« Back to Home Page

CSR May Help Build a Good Reputation, But Can’t Salvage a Brutal One

Leon Kaye | Monday June 28th, 2010 | 2 Comments

University of Florida Professor Mary Ann Ferguson recently completed a study concluding that corporate social responsibility (CSR) programs can only serve as part of a company’s effort to build a good reputation—and in turn only reap cynicism when a firm already has a poor reputation among the public.

BP’s public relations team may want to read this study.  Personally, I cannot help but snicker when MSNBC broadcasts in the background in my home office, as all of its talking heads from Chris Matthews to Rachel Maddow yammer on about BP, while during commercial breaks—BP runs commercials touting its renewable energy efforts!

Ferguson’s research team asked over 750 people to look at companies’ CSR programs and report two conclusions:  whether the type of CSR program affected their feeling toward the company, and whether the company’s overall reputation affected their feeling.

Companies generally run different genres of CSR programs, which Ferguson classifies as “low-fit” and “high-fit.” High-fit programs relate closely to a company’s core business and competence.  Low-fit programs would be more tangential and removed from a company’s expertise.  For example, Timberland’s programs improving the conditions for its workers throughout its supply chain would be high-fit; scholarship or community programs would be low-fit.

The results:  high-fit programs only work when a company and its industry already enjoy a good reputation.  I would say that HP overall has a solid reputation in the marketplace, so any effort to power its data centers with renewable energy would help the iconic Silicon Valley firm’s credentials.  Once a company’s image is sullied, however, any CSR effort started by such a company fails—especially if that company is in an industry that consistently has a poor reputation.

So for BP to run its touchy-feely advertisements on MBNBC may do worse than make me snicker,—and snickering would be putting it mildly for many folks out there appalled by the bungling and gaffes that have spouted during the two-month ordeal.

Ferguson concludes that for any company, generating any publicity smacking of self-interest or coming across as papering over a massive problem will fail.  BP’s executive team, therefore, would be wise to forget about any slick, expensive PR campaign similar to the one it ran for much of the past decade.  Forget words—only action can turn around BP’s reputation, and we have seen how it has flailed the past two months.

For those of us old enough to remember the cyanide poisonings that almost destroyed the Tylenol brand in 1982, Johnson & Johnson’s reaction not only saved the company, but probably an industry.  As the result of those horrible tragedies in Chicago, over-the-counter medicines are now mega-sealed; and there’s a reason why Tylenol and other medications are no longer in capsule form.  Johnson & Johnson’s response helped salvage a company’s reputation, and to this day it often makes the surveys listing the most admired companies in the United States.

Decades later, BP’s response has been about as horrid as the Deepwater Horizon catastrophe.  So they can forget about a revamped PDF or an interactive CSR report—they need to plug that gash and start making real amends to the ‘small people’ in the Gulf region.


▼▼▼      2 Comments     ▼▼▼

Newsletter Signup
  • http://www.youtube.com/watch?v=r8ypWivQO18 Mouli Cohen

    I think CSR's are doing a great job to do the reputation management. Somehow along the way, they should hire people that will take care of the damage. Afterall, competition is stiff among businesses.

  • Leon

    Thanks for the comment. It's a long process, but companies are wise to develop such a strategy before their reputation tanks. Thanks for reading!