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Reputation, the new transparency and exploding cigars

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News Corporation’s brand goes “boom”

People the world over recently got a look at the inner workings of News Corporation, its culture and levels of corruption. Some have labelled alleged criminal activity as that usually found on film screens and in novels. Elements of the story are truly stranger than fiction.

Murdoch’s media empire is definitely taking more than a couple of body blows. Fox News, the Wall Street Journal and the New York Post are just a few of the properties News Corporation holds.

With more than 10,000 hacks into people’s private lives, the News Corporation story created a climate of outrage. People, even on the periphery of concerns regarding privacy, reacted through social media. They want boycotts. Murdoch has been physically jostled on the street, and he seems to have lost some of his composure and his air of supreme confidence in the wake of the scandal.

With all the recent news regarding mobile phones, and Apple’s being branded as “Big Brother” by privacy advocates over location-based tracking issues, not to mention Facebookgate, the News Corporation story is registering high on the shock, dismay and outrage meter.

The Guardian’s relentless pursuit of information in the case revealed that “pinging” journalists at News of the World and The Sun may have incorporated elements of the police, private investigators and mobile phone companies to literally sniff out individuals through triangulation techniques. Sounds like a privacy advocate’s worst-case scenario regarding mobile technology.

How would Philip K. Dick have reacted to the bribing of employees in agencies that hold (and are supposed to protect) personal data? Truth approaches fiction. Money may have passed back and forth between journalists and the police in shades of cartel noir. The News Corporation story has withdrawn a veil of secrecy, and people were revolted by what they saw, read and heard. The public verdict of guilt is already a “done deal”.

Murdoch’s business, because of alleged strong-arm tactics and an attitude of “any political means necessary”, may suffer greatly. Advertisers, investment funds and shareholders don’t want to associate themselves with a brand that fills the public with loathing. Reputation has always been key to an organization’s ability to recover share price after a major market decline – just as reputational issues have often led companies’ shares into a downward spiral.

The scandal has generated some interesting questions:

• Will Britain impose reforms? Prison sentences?
• Will the public outcry for an investigation into elite politics and the media win the day?
• Has awareness of the scandal (worldwide) led to thoughts of the dangers of media abuses? Will awareness lead to substantial change?
• Are cloak and dagger meetings between governments, journalists and lobbyists (to name just a few participants) going to disappear?
• Will people continue to forgo security and rights to privacy so that they can download the latest app?


• Will companies understand that corporate reputation and transparency issues are here to stay and that best practices when it comes to respecting privacy rights and using new location-based technologies are important?

It’s been said before but the best kind of crisis management avoids crises in the first place.

Recent history has provided many corporate darlings who’ve become vilified. It will be interesting to see how the News Corporation scandal turns out and how it affects the company. Since incorporating best practices into strategy regarding privacy issues acts like preventative medicine, companies would be wise to position themselves as exceptional stewards of their customers’ information.

After all, exploding reputational cigars can go off with the power of an H-bomb.

Further reading:

How did they hack everyone’s phones?

How to avoid getting hacked

How reputation affects shareholder opinions: Bad news for (the younger) Murdoch

Reputation matters … Some of the ever-widening ramifications of the News Of The World scandal 

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