider how other organization has performed better by constantly managing their reputation; Organization like virgin has been able to diversify successfully by managing good reputation where CEO Richard Branson himself acts as a key role and key brand for the organization achievements (Business times, 1997)
4.1 Advantages and Disadvantages of Managing Corporate Reputation
Here with would like to address the benefits organization would gain by constantly managing reputation
Dalton & croft (2003) and Larkin (200) addressed the following benefits which organization can gain buy managing reputation, the following
Advantages of Managing Corporate reputation to Dialog GSM
The overall advantages which could be gained by actively managing corporate reputation can be group as following
Financial Performance
Securing profits in the industry and future cash flow
Securing shareholder investment
Create a more conducive environment for investment and access to capital
Enable successful merger and acquisition
Marketing Performance
Attracting new business opportunities and partners
Allowing easy access to new markets and brand extension
Reduce barriers to competition and market development
Secure premium pricing for products and services
Establish trust, good image and credibility with stakeholders
Operational Performance
Human capital - retaining good staff and attracting best employees for the organization
Minimize the threat of increased regulation or litigation
Reduce the potential for crises
Disadvantages of Managing Corporate reputation to Dialog GSM
The disadvantages of actively managing corporate reputation would be
Cost of actively managing corporate reputation is not justifiable on short term, Return on reputation should be at least a 5 year plan to evaluate the outcome, this cannot be justified to the huge amount of money organization is about to invest.
Resource Allocation also cannot be justified in short term, it will be difficult to measure the opportunity cost of the resource which could be allocated to manage reputation
Different factors influencing the corporate reputation could be manipulated,
Authors like Fombrun & Rindova (1997, Cited in Fombrun & Van riel, 2003) highlights that organizations gaining reputational benefits gives high competitive advantage in the market. Therefor Dialog GSM needs to have a balance in managing both the advantages and disadvantages to sustain corporate reputation.
Key forces impacting on corporate reputation
Organizations need to understand the key forces that influence the corporate reputation. They need to understand that they cannot manage reputation instead they could only manage the factors that might influence the organization's reputation (Roger, 2005).Fombrun (1995) ranked corporations reputation based on key forces such as share value in market, organizations ability to recruit and sustain potential staff and command premium price for their products and services as an indication of market leadership. However, Honey (cited in Haywood, 2005) suggests that other indicators such as innovation of technology, customer service and state of the art working environment plays a vital role in an organizations reputation.
Dalton and croft (2003) address that brand values and promises, competitive positioning, CEO's performance should be considered as key factors which build corporate reputation, they further explains key forces for increased focus on reputation would be innovative technology and consumer power through media. Finally suggest an organization should have a sophisticated plan with top to down approach and it should consider the key forces that have an impact over the organization reputation.
However in the context of Dialog GSM the Key forces impacting the corporate reputation would be highlighted as following
Organizational performance - Dialog GSM is highly recognized for its overall organizational performance in the market which includes
Market leadership
Stock market performance
Introducing cutting edge technology to the market ( Dialog GSM was the first vendor to introduce 3G technology in south Asian countries in 2002)
CEO Reputation - Dr.Hans Wijesuriya himself a main contributor to the success of Dialog GSMGSM, his 20years dedicated service with the right vision and leadership has given more reputation to Dialog GSM by the media and other corporates (The Bottom line,2009)
Corporate Social Responsibility - Corporate Responsibility at Dialog GSM is founded key driver for corporate reputation its content management in CSR is a core operation within the management , Activities like mobile alliance against child sexual abuse content, to protect minor consumers, Green tower system has given more reputation to the organization in the past (Dialog GSM Annual sustainability report,2009)
Partnerships - Partnership with key alliance like Vodafone, Virgin Mobile, Huawei Technologies and also key partnership with united nations global awareness program has given signification reputation from stake holders in recent past (Dialog GSM Annual Report,2009)
Working Environment - Creating a good working environment is a key success for Dialog GSM, for example, by creating human-centric business culture within the company to retain and recruit potential staff. Dialog GSM received awards for best HR practices which highlights as indicator for high reputation within internal stakeholders.
