Management Decision

Corporate brand reputation and brand crisis management

Stephen A. Greyser
Article information:
To cite this document:
Stephen A. Greyser, (2009),"Corporate brand reputation and brand crisis management", Management
Decision, Vol. 47 Iss 4 pp. 590 - 602
Permanent link to this document:
http://dx.doi.org/10.1108/00251740910959431
Downloaded on: 05 February 2015, At: 17:59 (PT)
Downloaded by SELCUK UNIVERSITY At 17:59 05 February 2015 (PT)

References: this document contains references to 25 other documents.

To copy this document: [email protected]
The fulltext of this document has been downloaded 10772 times since 2009*
Users who downloaded this article also downloaded:
Ying Fan, (2005),"Ethical branding and corporate reputation", Corporate Communications: An International
Journal, Vol. 10 Iss 4 pp. 341-350 http://dx.doi.org/10.1108/13563280510630133
Temi Abimbola, Myfanwy Trueman, Oriol Iglesias, Russell Abratt, Nicola Kleyn, (2012),"Corporate identity,
corporate branding and corporate reputations: Reconciliation and integration", European Journal of
Marketing, Vol. 46 Iss 7/8 pp. 1048-1063 http://dx.doi.org/10.1108/03090561211230197
John M.T. Balmer, Avinandan Mukherjee, Stephen A. Greyser, Per Jenster, John M.T. Balmer, Stephen
A. Greyser, (2006),"Corporate marketing: Integrating corporate identity, corporate branding, corporate
communications, corporate image and corporate reputation", European Journal of Marketing, Vol. 40 Iss 7/8
pp. 730-741 http://dx.doi.org/10.1108/03090560610669964

Access to this document was granted through an Emerald subscription provided by 549148 []
For Authors
If you would like to write for this, or any other Emerald publication, then please use our Emerald for
Authors service information about how to choose which publication to write for and submission guidelines
are available for all. Please visit www.emeraldinsight.com/authors for more information.
About Emerald www.emeraldinsight.com
Emerald is a global publisher linking research and practice to the benefit of society. The company
manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as
providing an extensive range of online products and additional customer resources and services.
Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee
on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive
preservation.

*Related content and download information correct at time of download.

 The current issue and full text archive of this journal is available at
www.emeraldinsight.com/0025-1747.htm

MD
47,4 Corporate brand reputation and
brand crisis management
Stephen A. Greyser
590 Harvard Business School, Boston, Massachusetts, USA

Abstract
Purpose – This paper aims to provide insights into the what, why, and how of recognising corporate
brand crisis through a synthesis of organisational experiences with threats to brand reputation, and to
offer guidelines for analytic approaches and suggested organisational actions.
Design/methodology/approach – The approach takes the form of a clinical set of examinations and
Downloaded by SELCUK UNIVERSITY At 17:59 05 February 2015 (PT)

interpretation of a substantial number of recognised corporate brand crisis situations. The analysis and
suggested approaches in the paper have been tested with corporate executives and communications
counselors in classrooms and private applied situations.
Findings – The main points are: reputational trouble can come in many forms, from many sources and
many publics; the most serious situations are those that affect the distinctive attribute/characteristic –
“the essence of the brand” – most closely associated with the brand’s meaning and success. A number of
specific examples illustrate this point. However, past and present corporate behaviour is the most
significant element in a crisis situation. Authenticity plays a key role in building, sustaining, and
defending reputation. From analysis of many corporate brand crisis experiences the paper finds that
forthrightness in communications and substantive credible responses in the form of behaviour are most
likely to restore trust and rescue a brand in crisis. The most important actions, however, are those taken
to build a “reputational reservoir” as a strong foundation for corporate reputation.
Research limitations/implications – Research on reputational troubles is rarely based on
documented information from inside the affected/afflicted organization. Except when companies have
successfully overcome such situations (such as Johnson and Johnson in the Tylenol tragedy), internal
information is typically unavailable. Examination of media coverage and informal discussions with
former executives can be mitigating substitutes.
Practical implications – The principal implications relate to: how an organization can assess the
seriousness of an actual or prospective situation affecting its brand reputation; suggested approaches to
the value and use of corporate communications and the salience of authenticity; and suggested actions in
the face of brand crisis.
Originality/value – The paper provides an analytic approach to assessing the seriousness of threats to
organisational brand reputation. It also examines actual reputational troubles in the context of
corporate-level marketing and corporate communications; and draws on extensive case studies and
seminars in this area with experienced executives.
Keywords Brand management, Trust, Authenticity, Brand reputation
Paper type Research paper

For some years, the what, why, and how of recognising and addressing brand crisis –
particularly corporate/organisational brand crisis – has occupied my research
attention (note to reader: “corporate” and “organisational” are used interchangeably).
Numerous corporate and non-profit entities have provided public clinical experiences
of confronting serious reputational crises. Examples over recent decades include
Exxon (the Valdez oil spill incident), Union Carbide (the Bhopal explosion), Perrier
Management Decision (benzene traces), Tylenol (deaths from tainted pills), the US Catholic Church (priest sex
Vol. 47 No. 4, 2009
pp. 590-602
q Emerald Group Publishing Limited
0025-1747 This article is based on a keynote presentation delivered at the 10th International Corporate
DOI 10.1108/00251740910959431 Identity Group (ICIG) Conference held at Brunel University, London, in November 2007.
 abuse), Martha Stewart OmniMedia (executive misbehaviour), Arthur Andersen Brand reputation
(accounting scandals), the International Olympic Committee (bribery issues), and many
others. All faced threats to their brands from deterioration in consumer and business
and brand crisis
customer approval and from decline in public trust. management
While some were more product brand-rooted (e.g. Tylenol), all found their corporate
brand affected, and efforts to rescue the brand were undertaken at the corporate level
(e.g. Johnson and Johnson for Tylenol, marketed by J&J’s McNeil Laboratories Unit). 591
Thus these incidents provide a rich source of insight into the corporate brand. They
illustrate a key dimension of corporate-level marketing.
“Can we as an institution, have meaningful, positive and profitable bilateral
on-going relationships with customers and other stakeholder groups and
communities?”. That was a central question of an organisation’s corporate-level
marketing orientation posed by John Balmer and myself in our treatment of an
Downloaded by SELCUK UNIVERSITY At 17:59 05 February 2015 (PT)

