November 13th 2012
Ms. Robin Smith
ALO Company Inc.
Main Street, Vancouver
Dear Ms. Smith,
This letter is a feedback regarding the scandalous issue surrounding your company presently, which needs to be addressed. I understand that the company is in a delicate state, and this bears profound effects to its health and viability. Important steps therefore need to be taken, as this is a matter of urgency for your company to continue competing healthily in the market. The scandal your company is associated with was because of few individuals who were not loyal enough to uphold and maintain the integrity of their company. This therefore is a different case, since the company, as a whole did not participate in this scandal. In this case, we expect that your stockholders will find it easy to understand that your company does not condone such ill practices. This therefore was a case of utter misrepresentation by the few individuals, thus tainting the whole company image and brand.
An important step the company took by firing the employees involved in this scandal is quite commendable. This proves to the stockholders that your company does not condone such malpractices. You have laid a strong foundation for the successful process of image repair. In the process of restoring company image, the company should most acknowledge its involvement in this malpractice, and then develop effective strategies for repairing its image. These strategies must ensure proper communication flow between the company and the stockholders, who are the customers, shareholders, and donors. Only by doing this will the company effectively address the issues surrounding the scandal, and win back the trust of its stockholders.
Enclosed: proposal for ALO Company Inc
Communication Proposal Strategy
Restoration of Company Image after a Scandal
November 13th 2012
Accounting firms are critical as they deal with finances, which is an important aspect of business. These are expected to conduct their business in the most trustworthy manner, proving to their clients that they can be trusted to deal with finances. Due to the sensitivity of these companies, any little scandal will draw great concerns from their keenly watching stockholders. With operations in China, Australia, Japan, and Korea, the company is expected to exhibit the highest level of integrity and trust in its operations as these countries are big economies, and highly revolutionized. This scandal has raised many questions, especially considering that Korea Government Agency was involved. With all these factors in place, the stockholders perceptions of the company have changed as the scandal has put the company in negative light. The company risks losing out, if necessary steps are not taken to clear this mess. This also influences the employees of the company, as this may make them feel inferior, thereby reducing their performance, job satisfaction, and finally company productivity. Therefore, the faster we fix this, the better.
The Post-Crisis State of the Company
Today, the company is in a post-crisis state. The scandal the company employees were involved in has altered the company operations in a negative manner. It therefore needs to employ all the crisis strategies it trained its employees in its crisis mitigation programs, before the occurrence of this new scandal. New strategies can also be employed to help rectify the situation.
The effects of this crisis are not yet felt by the company because the scandal is still fresh. However, without appropriate actions taken, these effects will be manifest with time. Currently, it is possible that some of the company stockholders are hesitating to give the company contracts for fear of untrustworthiness. Most are waiting for the company to come out clean before transacting business with it again. Therefore, the faster you address this issue the better, as the company will save on great loses, which are looming.
Consequences of the Crisis on the Company
What makes this crisis to register a bigger magnitude is the fact that a senior manager of the company was involved. A company’s management team is the face of the company; therefore, any wrongdoing on their side taints company integrity. The greatest consequence of this case is reputation damage. This is an immediate effect unlike the others. Once this scandal was publicized, the stockholders’ perceptions of the company changed immediately. The image of the company now is tainted.
If the company does not devote to solving this crisis in an amicable manner, the company will incur loses. This is a long-term effect, but crucial. This crisis has already resulted in stockholders’ losing faith in the company. Therefore, if the stockholders’ faith is not won back in time, they will withdraw from conducting business with the company in fear of loses. The company also risks brand erosion. This subsequently lowers company profits, and may plunge the company into bankruptcy. The company needs to work on its image in order to win back its stockholders.
Conclusions and recommendations
The impact of this scandal on the company today is hard to determine as this operates in four different countries. Nonetheless, the company should attempt analyzing the extent of risk this scandal poses. What we are certain is that the impact is there and is a negative one. Considering the nature of this crisis, the company does not need to rebrand, but only needs to restore its image especially in all the markets it operates. The most important thing is for the company to develop and employ its post-crisis communication strategy to solve this. This corrective action will involve the following strategies, which bank on language use, persuasive messages, and symbolic actions;
Image Repair Strategies
- Public Crisis Communication
Avoid silence and denial strategy, instead the company should come out and publicly acknowledge this crisis. Silence and denial will aggravate negativity from stockholders. Interaction with the public and other organizations through the media, or directly will help put the issue in context. Company should explain the scandal and respond to questions about responsibility, cause, remedial plans, harm, and blame of the crisis.
- Symbolic Acts
The company must utilize the media to regain its positive image. While advertising, use bright colors, and dwell on company leadership, core values, and long-term plans, rather than company products. Hold occasional press conferences to regain rapport with the public. In addition, there is need to invest in social responsibility. Active participation in charitable events and acts will fade the tainted image and make the public to start seeing the company in the past positive light.
- Traditional Media
The company should use traditional media such as newspapers, radio, and television, or own press to address the situation as these are broad in nature. The internet should not be trusted in addressing this issue due to its unpredictability and uncontrollability. Learning from other companies, and how they dealt with crisis is important.
In conclusion, things have gone wrong, and only right strategies will clear this mess and help restore the company’s corporate image. The company should take a swift ‘silver bullet” move in addressing this crisis, as it is not a light matter. The journey to image restoration of the company starts with acknowledgement of the crisis, assessment of risks, and finally corrective actions. Since this company operates in different countries, the strategies adopted must be flexible and apply to all the countries. This will ensure total restoration of the company’s image.
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