Brand itself - Dialog GSM brand itself is a key driver for reputation in the market , Dialog GSM market positioning , emotional appeal of the brand and customer service has given a high reputation among consumers
Figure 3.0 Key Forces of Corporate Reputation of Dialog GSM
The current key forces identified can be group as followed in Table 1.0 identifying what are impacts they have on the stake holder group towards gaining a positive or negative reputation
Key Forces
Stake Holder Group
Positive / Negative Impact on corporate reputation
Organizational Performance
Employee
Organizational performance is vital for key stake holders, Employee see positive value in there employment if the company is stable to face environmental challenges
Share Holders
Shareholders will have positive reputation if the organization is performing higher than expectation ,this positive image will pull more investment for organization
Partners (Suppliers, Distributors, Retailers)
Partners will see value in supplying or reselling Dialog GSM products to consumers when the organization has good reputation and credibility. This will encourage them to push more products to consumers, where they see profitable value in terms of Dialog GSM market performance and reputation
Corporate Social Responsibility
Consumers & pressure groups
Consumers and pressure group will see value in Dialog GSM practicing ethical business, this will help then gain positive reputation and any inappropriate activity has the potential to threaten the reputation as well
Working Environment
Employee
As highlighted above working good working environment and employee management to will reduce staff turnover in organization and could retain skilled staff for better performance
Table 1.0 Key forces impact on Stake holder group
Dialog GSM needs to identify the key forces which are strength and weakness to the organization as well as classify what key forces are controllable and uncontrollable forces and finally address which key forces deliver positive (+) and negative (-) reputation to the organization.
Further elaborating internal factors that affect a company's reputation include its ability to communicate, transparency, human values, treatment of employees, ability to innovate, CEO's reputation, adaptability to change, and handling of social and environmental issues. Among the external forces that impact corporate reputation are customers, print and broadcast media, financial analysts, shareholders, industry analysts, regulators and government (Lines, 2003)
In terms of Key forces classification controllable forces are which can be controlled and managed by the organization (Eg: Products & Services, Financial Performance and Vision & Leadership), uncontrollable key forces are (Eg: Emotional appeal, Media and pressure groups) Which are created by the external environment which is not under the direct control of organization and these forces need to be monitored and managed well to minimize negative impact. By understanding the key forces Dialog GSM needs to maximize positive (+) reputations through controllable key forces and minimize damage (-) from the uncontrollable key forces,
6.0 Justification for establishment and development of reputation management process
In current context of Dialog GSM, there is no corporate reputation management process methodology implemented; however it is evident that certain level of process is followed in corporate communication and CSR activities to manage corporate reputation, which is not sufficient to actively manage reputation. Key decisions with regard to managing corporate reputation are currently done case by case and decision taken in ad-hoc manner in management meetings.
Current activities in CSR are only more focused to manage and build reputation among stake holders and corporate communication is used to build image towards Dialog GSM in most situation. KPI are currently evaluated on the outcome of CSR activities only, where monitoring part of overall reputation management is lacking,
Therefore It is clearly identified current process cannot manage the key forces which was identified in heading 5.0 effectively, with the current system in place it is evident only CSR as a key force could only be managed and other key factors are not managed effectively which can reduce the reputation of Dialog GSM in long term, this could be also seen as a threat to the organisation.
Further when analysing the key information gathered from the mini survey conducted (Refer Appendix-B) it clearly indicates that KPI' for reputation are not achieved without a proper system in place, Where reputation gap could be identified in terms of current stake holder perception vs. Corporate reputation objectives.
Moving forward real life learning also can be gathered to evaluate the importance of a formal process and how organization could fail in managing reputation without implementing a formal process.
Nike and Gap failed in the industry due to not having a proper process in their supply chain led them to a big concern from their stake holders with regard to child labor which had impact on the corporate reputation and finally they had to change its entire supply chain strategy (Firestein, 2006) to overcome the situation. Big organizations like Google and Microsoft had to quit the china market as they didn't have process to conduct external environment assessment on social cultural and political environment which led them to a negative reputation (The telegraph, 2010)
In evaluating overall it's clearly understood that current process in Dialog GSM is inefficient to actively manage corporate reputation and clearly indicates that Dialog GSM to establish and formalizes a pre-defined reputation process methodology to actively manage and monitor corporate reputation.