integrated approach to marketing at the institutional level (Balmer and Greyser, 2006).
We held (among other points) that corporate marketing is indeed a boardroom and
CEO concern. In reflecting on corporate identity and reputation in times of brand crisis,
one recognises the importance of corporate-wide orientation and the responsibility of
the CEO and company-wide managers.

Sources of reputational trouble

Let me offer an anatomy of the kinds of reasons brands can be in reputational crisis,
how to know that the situation is serious, and what steps companies can try to take to
prevent or if necessary to overcome such crises.
Reputational troubles can come in many forms, from a wide variety of causes and
from many publics. Some have been sudden, such as when seven people died in a
single day from tainted Tylenol capsules, when traces of benzene were found in bottles
of Perrier and when an explosion in a Union Carbide facility in India killed many
hundreds of people. Others were the result of problems that festered over longer
periods, such as the priest sex abuse scandal affecting many Catholic archdioceses in
the US, the accounting scandal that eventually ruined the once-respectable accounting
firm of Arthur Andersen, or the bribery scandal over selection of host cities that
tarnished the reputation of the International Olympic Committee. Some of the protest
or concern comes from advocacy groups with a cause, some from disaffected
consumers/customers, some from governmental/regulatory entities, and some from the
general public.
Organisations must recognise the “what” of the issue generating the reputational
threats, as well as “who” the involved public(s) is/are.
Here is a categorisation of different causes of corporate brand crises, with some
examples and some brief explanations:
(1) Product failure – Tylenol, Perrier, Firestone (tires implicated as the cause of
many deaths in car accidents), the Chernobyl nuclear plant disaster, Intel’s
Pentium chip (flawed calculations), Peanut Corp. of America (salmonella).
(2) Social responsibility gap – Nike (non-US labour and questionable working
conditions).
(3) Corporate misbehaviour – Arthur Andersen, Enron, Exxon (oil spill in Alaska),
Merck (alleged suppression of early clinical drug trials of Vioxx), Siemens
(corporate corruption in multinational fraud and bribery), Hewlett-Packard
 MD (Chairman indicted for spying on board members via questionable investigative
means), IOC/SLOC (scandals regarding bid cities).
47,4
(4) Executive misbehaviour – Martha Stewart, Dennis Kozlowski (Tyco).
(5) Poor business results – Polaroid (failure to adapt technologically), Circuit City
(giant retailer which let go many of its most knowledgeable store staff), and
many others particularly in 2008.
592 (6) Spokesperson misbehaviour and controversy – Kobe Bryant (star NBA athlete
and endorser of brands who was accused of rape).
(7) Death of symbol of company – Wendy’s (fast food chain) founder and TV
spokesperson Dave Thomas, the “face of the brand”.
(8) Loss of public support – Louis XVI of France (guillotined and monarchy fell),
Edward VIII of England (forced to abdicate the British throne); both lost their
Downloaded by SELCUK UNIVERSITY At 17:59 05 February 2015 (PT)

ability to be seen by their people as “a symbol of nationhood,” central to the

“monarchic corporate brand” (Balmer et al., 2006).
(9) Controversial ownership – Venezuela and CITGO in the USA (vigorously
anti-US Venezuelan president).

Assessing the seriousness of the situation

What made some of these crises life-threatening to the organisations involved was that
they affected what I term “the essence of the brand”, i.e. the distinctive
attribute/characteristic most closely associated with the brand’s meaning and
success. When this occurs a company’s marketplace position and its brand meaning
are seriously challenged. If the essence of the brand is not central to the situation, the
problem is more likely to be overcome, albeit still troublesome.
Here are four key areas, with some brief comments, that organisations should
examine to analyze an emerging (or emerged) issue that may threaten its brand’s
reputation:
(1) The brand elements:
.
Brand’s marketplace situation, e.g. market share or corporate favourability
(prior to crisis). The weaker the situation, the more dangerous the problem.
. Brand strengths/weaknesses. The more differentiated (vs other entities), the
better it is for the affected company, unless a key differentiation is the
subject at issue (see “integrity of athletic competition” below).
.
Essence of the brand’s meaning (see examples below).
(2) The crisis situation:
.
Seriousness of situation at outset. If the problem prospectively affects many
consumers or some severely, e.g. salmonella in food leading to deaths, the
seriousness is higher.
.
Its threat to brand’s position/meaning (see text examples in “consequences”
below).
(3) Company initiatives:
.
Impact on brand and problem situation of company behaviour/actions,
especially communications; this can be examined at the planning stage as
“likely” impact.
 (4) Results (after initiatives and/or passage of time): Brand reputation
.
Effectiveness of initiatives in terms of recovery/relaunch, restoring brand and brand crisis
meaning, and favourability or market share.
management
The previous list represents a structure for considering the situation, the likely effect of
initiatives under consideration, and later assessment of results.
593
Consequences
What are some illustrations of how brand essence was affected, and the consequences?
My judgements are based on case analyses and numerous discussions of specific
organisational situations in executive program classrooms.
Trust and faith are the essence of the brand of the Catholic Church (and most
religions). If the religion’s adherents (and the broader public) believe that the essence
Downloaded by SELCUK UNIVERSITY At 17:59 05 February 2015 (PT)

