Corporate trust and reputation matter. In fact, they are every company or organization’s most valuable assets. Trust and reputation go hand-in-hand, but they’re determined by a company’s corporate image. Corporate image is the mental picture that pops into your head when an organization is mentioned, and it continually changes based on their circumstances, media coverage, performance, etc. The right image creates a bond of trust between you and the marketplace and allows a company to achieve their goals. A company’s corporate image can change at the drop of a hat, and it did for these companies. Check out the stories of how these 5 companies managed to ruin their corporate image.
The 2013 film “Blackfish” brought widespread public scrutiny to the morality of SeaWorld’s operations. Since the film’s release, the company’s woes have snowballed. Three whales died in 2015 in SeaWorld’s San Antonio, Texas location. While killer whales in the wild typically live 30-50 years, the most recent killer whale to die at SeaWorld didn’t even live to 19. In a likely attempt to polish its tarnished image and multiple protests, the company ended the killer whale show in its San Diego location this past year.
Samsung recalled about 2.5 million Note 7s following complaints that its lithium-ion battery explodes while charging… and in cars, planes, houses, etc. The company also had to recall the first replacements it sent out to consumers after they proved just as dangerous #EPICFAIL. Samsung has taken out full page advertisements in major US newspapers to apologize for the Galaxy Note 7 scandal in which fire-prone batteries forced a global recall of the popular smartphones. The full-page ads in the Wall Street Journal, New York Times and Washington Post admitted the company fell short on its promise of delivering breakthrough technologies that enrich people’s lives. ‘For this we are truly sorry,’ the company said.
The Gulf oil spill is recognized as the worst oil spill in U.S. history. Within days of the April 20, 2010 explosion and sinking of the Deepwater Horizon oil rig in the Gulf of Mexico that killed 11 people, underwater cameras revealed the BP pipe was leaking oil and gas on the ocean floor about 42 miles off the coast of Louisiana. By the time the well was capped on, 87 days later, an estimated 3.19 million barrels of oil had leaked into the Gulf. Not cool BP. The fury over BP’s role in the Gulf spill erased the progress BP had made on the corporate responsibility fronts in the previous decade. And to make matters worse, Deepwater Horizon, a movie dedicated to their screw up, just opened in theaters across the country.
Chipotle built its business over the course of more than two decades on a simple premise: being better than the fast-food chains. Its food is locally sourced-when possible- and grown and raised according to strict standards. Its employees are paid well compared to other restaurant chains, and even hourly workers receive benefits like paid vacation time and tuition reimbursement.
The image that Chipotle cultivated over the years led to exceptional results… until their e-coli outbreak. Two separate outbreaks of the bacteria were investigated by the FDA, the U.S. Department of Agriculture’s Food Safety and Inspection Service and public health officials in several states. In the first outbreak 55 people were infected by the foodborne illness in 11 states, of which 21 were hospitalized. The second, smaller outbreak, infected five people from three states, of which one was hospitalized.
Volkswagen’s is proof that a company’s reputation, and fortune, can change due to a single incident. For years, clean diesel was presented as an alternative to hybrid engines and was promoted as a major reason for consumers to buy cars with turbocharged direct injection (TDI) engines. Last year, the EPA accused VW of deliberately designing its vehicles to circumvent emissions tests. This was eventually confirmed, and overnight, the company went from an esteemed automaker to one of the most widely-disliked major companies. Volkswagen sales plummeted as a result, ruining their corporate image… at least for now.
The Bottom Line
Corporate image governs the way the world thinks about the organization. The right image creates a bond of trust between an organization and the marketplace, enables them to achieve their goals, and boost their overall earnings. It’s also important to note that if an organization doesn’t create their own image, we-the marketplace- will create one for them.
I found this article extremely interesting! I never really sat down and thought about how just one event or action can change the way millions of people see a brand- though, as the article demonstrates, it happens more often than one might think! Awesome post!
When I first saw the preview for Deepwater Horizon, I was shocked that they would want to make a movie about such a tragedy. However, after mulling it over, I actually think it might be a little genius. The movie focuses on the workers who were directly affected by this, adding a flash of human spark and sensitivity to what was originally just an environmental mess. By drawing attention to the personal stories of the people, they take the emphasis off of the oil spill itself. While certainly not making up for the terrible mess they created (in any way, shape, or form), it somehow softens the blow.
This post gives great examples of brands that have ruined their corporate image. The one that hits hardest for me is Seaworld; I had always wanted to go there as a child, but after watching “Blackfish”, I have no desire giving this company any money. I think it is absolutely terrible how they treat the animals there and it is shocking to me that it is still in business. I really thought more people would have boycotted it after the documentary came out, ultimately forcing them to shut down. I think this post effectively shows how marketing after a scandal can either save or sink the company altogether. If Chipolte hadn’t fixed their e-coli outbreak and taken considerable measures to prevent it from happening again, they would have definitely been shut down. Great job!
I love this blog because it really shows how quickly an incredibly strong, solid company image can go bad. Chipotle specifically is a great example of this because of how popular they were and for awhile there they were struggling. However, the fact that they are still doing okay and people have basically chosen to ignore the outbreak says something about how much people really like what they have to offer. A lot of the companies wouldn’t be able to bounce back from that. Great images and use of memes!
This post gives some great examples of organizations that ruined their image. I have heard about all of these issues, but I never looked further into them other than the headlines. What amazed me the most was the SeaWorld issue. I had heard of the Blackfish documentary and remember seeing the commercial that SeaWorld made in response to the criticism, but I never heard of the whales dying so young. I was honestly shocked when I read that. I think you pulled some great examples for showing how easily a brand can be ruined. Good job!
I haven’t seen the movie Blackfish but I’ve been to SeaWorld multiple times. Even as a child growing up and staring at the animals in amazement it was easy to see how sad they were and mistreated. As I got older and saw the size difference between the killer whale tank and the parking area for the park I was disgusted and appalled. I since haven’t been back to SeaWorld and do not ever plan on going, although I am now very interested in the seeing that movie.
I found this post to be extremely interesting considering the fact that I was aware of all of the “scandals” each company has experienced without particularly seeking them out. It is almost as if I heard about them through negative Word of Mouth Marketing. These disasters have made the brands synonymous with negative thoughts which will take them a while to recover from. On my flight home for Thanksgiving break the airlines had to continuously ask if anyone had a Galaxy Note 7 on their person because they were not allowed on the planes. This is a constant reminder to the public of Samsung’s failure.