Carolyn Denise Maddox
Unit 1
Tainted Baby Milk Powder
April 30, 2012

1) I do believe that there has been significant damage done to Baidu.com’s reputation. This company was involved in a very high profile case that involved human beings health which is more important than any financial gain or loss. As the case states, the stock share price has declined almost $200 which indicates that public opinion and trust in the company has fallen tremendously. Tens of thousands of children would not have been sickened if people were informed earlier about the tainted milk. 2) For the most part, companies measure their reputation by stock price. Continuous reputation damage can have a detrimental effect on the company’s stock price which in effect the bottom line of profit and dividends. I think a bad reputation has a domino effect on the entire organization. The overall effect can be measured by total dollar sales, profit, stock price increase or decrease, has the customer base declined, etc. including the demise of the business itself. 3) I think the first step for the company would be to admit to its wrong doing and try to fix it from there. Although there will be many upset by the admittance, I believe that more are upset because they have not admitted to wrong doing. It is a matter of trust and knowing that one will stand up for the mistakes that have been made. The biggest challenge is regaining trust from the stakeholders, investors and then the consumers. I think the company needs to take social responsibility for the crisis. There were innocent lives lost all because no one spoke up about the tainted product. Naturally there will be repercussions for all involved but consumers are forgiving if the situation is handled correctly. 5. I think that the “culture of secrecy” has been diminished over the years. I believe that since more CEOs and top executives are now being named out and penalized as well as sued. Due to new government regulations, board members are being forced to have greater oversight in the activities. Although the SOX Act and other regulations are requiring mandated disclosure, I think that having companies be as transparency as possible would definitely remedy the culture of secrecy.