Contemporary United States and Corporate Reputation


1)     Explain the condition of uneasiness and indifference and how it defines our current period.

C. Wright Mills declares that uneasiness arises when people are unaware of any cherished values, but still sense a threat. The experience of indifference occurs when people are neither aware of any cherished values nor experience any threat. This indifference can turn to apathy, if it encompasses all of a persons’ values. Our current period is marked by uneasiness, which is a personal trouble, and the issue of indifference. Mass leisure, as opposed to poverty, has become the center of concern. The problems created by this leisure time, coupled with the ambition of men at work in the incorporated economy have shaped the problems of public and private life. Uneasiness and indifference now form the social and personal climate of American society. Social scientists must distinguish the elements of uneasiness and indifference while possessing the sociological imagination quality of mind.

2)    Explain how unethical actions affect not only single businesses, but also entire industries and countries.

Business behavior affects personal and company reputations, society, and national reputation as well. Reputation in the business world influences everything. For example, reputation influences trade relations, who will hire you, buy from you, or who will finance your debt. Unethical behavior can tarnish the reputation of a business with lasting consequences.

National reputation can be compromised when unethical actions lead to a major crisis. The 2008 financial crisis had its roots in the United States. The reputation of the U.S., in turn, suffered greatly because of individuals and certain companies. China’s reputation has also suffered due to the contaminants found in some of the country’s exports. These scandals point out the key takeaway that corporate misbehavior does not solely affect corporate reputations. This sort of unethical behavior has detrimental effects that impact entire industries and countries.

3)   How much does corporate reputation actually affect the bottom line?

Corporate reputation greatly impacts consumer buying patterns. Companies that take part in unethical behavior run the risk of harming their bottom line in today’s business world where reputation means everything. For example, two recent scandals have surfaced in corporate Japan that have each been highly detrimental to the companies involved. The first of these scandals occurred when the former chief executive of Olympus, the medical imaging and digital camera maker, released internal documents proving that the company made over $1 billion in improper payments over a series of acquisitions. As a result of this behavior, the company has lost half its stock market value this month.

The other major controversy of Japan concerned the country’s leading tissue maker, Daio Paper. The company filed a criminal complaint against its former chairman who allegedly borrowed $140 million in company money and channeled some of it to a Las Vegas casino company. Ex-chairman, Mr. Ikawa has admitted to borrowing the money but has suggested he intended to return it. Consequently, Daio Paper’s share price has dropped about 15 percent since the reports about the loans began to surface in the local media. Both of these scandals mark the importance of maintaining strict corporate responsibility. Unethical decisions have the ability to greatly upset a company’s bottom line.

http://www.nytimes.com/2011/10/29/business/global/new-scandal-presses-corporate-japan.html

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9 thoughts on “Contemporary United States and Corporate Reputation

  1. Meg, I really enjoyed your blog. I thought your point about how unethical decisions affect industries as a whole as well as countries was fascinating. When companies make unethical decisions that cause worldwide problems then the actions of one company are seen as the actions of the entire country. In my blog I discussed the BP oil spill and their unethical decisions about cutting costs and neglecting safety precautions. When the oil spill occurred it had a negative effect on America, showing that we aren’t being environmentally cautious. The spill displayed that America is acting in a careless fashion, which is directly harming the environment. I think all companies need to be more aware of the affect their decisions have on the country as a whole and it is beneficial to all to make ethical business decisions.

  2. I believe corporate reputation plays a rather large role in the bottom line of a company up to a certain point. Companies in a highly competitive environment where market share is divided up with many different players may benefit from being ethical and responsible because they can present a better image over the immediate competition. When stuck for a choice between similar companies, if someone knows a company acts more ethically than another, their decision may lean towards that responsible company. I think people would agree they would chose the more ethical company if the products or services offered were similar enough.
    This is more true for the environment mapped out above, but when a company is such a large holder of market share on its own, it can almost act however it wants and still see a great bottom line. Once a company becomes the market leader, its almost like they can do no wrong. We all know Nike has some questionable labor practices, but we all still buy their products. Apple has also had some labor practices questioned, but they are still one of the most successful, profitable companies out there. I think companies generally end up acting only as ethically as they “need” to in order to keep their position in the market.

  3. I agree with a lot of what your saying Meg about corporate reputation. A company’s reputation indicates how the world views that company, from such a standpoint as business ethics. Your Olympus example emphasizes that it lost half its stock market value in a month due to its poor and illegal financial reputation. Companies that use sweatshops lose customers because they treat their works improperly. That’s why companies who act ethically and responsibly try to show the public how responsible they really are. Take for example a company like Enron, someone who crafted a highly creative accounting fraud, became bankrupt following the public awareness of the scandal. Enron, like your example of Daio Paper, show what happened to a company’s value when they are universally known to be corrupt financially. In the end, a corporation’s reputation significantly affects the bottom line.

    • Like the three said before me, I totally agree with everything you’re saying. Well worded and I got to read an interesting article about Olympus!
      Since you’ve received lots of kudos, I want to play devil’s advocate for just a moment…
      Apple, for example, is a market leader for many different types of technology. Their products are functional and easy to use. The company has also mastered the market since they have changed these tools chic pieces of equipment into excessively desired accessories. Do they really need ensure that every part of the company function on an ethical level? Are you suggesting that all bottoms lines will be affected by better corporate behavior? Is that raise in profit enough incentive for those companies that dominate certain markets? For these businesses would it be worth the time and money to shift into strictly moral practices? Will their reputation be tarnished OR will there still be a line wrapped around the block on the eve of a new product release? I believe I can answer knowingly that people will be there regardless of whatever Apple’s moral reputation is on that day.

  4. Yes, I guess the amount that the bottom line is affected really depends on the circumstance, the company, and the nature of the unethical action. The two examples I explained above about corporations in Japan, mainly involved one person in each case that took part in a form of financial fraud. And as a result of their actions, the companies suffered greatly. Their actions were undoubtedly unethical, but Apple is a company in similar circumstances that isn’t faltering at all due to their unethical practices. Apple is performing perfectly, despite all the negative press surrounding the working conditions of their factories. So, in this case, the unethical actions of this company, seem to have no effect on the bottom line. Apple’s good reputation for providing superior products outweighs its poorer reputation about the nature of how those products were made.

    • I completely agree with you Megan – there are definitely two different situations depending on the situation and the nature of the action. In the examples you provided there is no doubt that the companies greatly suffered. And while I don’t know of any off the top of my head I’m sure you could find many more with similar seriousness. But at the same time I just read many terrible articles about Apple – as we all did – and I’m sure each of us will still have our iPhone’s in class tomorrow. I think American Culture has come to accept that the business world has to be competitive and cut-throat which sometimes means bad wages and bad treatment of their workers internationally for example. Apple will probably still do fine regardless of the articles printed for all Americans to read.

  5. 1) Why “must” social scientists examine the differences of unease and indifference? What is the sense of urgency in Mill’s writing, do you think?

  6. 2) Ok, if reputation is as powerful as profit-motive, then why is it that these supposedly rational, profit-seeking managers can’t seem to figure out that damaging their reputations hurts their businesses?

    3) Why are you so up on Japanese business news?

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