Recommendation of process
The following process proposed in Figure 4.0 could be adopted by Dialog GSM as a formal process to manage corporate reputation, When adopting a corporate reputation process CEO needs to identify who will be responsible person to manage the corporate reputation process identified in figure 4.0 also CEO needs to plan what are the resources needed (human resource, operational resources and financial resource) and what external resource needs to be outsourced to manage reputation
Creation key performance indicators (KPI) is important to analyze the output of the process management and finally in the review stage corrective actions for improvement could be made to manage reputation
Figure 4.0 Reputation Management Process
The process proposed in Figure 4.0 is a step by step process to manage reputation, Process starts with analyzing the current situation, planning the reputation strategy to achieve the reputation goals of the organization where strategy should be linked with the Dialog GSM corporate plan and organizational activities (Organizational activities could be identified as - CSR activities, HR activities and marketing activities)
Moving forward key strategies to be identified to manage the key forces identified in Appendix B, and implement the process, finally evaluate the achievement against the reputation objectives and make corrective actions. This process will be a continued process justified to actively manage corporate reputation
7.0 Recommendations for Corporate reputation Management
Based on the key findings above, here with I have recommend Dialog GSM to adopt and implement the following processes, system within the organization to manage reputation.
Analyze Stage
Conduct Reputation Audit Process - At this stage it is important to conduct a reputation audit to find out where the organization is positioned towards corporate reputation. Cravens et al. (2003) suggests a formal reputation audit is one way to evaluate how the elements of corporate reputation relate individually and collectively to the overall value of the firm and to its stakeholders. Fombrun (1995) also advocates the performance of a periodic reputational audit in light of the corporate entity's culture and competitive strategy.
Dialog GSM could consult an external auditing firm to conduct annual reputation audit with internal and external stake holders and evaluate the current system in place, the following audit process diagram could be adopted to conduct a reputational audit and outcome of this audit will highlight the gap between the organizational objective of reputation and current situation
Building Reputation Strategy
In this stage Dialog GSM needs to identify the reputation strategy which will help the organization to achieve the overall objective of reputation identified annually, It is recommended Reputational strategies and objectives are integrated the overall annual corporate plan (Refer Diagram 4.0)
Also strategies need to be identified in terms of managing the key forces identified; factors which will help constantly manage key forces should be addressed in the key strategies.
Implementation Stage
Implement Reputation Management System - Since the top management cannot oversee all the actions with regard to reputation it is vital to implement a full-fledged management system which is made up of critical management process (such as strategic planning , financial planning, management by objectives , contingency planning) aimed at decision making. Oriesek(2004) suggested a suitable model for such system which an organization could adopt which is shown in figure
Figure 6.0 - Top management, governance system, corporate behavior and reputation
Source - Oriesek (2004)
Redesign Organizational Structure
Current Structure of Dialog GSM(Refer Diagram 7.0) shows that marketing activities as a whole is overlooked by the CEO who address the stake holders on overall performance of the organization and fully acting as a responsible for shareholders and stake holder activities
Here with I would like to propose the following organizational structure as a recommendation for the organization to give more priority to corporate reputation & marketing management as a whole by recruiting a key person to overlook the corporate marketing and reputational activities,
Figure 7.0 Proposed new hierarchical structure to management corporate reputation
As per the proposed organizational structure CMO along with the CEO will be key responsible people for sustaining and developing the corporate reputation, Also CEO & CMO will be the project initiators, sponsors and key responsible individuals within the organizations to manage reputation and its activities.
Key priorities of a CMO will be to put in a process to achieve the following tasks to sustain corporate reputation
Identify the organizational values and close gaps between articulated and "real", actionable values
Help the organization maintain a perspective on all stakeholders, their relationships and interactions
Build and maintain relationships with key stakeholders to create value
Connect corporate brand to reputation in a way that drives business outcomes
Plan for Corporate reputation risk management plan
Handling Crisis communication
Overview Staff Skill set on marketing and reputation management
Implementing New HR Practices - To support the changes in the organizational reputation management implementing new HR Practices is important to motivate staff to actively manage corporate reputation
Clear guidelines to manage reputation on staff recruitment, HR department should include suitable references in the contract of employment, staff guidelines booklet and induction programs (Haywood, 2005).
Staff training and development program should be organized to motivate staff in actively managing corporate reputation.
