Reputation Risks Secondary Actors

Michael D. Moberly    April 10, 2014    ‘A long form blog where attention span really matters’.

Reputation risks can produce secondary actors.  Most examples of materialized reputation risk which draw my attention emanate from online discussion groups, business magazines and various other (media) sources in which usually there are often well warranted critiques of mishandled calamities of Fortune ranked firms.  Too, those discussions are frequently framed in 50,000 foot altitude language, no doubt, in part, because when Fortune ranked firms experience a ‘reputation risk’, inevitably, there are two commonalities that eventually come to light, i.e., the risk…

  • has often been known and festering for a period of time within the company but not acted upon.
  •  is of sufficient magnitude that media attention is warranted and obligated, i.e., automobile safety recalls.

But usually, the media attention and subject matter expert discussions and critique meld away because in a few weeks as other companies experience reputation risk events.  Somewhat unfortunately, little of such discussion or critiques are conveyed at the 50 foot altitudes where reactions to an exposed reputation risk can assume a much more personal context.  Too, at the 50 foot altitudes employees are far removed from the company’s c-suite and its official line it has adopted.

This leaves one to conclude that, at the 50 foot altitudes,  reactions may be more revenge and/or retribution orientation. Yes, these terms may be harsh but I am hard pressed to identify words or language that better reflects what sometimes occurs. More specifically, companies experiencing significant events – oversights which adversely affect their reputation ought not assume that mid to lower management personnel may not engage in reactions that specifically reflect the official company line.

As an example, let’s examine the multiple reputation risk challenges experienced by Toyota over the past few months – years, including another massive recall announced yesterday.  The initial risk Toyota experienced that lead to recalls, dealt with untimely (vehicle) acceleration.

Well, a long standing academic unit at Southern Illinois University Carbondale is an Automotive Technology program which is, by all accounts an excellent program.  For years the Auto Tech program has been the butt of ignorant and disrespectful jokes, often emanating internally, insofar as being characterized as ‘truck driver training or a shade tree auto mechanic school’.  Of course, nothing could be further from the truth.  This academic unit has won far more than its share of national awards for both its technology prowess and its partnerships with every automobile manufacturers including Toyota which donated automobiles and held two positions on the programs’ board of advisors.

Perhaps with some irony, a faculty member of the Auto Tech program who’s specialty – expertise was in automobile ignition systems had recently purchased a Toyota, as it would happen, shortly after the company’s ‘acceleration problem’ came to light.

With customary research curiosity, this faculty member brought his Toyota into the Automotive Technology program ‘shop’ and set out to try to find the cause of the ‘sudden unintended acceleration’ problem (perhaps caused by faulty ignition switches) using his own newly purchased Toyota Tundra as the ‘test’ subject.

Not wishing to belabor the point, this professor did, in fact identify a technical theory as to what was causing the dangerous acceleration problems. He put his findings – theory to paper and sent it the National Highway Transportation Board fully expecting that would be the end of it.  But no, the following week he received a call from a Congressional oversight committee and found himself testifying before Congress a few days later.

One may think such research coupled with an invite to testify before a Congressional committee would be a good thing, right?, with University administrators being thrilled with the national recognition it would achieve.  But, not in this instance, Toyota representatives arrived on the campus soon after, and in possession of the professor’s entire (Congressional) testimony in which they set about to critically review ‘line by line’.  Needless to say, the Toyota officials were not pleased, and perhaps even more unfortunately, neither were SIUC’s administration which cast doubt on the professors’ continued employment as was his research, which by the way, NASA scientists, who were also researching the same problem, strongly supported.  Before the Toyota officials departed campus, they took back the vehicles they had donated to the Automotive Technology Program’s and also resigned their two seats on the program’s Advisory Board.

Probably every reader of this blog would not find the above particularly surprising or necessarily out of character for multi-national firms to react in such a direct and revengeful manner.  After all, it was indeed adversely affecting not just their reputation, but their ‘bottom line’.

But, what I find even more interesting is why would administrators of such a large university, unwittingly open their doors to potentially be on the receiving end themselves of (academic research) reputation risk, seemingly absent thought given to the time honored principles of academic freedom?


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