has been impaired, trouble results. This can affect attendance at services, fundraising,
and the credibility of the Church’s position on public issues. In my view, the length of
the priest sex abuse issues and efforts to hide them had a negative impact on trust and
faith, and later serious effects on the financial condition of the Church; the essence of
the brand was eroded, but not destroyed.
Integrity is the essence of any accounting firm. In my view, Andersen’s senior
management overlooked the centrality of the “CPA” (Certified Public Accountant)
certification to its client relationships, and was willing to have the firm behave
inappropriately (and illegally).
Efficacy is the essence of any medicinal product such as Tylenol. The swift and
corporately courageous actions of top management at Johnson and Johnson, inspired
by their guiding corporate principles (“the Credo”), to withdraw all Tylenol from the
market was assuring to the public, although market share sank to 0 percent. When the
public quickly came to believe that the cause of the poisoned pills was external to the
company, the opportunity existed to rebuild the brand (including industry-wide
tamper-resistant packaging). It regained most of its market share within a year.
Integrity of athletic competition is the essence of a sport’s brand for the public and
especially for sponsors. The challenge to the Tour de France and European cycling by
bicyclists’ alleged and admitted performance enhancing drug use has harmed fan
interest, reduced sponsor support, and adversely impacted television viewing (and
rights fees). For the IOC, the bid-city bribery scandals did not affect athletic
competition, but adversely affected key business-to-business partners (official
worldwide sponsors) who paid tens of millions of dollars to associate their brands
with “the five rings”. The brand equity issue led to pressure on the IOC to implement
organisational and procedural changes.
Accuracy was a major part of the brand essence of the Intel Pentium chip. When
flawed calculations occurred in certain uses (infrequent but important to a highly
professional market segment), the company failed to take prompt action, and portrayed
what I interpreted to be an attitude of “if we think you (the user) have a problem, we’ll
let you know”. Through internet communication, the affected users became a
community whose voices eventually forced the company to reveal the problem to the
public and (grudgingly, in my opinion) to rectify it for those who wanted remedy.
Fortunately for Intel, its strong R&D continued to develop improved products and it
recovered from the crisis.
When the founder and CEO is the company, troubles can emerge when he or she has
a serious personal problem that raises questions about the very characteristics seen as
 MD important to the identity of the company. Few would doubt that Martha Stewart and
her persona were at the heart of Martha Stewart OmniMedia. She was the founder and
47,4 very visible CEO; her name and personality were the identifiers of her television
program and magazine; her name obviously was on the company’s stock certificates.
She was the corporate brand.
She was accused (2002) and indicted by the US government in 2003 of illegal
594 investing behaviour regarding shares in another company she had invested in. The
effects on her own company were extremely adverse, and swift. Why? Because her
image of wholesomeness, and of reliable advice, was greatly weakened in the wake of
the accusations and her denial of them. Consequently, advertisers dropped out from her
magazine and TV show, and she became the focus of on-going media criticism.
She decided to fight the case (2004) and was found guilty and jailed. During this
period she continued to be in the limelight of often-humorous negative commentary.
Downloaded by SELCUK UNIVERSITY At 17:59 05 February 2015 (PT)

Although she returned from prison (2005) and re-mounted her company’s media
activity, there had been a long period of predictable (in my view) corporate punishment
by consumers and business customers for what was her personal (not corporate)
behaviour. Arguably the company would have benefited from an early apology and
plea for public forgiveness on her part, although we do not know whether she ever
would have wanted to admit the guilt that came in the courtroom.
A related but different situation of the founder/CEO being seen as the company
arose in 2008 and 2009 with Apple and its founder Steve Jobs, widely recognised and
praised as the engine of the company. Although his name was not “on the corporate
door” (unlike the eponymus corporate situation of Martha Stewart), he was closely
identified with Apple’s success, especially its innovations, arguably the essence of the
corporate brand. When rumors of his serious health issues arose (initially down-played
by the company), and later his leave of absence was announced, the company’s share
price suffered. Whether he returns energetically or his senior colleagues can maintain
the stream of product innovations remains an open question in early 2009.
Some instances of highly publicized problems have not been ones that seriously
harmed the organisation, because the essence of the brand was not the focus. One
example is Harvard University. For generations, it has had a motto and logo of
“Veritas” (truth). Although only a careful study of the views of relevant publics –
notably alumni, faculty, and the communities where Harvard is situated – would
empirically confirm (or not) that Veritas is at the heart of “Brand Harvard”, logic points
to it. What could harm the substance and style of “Veritas”? Harvard has suffered from
revelations of questionable real estate acquisition practices, and experienced a
widely-reported situation where its former president lost the confidence of the
University’s core (Arts and Sciences) faculty and resigned. But neither in my opinion
impacted the essence of the brand, even though community relations and some alumni
giving were negatively affected. What would affect brand essence for a university
would be a case of massive falsification of faculty scientific research data (especially on
matters touching public policy), or bribes for faculty appointments or for
pre-determined research findings. These were not the case for Harvard.
A very recent pair of incidents could potentially harm the reputation of the Nobel
Prizes, where fairness in the selection process is arguably key to the essence of the
brand. In 2008, the Nobel Prize committee suffered two meaningful situations of
criticism, which arguably diminished (but has not necessarily disabled) the essence of
its brand. One was the resignation of the permanent secretary of the Swedish
Academy, Horace Engdahl; the Academy is responsible for the Prize in Literature. This
 was in the wake of controversy over Engdahl’s earlier statement that “Europe is still Brand reputation
the center of the literary world” (reported in The New York Times, December 22, 2008),
linked to criticism of the US (“they don’t really participate in the big dialogue of
and brand crisis
literature”). Engdahl remains a board member. Separately, the actions were being management
probed of three Nobel jurors who had accepted expense-paid trips to China to describe
the selection process for Nobel science awards. According to the Swedish
anti-corruption prosecutor, the probe is exploring whether the intent of the meeting 595
in China was to influence the Nobel committee’s decisions. In my view these incidents
are not in the same category as the events besetting the Catholic Church (for example).
However, they illustrate the sensitivity with which entities, whose reputation is at the
heart of the brand, and their leaders, must conduct themselves.

