This is a summary of the book titled “Reputation Analytics: Public opinion for companies” written by Daniel Diermeier and published by University of Chicago Press in 2023. This book outlines the necessity and method for a corporation to protect itself from a corporate reputation crisis. The author explains how small actions and even inactions can cascade into a massive crisis and potentially harm the business, even in the long run. By providing examples and learnings, the author provides a step-by-step framework to achieve that goal. Some of the highlights are that managing a corporate reputation is like thinking as a political strategist. People form both specific and general impressions and they do so in six primary ways. Companies face reputational crises when they trigger a “moral outrage”. It is difficult to fight perceptions that a brand is causing harm, so taking accountability becomes a consideration. The tasks in an activist’s campaign are something that a company must be comfortable managing. Leveraging a deep understanding of media and social network influence and harnessing emerging technologies are necessary. A risk management mindset that avoids common mistakes also helps.

Managing a corporate reputation is similar to managing public opinion, but companies must consider various publics, including customers, employees, investors, business partners, suppliers, and external groups like regulators and the media. Successful reputation management requires assuming external actors' perspectives and viewpoints, as public perceptions are not always rooted in direct experiences and may differ across constituencies, products, and markets. People form specific and general impressions of a brand in six primary ways: repetition, relevance, attention, affect, concordance, and online processing. Companies face reputational crises when they trigger "moral outrage," which is emotional response to a brand's break with ethical norms or values. Moral judgment hinges on three main principles: the duty to avoid causing others harm, upholding fairness, justice, and rights, and respecting moral conventions and values. People employ two modes of thinking when making moral judgments: experiential (experiential) and analytical (logic-based). Companies must make reputation management an integral part of their strategic operations to avoid reputational crises and maintain a positive brand image.

Brands must take accountability for their actions and consider "folk economics" before taking action. The public's perception of commerce and industry can affect a company's reputation. Companies should fight against accusations with clear, easy-to-understand arguments and apologize for any harm caused. Leaders should demonstrate commitment to handling crises and empathy towards those harmed by the company's actions. Modern companies are more likely to face activist campaigns that damage reputations due to increased ethical expectations, media criticism, and trust-based business models. Social activism is more common and less localized, thanks to social media. Companies should adopt corporate social responsibility (CSR) practices but not be afraid of activist attacks. Statistical modeling should consider these factors to avoid misinterpretation. Companies should also leverage a deep understanding of media and social network influence to avoid negative media coverage that can trigger a reputational crisis. For example, Toyota's stock prices plummeted after a car crash, despite the company's overall safety record.

Perceptions and attitudes are influenced by peers, third-party experts, and media, both traditional and user-generated. Building and maintaining a successful reputation in the marketplace requires a deep understanding of these channels of influence. Media outlets can play a significant role in determining the issues to which people pay attention, and when one company in a particular industry or product area comes under media scrutiny, the potential for reputational damage increases for all businesses in that sector and those in closely related sectors. Social media also wields influence over public opinion, and using linear regression models can help identify triggers for a rise in certain variables.

To manage corporate reputation proactively, organizations should explore alternative ways of collecting and analyzing consumer data, such as sentiment analysis, machine learning algorithms, text-analytic scores, and supervised learning models. A risk management mindset is essential, as people will consider a company's current actions and past actions when under public scrutiny.

To avoid reputational crises, shift from reactive crisis management to proactive risk management. Develop a reputation management system into your corporate strategy and appoint a tactical team to oversee it. Regularly update leadership on potential risks and employ preparation strategies for those you cannot avoid. Invest time in assessing important issues that could risk reputational damage. Monitor emerging issues and respond accordingly. By developing a proactive reputation management capability, you increase the likelihood of preventing crises before they occur.

Summarizing Software: 

SummarizerCodeSnippets.docx

##codingexercise https://1drv.ms/w/s!Ashlm-Nw-wnWhO1TAZ1Y860-W7-vGw?e=s3pvmb