Honesty is the best policy

A crisis affects the reputation of a company, and the reputation then affects the crisis management of the company. Reputation is not formed in a short period of time, and once it is formed, it is not likely to change. The public is likely to side with a company they deem favorable, and people usually keep to that opinion. So they would tend to look at the positive aspects of the company and consider mistakes or accidents in a less negative light.

However, it takes a long time to change a negative reputation into a positive one, and repeated occurrences of crisis irreversibly sour a company’s reputation. When preventable crises - such as mistakes by insiders, defects, corruption or wrongdoings - are repeated, people would think that the company neglected the crisis or failed to manage it.

Complicated interactions within the company and with outside organizations, intensified competition, and the expansion and development of communication channels have all made negative information more likely to spread, and crises are occurring more frequently.

Nowadays, the use of a public relations department’s crisis management team has been reinforced, but the latest responses of companies over controversial issues reveal a need to reconsider the function of public relations. When reputation management is critical, some companies remain silent or refuse to respond. Or they conceal the essence of the incidents and offer unconvincing excuses and explanations. The short-sighted responses fail to sever the chain of crises and only fan the skepticism and suspicion the public have, further expanding negative reputation.

Today, controlling, distorting or concealing information is impossible, and companies need to keep their eyes and ears open. They need to objectively understand the corporate environment and perception of interested parties and protect their names for long-term reputation. The best strategy is to speak the truth. When there is a fault, the company needs to recognize the accountability and correct the inappropriate operation and decision-making. It is the only realistic way to save the name.

by Sung Min-jung, Professor of advertising and public relations at Chung-Ang University