The role of corporate communications and corporate authenticity

Downloaded by SELCUK UNIVERSITY At 17:59 05 February 2015 (PT)

Many observers and public relations/communications counselors consider effective

communication to play the key role in overcoming crises. Certainly, for decades
corporate communications have played a meaningful role in building and supporting an
organisation’s identity and reputation. A meaningful fraction of these communications,
especially in defensive situations such as brand crises, have been characterised –
negatively – as “spin” by critics, the media, and affected publics. In today’s world, of
course, communications importantly include the organisation’s website, where it can tell
its side of the issue and establish a conversation/response capability.
More recently, however, the Arthur Page Society, the professional association of
senior corporate communications executives, has emphasized that Chief
Communications Officers (CCOs) should make it a priority to help build and sustain
their organisations as authentic enterprises.
This APS initiative generated The Authentic Enterprise (2007), defining authentic
as “conforming to fact, and therefore worthy of trust, reliance, or belief” (p. 15). The
publication has led to numerous presentations, conferences, and internal corporate
meetings promoting the concept of authenticity and the CCO’s role to help achieve it
within the organisation.
At least two significant challenges confront efforts to make authenticity an
organisational reality – one situational, one generic. The former arises when corporations
find themselves in defensive situations – , e.g. under attack for corporate or executive
actions/inactions. The latter is the systemic tendency for communications to overstate a
corporation’s (or product/service brand’s) likely performance via exaggeration or
over-promise; this in turn can generate what I have termed a “promise-performance gap”
(Greyser and Diamond, 1974) perceived over time by consumers, business-to-business
customers, and/or other stakeholder groups. Let me note that in some situations, publics
will accept some degree of exaggeration as a normal accompaniment of advertising and
communications. In crisis situations, critics and media tend to examine corporate
response more closely in terms of content and time lag of response.
A highly-visible illustration of a widespread effort to attack an entity’s authenticity
was the series of initiatives against Chinese government policies in conjunction with
the 2008 Olympic Games in Beijing. China had successfully won the bid (in 2001) for
the 2008 games as part of a strategy which in my view (Greyser, 2008b) was intended
to use the “borrowed brand equity” of the most well-known event in sports to help
establish China in the community of “big league” countries via hosting a giant global
gathering to be seen by billions of people worldwide. The initiative combined sports
competition where China would excel, significant long term business development, and
 MD enhancing the national brand image, the latter linked to the instantly recognisable
Olympic “Five rings”. Those who opposed China focused on human rights issues,
47,4 political and religious rights, and media accessibility.
The international trek of the Olympic torch became a magnet for protests in many
countries (and global media coverage). Some political figures chose not to attend the
Opening Ceremonies, the most-seen event in television history. Echoing the mid-1990s
596 Brent Spar episode where Greenpeace greatly embarrassed Shell by “occupying” its
North Sea oil exploration platform, Greyser and Balmer observed; “One can create a
positive platform for oneself (via brand association with the Olympics, in this case) . . .
but others can hijack/usurp it for their own advocacy”.
At the end of the day, what many saw as a public relations victory for the protest
groups – certainly by western standards of impact on public opinion and media – had
limited effect on actual Chinese government policies. It would appear that by the
Downloaded by SELCUK UNIVERSITY At 17:59 05 February 2015 (PT)

standards of China (where these was little media reporting of the protests), government
and institutional behaviour was not responsive to outside public opinion.
In reputation-intensive situations, effective communications typically are based on
a foundation of trust in the communicating entity by the relevant receiving publics.
Trust has become a key dimension in studies of corporate reputation as well as
examination of the public’s and opinion leaders’ attitudes toward business and other
institutions in society. For example, trust in corporations is at the heart of the
decade-old annual Edelman Trust Barometer, most recently reported at the World
Economic Forum in Davos in January 2009. A key finding: trust in business in the US
is now (late 2008) at 38 percent, down from 58 percent, and lower than it was soon after
the Enron collapse (Edelman Trust Barometer, 2009). (These ratings no doubt would
have been even lower if measured after major US financial institutions paid huge
executive bonuses for 2008 when on US government “bailout” support, generating
huge criticism from President Obama and many others.) Low confidence ratings also
were reported for Western European countries and Japan. The most trusted institution
was NGOs.
Separately, a March 2007 presentation at the Institute for Public Relations (USA) by
Dr Brad Rawlins (Brigham Young University) articulated three key components of
trust; an organisation’s integrity (fair and just), goodwill (caring), and competence (the
ability to do what it says) in his study all highly correlated with trust (Institute for
Public Relations, May 31, 2007). And the aforementioned Arthur W. Page Society
(2007) has undertaken a report on Trust in American Business for 2009 publication.
Trust in an organisation, in my view, is a product of its performance, behaviour, and
supportable communications, and is a foundation of authenticity and reputation.
Authenticity also calls for honestly seeing the reality of an organisation from the
inside. This relates to, but is not the same as, the identity of the entity, as the
organisation tries to project it, nor the identity perceived by stakeholders. As Balmer
and Greyser (2002) articulated, organisations have multiple identities. This concept
was cited in a different way by then-Senator Barack Obama in a 2005 speech, quoting
from US president (1861-1865) Abraham Lincoln (also from Illinois): “. . . character is
like a tree and reputation like its shadow. The shadow is what we think of it; the tree is
the real thing” (Boston Globe, January 4, 2009).
Perceived authenticity and a positive reputation go hand in hand, in my view.
However, there are at least four contexts of authenticity, in all of which
communications play a role along with other key dimensions of building,
sustaining, and defending reputation. What connects them is the importance of
 substance: “substance is the foundation of effective communications, supported by Brand reputation
authenticity” (Greyser, Tuck Presentation, May 2008). The four contexts are:
and brand crisis
(1) Talking “authentic”, which is communications.
management
(2) Being authentic, which is based on a corporation’s core values and its track
record, i.e. its behaviour (Urde et al., 2007; Urde, 2008).
(3) Staying authentic, which calls on an organisation’s stewardship of its core
values.
597
(4) Defending authenticity in times of trouble, which draws on what I term an
organisation’s “reputational reservoir” and the trust it has generated over time.
Again, in my view substance – in the form of corporate behaviour past and present –
undergirds a corporation’s ability to talk, be, and stay authentic, in normal as well as
troubled times. Similarly, I believe that the substance of a company’s response is the
Downloaded by SELCUK UNIVERSITY At 17:59 05 February 2015 (PT)