Corporate Reputation should be a key indicator added to the balance scorecard of the organization and every staff should be evaluated on a quarterly appraisal with senior management on their overall performance.
Publish monthly newsletter within the organization to staff on its current and future activities to motivate the staff on managing corporate activities
Monitoring and Evaluation Stage
At this stage a "Reputation Dashboard "needs to be implemented along with KPI's to support management meetings and to make key decisions by top management
Reputation Quotient Index (RQI) could be adopted to evaluate the reputation level of the organization
Fombrun and Van Riel (2004) suggest the following as suitable RQI which can use to measure the overall reputation level
Emotional Appeal - Good Feeling about the company
Products and Service - Offering products that are offered with good quality
Human and social capital measurement - employee satisfaction and performance
Customer capital measurement - customer satisfaction and retention level
Structural capital measurement - Stock value and organization efficiency
Balance scorecard approach
Every Departments managers should a effectiveness short term plan for managing reputation and also should be actively supporting the key communication issues in the management meetings
Benchmark reputation level against competitors and industry level reputation to evaluate the current system and process put in place to manage reputation within Dialog GSM
8.1 Potential Barriers for Implementation
Change Management
In terms of implementing corporate reputation management within the organization which will make effective outcome if all the employee's see the value of organizational reputation in the long run, Dialog GSM needs to implement a change management program to educate all the employee's within the organization to make the program effective, The CMO along with the corporate communication manager could hire external reputation consultant who could facilitate such program.
Since the new system is a high level business process reengineering done change management needs to facilitate employees to adopt in a short time. Change management should be a well-planned programme, appointment of a change agent to the organization is important where he/she will identify different level of stake holders who needs to be targeted for adopting managing reputation management for the organization as an ongoing basis, departmental managers should work together with the change agent, The manager has a responsibility to facilitate and enable change, Increasingly the manager's role is to interpret, communicate and enable change in every department . If you force change on people normally problems arise were a change programme must be realistic, achievable and measurable
Kotter (2005) and Dowling (1994) highlighted process to reputation change management which can be summarized as:
Addressing Internal Politics
When conducting a change management there will be a level of resistance from a portion of staff resisting the change, identifying such staff and planning the change management accordingly is important. Politics can play such a leading role in change management that it and resistance to overall change towards reputation management
Few potential reasons for resistance which leads to an internal politics could be
They will not be viewed with the same importance as they were after the change.
The management structure above them will change.
They will have to learn new software and systems.
Work performance goals will be increased
Steps need to be taken in understanding and working with political factors. An organized method for addressing politics will help your change efforts to be more successful. Here are some specific steps that have proven useful in past change programs.
Recognize that individuals and groups act out of self-interest.
Understand the political self-interest of employees and their supervisors through direct observation and casual conversation.
Test your understanding by trying out small suggestions for change. Watch people's reactions. This will indicate where people are "coming from "and help you to comprehend their self-interest.
Financial Implication
Dialog GSM needs to analyze the financial implication which could occur in managing reputation. Larkin (2002) says Investment in reputation management is similar of having an insurance policy which can provide cover for well-regarded companies in times of intense pressure. Return on investment is not highly justifiable to the finance department then again gaining positive reputation through such investment will increase intangible asset value of Dialog GSM and increasing balance sheet value will motivate more shareholder investment in long term,
The current investment will be calculated well to evaluate against a 5 year long term plan to value a ROI, current investment for Dialog GSM would be
Training for staff
Investment for a reputation management system
Hiring of an change management consultant
Training and development on reputation management to staff
Recurring investment will be on annual audit on reputation by a 3rd party audit firm
9.0 Conclusion
In summary it is understood that Dialog GSM being a market leader in telecommunication industry needs to actively manage corporate reputation, Organization needs to reorganize and conduct strategic level planning to sustain and manage corporate reputation, Key forces which impact the corporate reputation needs to be identified and quantified which forces will have positive and negative impact on the organization
As proposed in this report a Full-fledged reputation governance system needs to be implemented which will help top management to make key decisions. The top management should allocate a time period of 6-8 months period for the concepts to be evaluated, reviewed and for final implementation to be successful
Also annual audit on reputation should be conducted which will indicate the current position of corporate reputation and every policy should be reviewed and monitored to check that it reinforces the reputation ambitions
