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January 6, 2015

The Top 10 Reputation Crises of 2014

Simon Wadsworth discusses reputation management crises affecting high profile organisations during 2014.

  1. Zara releases an offending t-shirt for kids 

Zara, a Spanish clothing firm, saw its reputation damaged when it released a t-shirt for children, which was deemed offensive because it had connotations of prisoner of war attire. The t-shirt, supposedly inspired by the American ‘wild west’, featured a large gold star, similar to the Star of David.

Reaction: Zara responded to the outcry immediately, and withdrew the controversial item from its stores. The clothing store posted the following apology via their social media networks: “We honestly apologise, it was inspired by the sheriff’s stars from the Classic Western films and is no longer in our stores.” 

  1. Tesco: A Serious Fraud Office investigation 

Tesco, listed as one of the UK’s most admired companies, has in recent years been struck by a series of controversies that have impacted on the company’s reputation. The food retailer has been hit by the horse-meat scandal, profit warnings, a £263m black hole in its profits, and most recently a Serious Fraud Office investigation into accounting practices at the company.

Reaction: According to Management Today, Tesco has lost around £13.5bn of reputational value since the peak at the end of 2011. After the disclosure of the black hole in its profits, the company suffered the biggest crisis in its history apparently. An analyst at Shore Capital, Clive Black, commented: “We can never recall a period so damaging to the reputation of the company.”

  1. Lego partnership with Shell Oil Causes Greenpeace to react

When the Lego Group decided to create a partnership deal with Shell Oil, the group was faced with a reputation crisis on an international scale. Greenpeace made claims that the deal was an attempt to influence the way children thought about Shell Oil. The non-governmental environmental organisation also maintained that the partnership was a way for Shell Oil to improve the perception of its controversial arctic drilling plans. Greenpeace released a video online in protest – this parodied Lego, and succeeded in picking up millions of views on YouTube.

Reaction: Lego reacted really quickly to the situation, and made efforts to separate itself from the arctic drilling controversy. The company posted a tweet stating: “We are determined to leave a positive impact on our society and children. We’re sad when the Lego brand is used as a tool in any dispute.” However, despite Lego’s quick response, the situation has caused damage to the brand’s reputation – both in the short and long term. 

  1. US Airways posts porn in response to a customer comment 

When the US Airways mistakenly posted a pornographic image on its official Twitter handle, the company was faced with serious reputational damage. The incident occurred when the company tweeted a reply to a customer, and by accident attached a pornographic image to the message. The action attracted tweeters from around the world, who reacted with a series of sarcastic tweets and parodies.

Reaction: US Airways was alerted to the inappropriate tweet within the hour. They made a public apology, stating: “We apologise for an inappropriate image recently shared as a link in one of our responses. We’ve removed the tweet and are investigating.” 

  1. Greggs’ Offending Logo 

Greggs, one of Britain’s largest bakery chains, faced potential damage to their reputation after suffering defamation online. The company’s logo was altered online to read: ‘Greggs: Providing s*** to scum for over 70 years.’ Greggs’ Wikipedia page was also targeted – the offending logo was published on Uncyclopedia – a site known as a satirical take of Wikipedia.

Reaction: Greggs succeeded in taking down the offending logo immediately, and subsequently managed to protect its online profile from further reputational damage. Greggs, whose actual logo is ‘Always fresh. Always tasty’, posted on its social media networks, that the company was aware of the change and had contacted Google about the incident. 

  1. DHL uses Formula One Bianchi crash for social media ‘likes’ 

DHL, the German logistics company, and an official partner of Formula One, was criticised on social media for attempting to profit from Jules Bianchi’s crash into a recovery vehicle at the Japanese Grand Prix. DHL posted photos of the Bianchi on their Facebook page along with the words, “Ghastly accident in Japan. Jules Bianchi is fighting for his life. By clicking ‘like’ on this occasion, you’ll be sending Jules your best wishes for a speedy recovery.”

