Business decisions are generally intended to bring about change in order to achieve a particular objective. Such objectives are usually regarded as desirable, at least by those making the decisions, when considered from certain perspectives. As we all know, decisions usually involve compromises. Virtually no change intended and ideally brought about by a decision is exclusively positive when considered from every conceivable perspective.
The effects of these changes—whether they are the intended outcome or merely side effects accepted as a consequence of a decision—will sooner or later be noticed by the groups mentioned above. They therefore have the potential to influence the company’s reputation among these groups.
“It takes 20 years to build a reputation and five minutes to ruin it.”
— Commonly attributed to Warren Buffett
Although it is impossible to predict with certainty how the consequences of a decision, as perceived by different groups, will affect a company’s reputation, it is nevertheless possible to estimate certain tendencies to some extent. This can be done even without social science studies or opinion polls, by applying what is commonly referred to as common sense—a term we consider particularly appropriate in this context.
Yet the external perception of corporate actions is all too often not given the importance it deserves, considering its potential impact on a company’s reputation and, consequently, on its development.