most significant element of a crisis situation. Further, I think an organisation’s

credibility – based on corporate behaviour and the performance of its products and
services – is at the center of protecting a company from the many unanticipated
reputational problems it may confront, especially those not impacting on brand
essence.
Without a platform of evidence-based substantive support, communications by
themselves cannot leap the tall buildings of reputational trouble. With such support,
communications can be effective. Together they build trust for the organisation.
Consider a university with an image of an institution with little meaningful research,
despite a number of actual potentially significant projects and faculty publications. A
communications-based program of managed visibility may help – including press
releases on meaningful publications, interviews with productive faculty, and
substantive research conferences directed to relevant academic audiences. These
signal (but do not and in my view should not say) “we are important to knowledge in
this field”.

Future directions: increased salience of reputation likely

Corporate reputation is likely to become more salient in times ahead, in my view, for
two allied reasons. First is the growth of markets in the world with increasing numbers
of households that have sufficient consumer disposable income to be meaningful
members of a consumer economy. This is turn attracts and supports more
multinational firms (as well as local and regional ones) offering more choices to
consumers via branded products and services. The phenomenon has been experienced
faster in the business-to-business marketplace, more global than its consumer
counterpart. Consumers and business customers want consistent quality and
reliability – hence the importance of brands, and of corporate reputation as signals
(and guarantors). Corporations are finding that consumers, customers, and
stakeholders have elevated expectations about the quality of what they buy and of
corporate behaviour.
This enhances the salience of reputation and of what Balmer terms the “corporate
brand covenant”, i.e. the promise associated with a particular brand to consumers,
business customers and other stakeholders. (That covenant extends beyond products
and services, encompassing an organisation’s role in its community, behaviour to
employees, etc.). Widely perceived failure to meet that promise can become a major
point of trouble for an organisation.
 MD In this context, the likelihood of attacks on an organisation potentially affecting
reputation has increased. This is principally because “anti” communications are far
47,4 easier to mount in a time when the internet not only has accelerated the pace of
communication but also facilitates the organizing of affinity-based communities. Many
stakeholder groups (or self-perceived ones) come to the organisation and/or the public
with issues, e.g. activist public issue groups such as the Ethos Foundation, etc. Media
598 attention is a typical goal, spreading and broadening the reach of the anti-corporate
initiative. Generally recognised as the first significant internet-driven anti-company
effort was the uniting of sophisticated users (with special applications) against Intel’s
Pentium Chip in 1994.

Action in brand reputational crises

What can and should companies/organisations do when threatened by brand crises?
Downloaded by SELCUK UNIVERSITY At 17:59 05 February 2015 (PT)

Where does communications fit in? My principal recommendation relates to situations

of “bad news about the company and the news is really true”.
In the face of crisis, especially when it is rooted in a problem that is or will become
visible, I believe an organisation should admit the truth, even if embarrassing. Also, it
should forthrightly try to address the problem, even if it involves changing corporate
behaviour. And it should support the initiative with credible communications. These
are the best (but still bumpy) roads to possible brand rehabilitation or rescue.
Communications alone cannot do the job.
Substance – i.e. behaviour – is central (e.g. the quick recall of Tylenol from
distribution) to an effective defensive program. An allied communications effort can be
important and helpful. However, the message must avoid serving as a “reminder
campaign”, especially if the underlying problem/allegation is not widely known by
relevant publics.
Credible communications were an issue for Wal-mart in its early 2005 corporate
communications campaign “Wal-Mart is working for everyone”. The message was a
response to critics of its wages and benefits for its workers and its impacts on the
communities where its stores are located. Some observers (including myself) raised the
question of how this message could be effective when the company was being widely
criticised (with extensive media coverage) for reportedly closing a store where
employees were trying to organise a union and when the company was being sued
(again with substantial media coverage) for discrimination against women employees.
In my view the company effort at communications and this specific message/theme
were not likely to be effective.
Sometimes even any communications can be questionable. CITGO found itself in a
reputational brouhaha in the US in late 2006 when Venezuela’s president attacked
President Bush at the UN (CITGO’s parent is a Venezuelan petroleum company). A
major retail gas station operator ended its relationship with CITGO as a supplier,
allegedly connected to the widely publicized political attack. Although only a modest
proportion of Americans were said to know of the ownership linkage, CITGO decided
to undertake a communications campaign, “CITGO sets the record straight”,
emphasizing the company’s corporate good citizenship and role as a major US
employer. Soon thereafter the company returned to its ongoing image-building
campaign. Some experts agreed with the effort; some thought the response
communications should have continued, and some said non-advertising
communications should have been used. However, others argued that the campaign
fueled more public awareness of the underlying problem, and should not have been
 undertaken (New York Times, November 1, 2006). The situation subsequently settled Brand reputation
down as Americans looked at gasoline as a product, rather than at its ownership. and brand crisis
As I have suggested, forthright corporate action often is the most sensible route.
Merck, the third-largest US pharmaceutical manufacturer, suffered an attack on its management
reputation because of its actions regarding Vioxx, a pain medication. It was revealed
that several years before the company withdrew Vioxx (2004), its internal documents
raised questions about risks of strokes and heart attacks associated with the drug. 599
Obviously this was a serious situation for the company’s reputation especially since
the company was defending thousands of lawsuits over injuries and deaths, claimed by
patients or surviving family members to be attributable to the drug. Three years after
the withdrawal, having won many but having lost some of the cases, Merck made a
$4.85 billion settlement on some 45,000 cases (Boston Globe, November 9, 2007) Merck’s
action was expensive, but allowed the firm to move on without a huge residual
Downloaded by SELCUK UNIVERSITY At 17:59 05 February 2015 (PT)