Reaction: A spokesman on behalf of DHL said: “Based on feedback we’ve received, we have removed the post and apologise for any offence caused. To clarify, we were not asking people to like our page (only the photo), and there was no aim of promoting the site or DHL. This was meant as a gesture of support for Jules Bianchi, and is based on our longstanding involvement in the F1 world. We accept that, taken out of context, it could be interpreted as inappropriate or cynical, but this was definitely not the intention of our social media team.” Despite the apology, the original post went viral on Twitter and Facebook, causing Formula One fans to react angrily towards DHL, and causing damage to the logistics firm’s reputation online.

  1. Microsoft CEO Nadella caused crisis communications

Microsoft’s CEO, Satya Nadella, caused a stir online when speaking at the Grace Hopper Celebration of Women in Computing. Commenting that women who do not request bigger salaries would be rewarded in the long run when their good work was recognised, he faced a barrage of comments on social media. Even before he had reached the end of his speech Twitter was flooded with negative hashtags and comments. Nadella’s comments succeeded in having a negative impact on the technology industry as a whole, which suffered the perception that women are treated unequally to male colleagues.

Reaction: Nadella and Microsoft reacted the next day, once they realised the full extent of what had happened. Nadella admitted that he was “completely wrong”, saying: “I answered that question completely wrong. Without a doubt I wholeheartedly support programs at Microsoft and in the industry that bring more women into technology and close the pay gap.” He continued: “I believe men and women should get equal pay for equal work. And when it comes to career advice on getting a raise when you think it’s deserved, Maria’s advice was the right advice. If you think you deserve a raise, you should just ask.”

Although slightly delayed, Nadella’s response worked to his advantage – he apologised to females but also to all of Microsoft’s employees. He managed to address the problem and reach out to the key audience, and by doing so, helped to protect the company’s reputation and his own.

  1. Apple ‘s reputation suffers over ‘bendgate’

When ‘bendgate’ hit the headlines, Apple was confronted by embarrassing online commentary by tweeters and competitor companies. Bendgate – a fast-spreading rumour that it was possible to bend an iPhone6 Plus just with your hands – the story led to comments that it was not advisable to combine the oversized phone with tight jeans. For Apple, the story was a disaster – especially since it claimed the comparable sized Samsung Galaxy Note 3 managed to retain its size after a similar test.

Reaction: Apple failed to manage the problem effectively, and consequently resulted in a drop in sales. Faced with a crisis, Apple adopted a PR strategy of non-responsiveness. Maybe, on this occasion Apple believed their loyal customer base would support every new release without any hesitation.

  1. MasterCard gets a #PricelessSurprise campaign 

A PR agency representing MasterCard – a sponsor of British Airways, faced reputational damage when it was criticised for asking journalists to guarantee coverage of their client in order to be provided with a press pass to the Brit Awards. The PR agency even went as far as to create Twitter messages for the journalists to post, and asking them to include a mention of the marketing campaign #PricelessSurprises and @MasterCardUK in their tweets.

Reaction: The PR agency commented that their role was to chase all coverage opportunities on behalf of their client in order to achieve the best results, and that it was a two-way conversation between the journalist and the PR in order to reach a mutually beneficial outcome. The agency also stated that editorial control always remains with the journalist.

      10.  Dorchester Hotel Boycott over Human Rights 

When the Sultan of Brunei announced a new Sharia penal code, his luxury hotel chain – the Dorchester Collection, faced an international boycott. The new law, which included the criminalisation of pregnancy outside of marriage, failure to perform Friday prayers, and the preaching of non-Muslim religions, was heavily criticised around the world by high profile celebrities, politicians and business leaders. Protestors included Stephen Fry, Richard Branson and the Mayor of Beverley Hills.

Reaction: Commenting on the Evening Standard, the Dorchester Collection said: “While we recognise people’s concerns we believe this boycott should not be directed at our hotels and dedicated employees. The impact of this not only affects our loyal team members but extends to the local community, our valued partners and suppliers as all profits from the Dorchester Collection continue to be re-invested into the hotels, their people and communities.”

If you are facing an issue relating to company online reputation, please contact Simon Wadsworth for more details. All enquiries are dealt with in confidence.

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