The Effects that Scandals and Ethical Violations have on the Future Culture of Companies
The lasting effects that a scandal and/or ethical violation can have on a company’s reputation and potential profits can be a key determinant as to whether the company can rebound from such circumstances. Some companies are able to rebound from scandal rather quickly (), while others (i.e. Wells Fargo) are still dealing with the effects. The challenges for companies and its employees rely on their ability to withstand six key factors: Market dynamics, Reputation, Investor Reaction, Resilience, Duration, Impact.
Six Factors of the “Scandal Effect”
Market dynamics is the demand for the violating companies services or goods. Also, if there are limited options beyond the scandal-tainted company within the same industry that consumers can choose from, often customers will feel less resistant to forgive the company. Reputation is the degree to which the consumers are taken by surprise will influence the degree to which a brand feel the “heat.” Investor …show more content…
Although the bank has recognized a 14% decrease in customers visits to bank branches, they are dealing with the increase popularity of online and mobile banking (10% increase). Which in the technological advance era we are in—should come as no surprise. Their resilience stems from the elimination of sales goals in branches to deter such ethical violations from resurfacing. Another act of resilience is recognized through the valuation of their company through the stock market, nearing an all-time high in the last quarter of 2016. There is no clear predictor for how the bank will do moving forward, however, by working diligently to regain their consumers trust and loyalty, as well as, incorporating countermeasures to the scandal effect factors—the market doesn’t envision the long-term effects will be too
The lasting effects that a scandal and/or ethical violation can have on a company’s reputation and potential profits can be a key determinant as to whether the company can rebound from such circumstances. Some companies are able to rebound from scandal rather quickly (), while others (i.e. Wells Fargo) are still dealing with the effects. The challenges for companies and its employees rely on their ability to withstand six key factors: Market dynamics, Reputation, Investor Reaction, Resilience, Duration, Impact.
Six Factors of the “Scandal Effect”
Market dynamics is the demand for the violating companies services or goods. Also, if there are limited options beyond the scandal-tainted company within the same industry that consumers can choose from, often customers will feel less resistant to forgive the company. Reputation is the degree to which the consumers are taken by surprise will influence the degree to which a brand feel the “heat.” Investor …show more content…
Although the bank has recognized a 14% decrease in customers visits to bank branches, they are dealing with the increase popularity of online and mobile banking (10% increase). Which in the technological advance era we are in—should come as no surprise. Their resilience stems from the elimination of sales goals in branches to deter such ethical violations from resurfacing. Another act of resilience is recognized through the valuation of their company through the stock market, nearing an all-time high in the last quarter of 2016. There is no clear predictor for how the bank will do moving forward, however, by working diligently to regain their consumers trust and loyalty, as well as, incorporating countermeasures to the scandal effect factors—the market doesn’t envision the long-term effects will be too