financial cloud. Merck’s behaviour helped address a serious threat.

An unusual corporate action in the face of criticism was taken by the major
accounting firm KPMG in 2005. Under attack by the US Government for the creation
and sale of tax shelters claimed to have cost the Treasury billions of tax dollars, KPMG
admitted “unlawful conduct.” What was said to lie behind the move was the company’s
fear of criminal indictment, which in the case of Arthur Andersen had been a major
step leading to its demise (New York Times, 2005).
If the organisation truly believes that bad news about it is false, there is an
opportunity to correct the misimpression. However, the communications (e.g. corporate
statements) must be supported by evidence and have a clear ring of credibility. When
Audi was confronted with “sudden unintended acceleration” problems, its initial
responses attributed the blame to driver error. This became a matter of considerable
public debate, well covered by media. Later, despite considerable internal engineering
investigation, Audi was generally considered never able to pinpoint the actual cause of
the problem. It took new engineering (e.g. automatic gearshift locks now widely
employed in the industry) and the passage of several years of much lower sales for the
brand (whose name is on all models) to mount a comeback.
Two other situations exist beyond “the bad news is true” and “the bad news is
clearly false”, namely “the good news is true” and “the good news is actually false”. My
advice in the first situation is to feel good and work hard to maintain whatever actions
have yielded what relevant publics consider good news. Communications can be
helpful to the corporate cause if the information is supported by external credible
research, such as “voted best company to work for”. This of course puts the onus on an
organisation to maintain the distinction. In the second case (“good news is actually
false”), a corporation needs to fix the reality quickly (especially if on a relevant
reputational dimension such as a safety issue) and hope it can keep a low profile until
the situation is remedied.
As part of an organisational planning exercise, one might ask these questions about
the organisation’s brand:
(1) What do you think is the essence of your corporate brand’s meaning to
consumers, to the trade, to other key stakeholders?
(2) What could cause your brand to undergo a brand crisis?
(3) How seriously would this affect the brand’s reputation? How? Why?
 MD Lessons learned
From my experiences and study of many crisis situations, let me offer four lessons in
47,4 very abbreviated form:
(1) Let us start with a look in the mirror. Understand your organisation’s identity
as others see it – not what the company says it wants to be. The latter is
important, but perceptions are central. Know the brand’s meaning to key
600 stakeholders, and what could threaten its core. And monitor public approval
and support of the company under different scenarios of trouble – , e.g. a strike,
an environmental problem, etc. In short, understand the organisation’s brand
essence and what could seriously threaten it.
(2) Potential reputational problems are legion. They come in many forms, and from
many publics (stakeholders). But not all affect the essence of the brand. In all
instances, the organisation must understand what and whom it is defending
Downloaded by SELCUK UNIVERSITY At 17:59 05 February 2015 (PT)

against.
(3) In the event of brand reputational crisis, focus on forthrightness in
communications, and on truly substantive credible responses in behaviour.
These are the most likely avenues to rescue a brand in crisis. They may restore
trust, although that is not guaranteed. The most important actions in a
reputational crisis, however, can be the ones taken over time to build a
“reputational reservoir”, a strong foundation for the corporate reputation. In
some crises, a company can draw down on that reservoir.
(4) Remember that because a corporate brand is as wide as the organisation, the
CEO is the ultimate guardian of the corporation’s reputation.

Acknowledgement
The author acknowledges the comments and suggestions of faculty colleagues at the
Harvard Business School and faculty at Brunel University and Bradford University in
the UK, as well as executive participants in the Harvard Business School “Managing
Brand Meaning” seminar, the Harvard Divinity School’s executive program for leaders
of faith-based institutions, the Yale School of Management’s LEAP program, Lund
University’s (Sweden) executive seminar in branding, and participants in International
Corporate Identity Group symposia. In addition, numerous executives in corporate and
nonprofit organisations have contributed examples and observations in private
seminars and projects. Those entities which shared their experiences for attribution in
the author’s published Corporate Communications field-based case studies warrant
special thanks. James Fink and Jeffrey Resnick of Opinion Research Corporation’s
reputation practice group shared data and comments. Mats Urde (Lund University)
offered useful suggestions based on his extensive branding research. Special
appreciation for continuing advice and support is owed to the author’s long-time
research colleague John Balmer (Brunel University), co-editor of this special issue.

