The following appeared as part of a company memorandum:
“Adopting an official code of ethics regarding business practices may in the long run do our company more harm than good in the public eye. When one of our competitors received unfavorable publicity for violating its own code of ethics, it got more attention from the media than it would have if it had had no such code. Rather than adopt an official code of ethics, therefore, we should instead conduct a publicity campaign that stresses the importance of protecting the environment and assisting charitable organizations.”
Discuss how well reasoned you find this argument. In your discussion be sure to analyze the line of reasoning and the use of evidence in the argument. For example, you may need to consider what questionable assumptions underlie the thinking and what alternative explanations or counterexamples might weaken the conclusion. You can also discuss what sort of evidence would strengthen or refute the argument, what changes in the argument would make it more logically sound, and what, if anything, would help you better evaluate its conclusion.
There are times when a company must act in a way that will publicize its good name, such as when it commits to improving its image, or when it takes on a corporate responsibility to reduce pollution or increase donations. Publicizing these ‘good’ behaviors can go a long way toward repairing an image damaged as a result of an earlier bad decision. On the other hand, a company’s actions may also cause negative publicity. If the company commits a crime, the media may publicize that, too, to the detriment of the company. For example, when Volkswagen was found to have rigged the emissions of its vehicles, its stock price took an immediate hit. In the wake of this scandal, the company found itself on the defensive, unable to repair its image. After more than a year, the company was able to regain some of its former glory, but only after spending tens of millions of dollars on advertising. Volkswagen’s actions had turned off a significant portion of the public, and rather than hiring an advertising firm to help the company counteract the negative publicity, the company should have adopted an official code of ethics and lived up to that code, regardless of what the competitors did.”First, we must consider what is meant by the word ‘publicity’ in this context. Although Volkswagen paid $20 million to run advertisements, the ads did not repair the company’s image. A marketing strategy focused on publicizing the company’s good name will not help a company repair its image if the public is already predisposed to dislike the company. In Volkswagen’s example, the company’s stock took a hit immediately after the news about the emissions testing was made public. The other car manufacturers, which had not yet discovered this trick, are now using Volkswagen’s actions as proof that they, too, unfairly alter their products’ emissions. Volkswagen’s stock is still down about 30%, and this damage will likely take years to repair
The argument assumes that advertising, rather than avoiding negative publicity, is the most effective strategy in repairing a damaged image. This assumption is questionable for several reasons. First, advertising is expensive. The two million dollars that Volkswagen spent on its advertisements probably would have bought the company much more publicity if it spent that money offering discounts to customers. This expense would have been worthwhile if consumers were predisposed to like Volkswagen, but most people loathe Volkswagen. Consumers who already dislike the company are not likely to change their mind simply because the company spends a lot of money on advertisements
Second, advertising is not an effective means of repairing the company’s image. Large companies, such as Volkswagen, can afford expensive advertising in an effort to repair their image. A small company, however, might not be able to afford the expense. The company that adopted this ‘publicity campaign’ would probably be forced to reduce its marketing budget. If the company was forced to cut its advertising budget, it might end up going out of business. Third, advertising may not help the company repair its image. If the company’s actions lead to negative publicity, the advertisements will only serve to inflame the negative feelings that the public already has about the company. Further, if the advertisements are run on social networking sites, they will reach those who are already predisposed to dislike the company, and will therefore do little to change the company’s image
Without a clear definition of ‘publicity’, the argument is flawed. Before a company commits to a public campaign to repair its image, it should examine its business practices to determine if they are ethical. If the company’s practices are not ethical, changing its image will not improve its reputation.