Auditing

CSR as Reputation Insurance:
PRIMUM NON NOCERE

Dylan Minor John Morgan

or many ?rms, the most precious asset lies not on the balance sheet, nor in the human capital of the workforce, but quite an in its nature. For instance, IBMs reputation for creation an enterprise-friendly and ef?cient solutions provider has enabled it to remonstrate rivals for business over many years. McDonalds reputation for being a family-friendly and economical place to eat has sustained its merchandise share in the face of ?erce competition from other(a) chains. However, reputation can be a fragile thing. Consider British Petroleum (BP) and its young oil spill in the disjuncture of Mexico. While BP had for years invested in its sunburst logo and various do good and be green campaigns, its reputation quickly slipped external in the midst of tragedy: its ?rm take account was decimated by just about $100 billion.1 Another example is Toyota, which became the largest automobile manufacturer by dint of its reputation for reliability and value but has suffered as allegations of wrong accelerators and cover-ups of these problems have come to light. This can be seen vividly in the resale market where even Toyota vehicles unaffected by the recalls declined in value by an estimated 4-5%.



2 Likewise Dell, which became the leading PC manufacturer for the most part on the basis of quality and low price, has suffered reverses in recent years owing to laptop batteries catching ?re and other quality control problems. This has contributed to a cumulative loss of a third of its market value.3 In short, reputational risk is one of the report business risks that ?rms face. The usual business responses to such risks are to frolic to insurance markets or to self-insure. For instance, Google, whose reputation rests on the reliability and fixity of its search results, takes the unusual step of designing its own servers with peculiar(prenominal) features such as a patented internal stand-in power system, to maximize reliability and ef?ciency should a problem arise.4...If you wish to get a full essay, order it on our website: Orderessay



If you want to get a full essay, wisit our page: write my essay .