References
Arthur W. Page Society (2007), The Authentic Enterprise, monograph, Arthur W. Page Society,
New York City, NY.
Balmer, J.M.T. and Greyser, S.A. (2002), “Managing the multiple identities of the corporation”,
California Management Review, Vol. 44 No. 3, pp. 72-86.
 Balmer, J.M.T. and Greyser, S.A. (2006), “Corporate marketing; integrating corporate identity, Brand reputation
corporate branding, corporate communications, corporate image and corporate
reputation”, European Journal of Marketing, Vol. 40 Nos 7-8, pp. 730-41. and brand crisis
Balmer, J.M.T., Greyser, S.A. and Urde, M. (2006), “The crown as a corporate brand: insights management
from monarchies”, Journal of Brand Management, Vol. 14 Nos 1-2, pp. 137-61.
Boston Globe (2007), “Vioxx deal reportedly offers $4.8b to plaintiffs”, November 9 (via New York
Times News Service), Boston, MA. 601
Edelman Trust Barometer (2009), Trust Barometer (Executive Summary), January 28, and
related coverage in Financial Times (January 27), other media, and Edelman web site.
Greyser, S.A. (1986), Harvard Business School Corporate Communications Published Case
Studies: Audi 5000 and Unintended Acceleration (590-057); The Brent Spar Incident:
“A shell of a mess” (597-013); Exxon: Communications After Valdez (593-014), additional
unpublished presentations based on studies of Arthur Andersen, the Catholic Church in
Downloaded by SELCUK UNIVERSITY At 17:59 05 February 2015 (PT)

the US, Coca-Cola Belgium, Firestone/Ford, Martha Stewart OmniMedia, and Union
Carbide (Bhopal).
Greyser, S.A. (2008a), “Authenticity and reputation”, paper presented at Tuck (Darmouth
College) Corporate Communications Seminar, May.
Greyser, S.A. (2008b), “The branding of China; before and after Beijing”, paper presented at
Harvard, Stanford, and Washington (St Louis) Universities, Spring, and comments on
CCTV (China) following Opening Ceremonies (August 9).
Greyser, S.A. and Diamond, S.L. (1974), “Business is adapting to consumerism”, Harvard
Business Review, Vol. 52 No. 5, pp. 38-58.
Institute for Public Relations (2007), E-mail Report on Trust and Transparency, May 31.
Intel’s Pentium (n.d.), Intel’s Pentium: When the Chips are Down (A) (592-058) and (B)
(595-059); Johnson & Johnson: The Tylenol Tragedy (583-043); NASA After Challenger:
Restoring an Image; The Perrier Recall: A Source of Trouble (590-104) and The Perrier
Relaunch (590-130); “Tarnished rings”: Olympic Games Sponsorship Issues (599-107);
The USAir “Letters to travelers” Campaign (595-105); What is Done is Dun . . . and
Bradstreet (590-103).
New York Times (2005), “KPMG admits unlawful conduct”, New York Times, New York, NY,
June 17.
New York Times (2006), “Play offense, defense or sit out the game”, November 1 (CITGO
advertising).
New York Times (2008), “Swedish academy secretary to step down in June”, New York Times,
New York, NY, December 22.
Urde, M. (2008), “Uncovering the corporate brand’s core values”, paper presented at International
Corporate Identity Group Conference, Brighton, March (subsequently revised for this
special issue).
Urde, M., Greyser, S.A. and Balmer, J.M.T. (2007), “Corporate brands with a heritage”, Journal of
Brand Management, Vol. 15 No. 1, pp. 4-19.

Further reading
Balmer, J.M.T. and Greyser, S.A. (2003), Revealing the Corporation: Perspectives on Identity,
Image, Reputation, Corporate Branding and Corporate-level Marketing, Routledge,
London.
G. Heileman Brewing (n.d.), G. Heileman Brewing (A): Power Failure at PowerMaster (592-017),
G. Heileman Brewing Co. (B): The “Nightline” Decision (592-018), G. Heileman Brewing
Co. (C): Public Controversy Over PowerMaster (592-019).
 MD Greyser, S.A. (1999), “Advancing and enhancing corporate reputation”, Corporate
Communications: An International Journal, Vol. 4 No. 4, pp. 177-81.
47,4 Greyser, S.A. (2005), “Learning from reputational crises”, Harvard Resource, April, p. 3.
Greyser, S.A., Balmer, J.M.T. and Urde, M. (2006), “The monarchy as a corporate brand: some
corporate communications dimensions”, European Journal of Marketing, Vol. 40 Nos 7-8,
pp. 902-8.
602 International Herald Tribune (2007), “Telekom drops out as sponsor”, November 28 (via Reuters).
Sun, N. (2007), PR Clinic for Crisis Management, Sunnybund, Shanghai.
Wall Street Journal (Europe) (2006), “Siemens woes deepen”, November 23, and “German sea of
corruption”, November 24-26.

About the author

Downloaded by SELCUK UNIVERSITY At 17:59 05 February 2015 (PT)

Stephen A. Greyser is Richard P. Chapman Professor (Marketing/Communications) Emeritus,

Harvard Business School, where he specializes in brand marketing, advertising, corporate
communications, the business of sports, and nonprofit management. A graduate of Harvard
College and Harvard Business School, he has been active in research and teaching at HBS since
1958. He was also an editor at the Harvard Business Review and later its Editorial Board
Secretary and Board Chairman. He is responsible for 16 books, numerous journal articles, and
over 300 published HBS case studies; recent publications are Revealing the Corporation with John
Balmer (on identity, reputation, corporate branding, etc.) and co-authored articles on
“Monarchies as corporate brands, and “Heritage brands”. He developed the HBS Corporate
Communications elective, creating over 40 cases and articles on issues management, corporate
sponsorship, relations among business-media-publics, etc. He created and teaches Harvard’s
Business of Sports course, has served on the Selection Committee for the Boston Red Sox Hall of
Fame, and has authored numerous Business of Sports cases and articles, including “Winners and
losers in the Olympics” (2006). His comments on the meaning of the Olympics for China were
seen by millions in China on CCTV after the 2008 Opening Ceremonies.
He is past executive director of the Marketing Science Institute and the charter member of its
Hall of Fame, and also a Fellow of the American Academy of Advertising for career
contributions to the field. He twice was a public member of the National Advertising Review
Board for US advertising self-regulation. He has served on numerous corporate and nonprofit
boards. He was the first academic trustee of the Advertising Research Foundation and the
Advertising Educational Foundation. He is a past national vice chairman of PBS and an overseer
at the Museum of Fine Arts (Boston) and WGBH. He served as Alumni Association president of
Boston Latin School, America’s oldest school (1635) and received its Distinguished Graduate
Award (2005). Known as “the Cal Ripken of HBS”, in almost 40 years of teaching, he has never
missed a class. He can be contacted at: [email protected]

To purchase reprints of this article please e-mail: [email protected]

Or visit our web site for further details: www.emeraldinsight.com/reprints
 This article has been cited by:

1. Levente Szász, Krisztina Demeter. 2014. How do companies lose orders? A multi-country study of internal
inconsistency in operations strategies. Operations Management Research 7, 99-116. [CrossRef]
2. Zalfa Laili Hamzah, Sharifah Faridah Syed Alwi, Md Nor Othman. 2014. Designing corporate brand
experience in an online context: A qualitative insight. Journal of Business Research 67, 2299-2310.
[CrossRef]
3. Raza Ali, Richard Lynch, T.C. Melewar, Zhongqi Jin. 2014. The moderating influences on the
relationship of corporate reputation with its antecedents and consequences: A meta-analytic review.
Journal of Business Research . [CrossRef]
4. Larissa Ott, Petra Theunissen. 2014. Reputations at risk: Engagement during social media crises. Public
Relations Review . [CrossRef]
5. John A. Parnell. 2014. Crisis Management and Strategic Orientation in Small and Medium-Sized
Downloaded by SELCUK UNIVERSITY At 17:59 05 February 2015 (PT)

Enterprises (SMEs) in Peru, Mexico and the United States. Journal of Contingencies and Crisis Management
n/a-n/a. [CrossRef]
6. Mats Urde. 2013. The corporate brand identity matrix. Journal of Brand Management 20:9, 742-761.
[CrossRef]
7. Professor John M.T. Balmer, Anna Blombäck, Christina Scandelius. 2013. Corporate heritage in CSR
communication: a means to responsible brand image?. Corporate Communications: An International
Journal 18:3, 362-382. [Abstract] [Full Text] [PDF]
8. Liu He, Chun Xiao, Wei Xu, Hai-Ying Wei, Qing He, Rajeev Batra. 2013. The Application of Analytic
Network Process in Brand Crisis Management: A Case of the Chery and Geely of China. Journal of Applied
Sciences 13:8, 1206-1212. [CrossRef]
9. Johan Gromark, Frans Melin. 2013. From market orientation to brand orientation in the public sector.
Journal of Marketing Management 29:9-10, 1099-1123. [CrossRef]
10. Jesus Cambra-Fierro, Alan Wilson, Yolanda Polo-Redondo, Ana Fuster-Mur, Maria Eugenia Lopez-
Perez. 2013. When do firms implement corporate social responsibility? A study of the Spanish
construction and real-estate sector. Journal of Management & Organization 19:02, 150-166. [CrossRef]
11. Paul Custance, Keith Walley, Dongni Jiang. 2012. Crisis brand management in emerging markets.
Marketing Intelligence & Planning 30:1, 18-32. [Abstract] [Full Text] [PDF]
12. Melodena Stephens Balakrishnan. 2011. Protecting from brand burn during times of crisis. Management
Research Review 34:12, 1309-1334. [Abstract] [Full Text] [PDF]
13. John M.T. Balmer, Shaun M. Powell, Christina Öberg, Christina Grundström, Petter Jönsson. 2011.
Acquisitions and network identity change. European Journal of Marketing 45:9/10, 1470-1500. [Abstract]
[Full Text] [PDF]
14. John M. T. Balmer, Shaun M. Powell, Stephen A. Greyser. 2011. Explicating Ethical Corporate
Marketing. Insights from the BP Deepwater Horizon Catastrophe: The Ethical Brand that Exploded and
then Imploded. Journal of Business Ethics 102:1, 1-14. [CrossRef]
15. John M T Balmer. 2010. Explicating corporate brands and their management: Reflections and directions
from 1995. Journal of Brand Management 18:3, 180-196. [CrossRef]
16. Temi Abimbola, Ming Lim, Sascha Raithel, Petra Wilczynski, Matthias P. Schloderer, Manfred
Schwaiger. 2010. The value‐relevance of corporate reputation during the financial crisis. Journal of Product
& Brand Management 19:6, 389-400. [Abstract] [Full Text] [PDF]
 17. John M.T. Balmer, Shaun M. Powell, Wim Elving, Lars Silver. 2009. Perspectives on organisational
change. Corporate Communications: An International Journal 14:4, 369-388. [Abstract] [Full Text] [PDF]
18. John M. T. Balmer, Helen Stuart, Stephen A. Greyser. 2009. Aligning Identity and Strategy: Corporate
Branding at British Airways in the Late 20th Century. California Management Review 51:3, 6-23.
[CrossRef]
Downloaded by SELCUK UNIVERSITY At 17:59 05 February 2015 (PT)