FORD KUGA SAGA
Counting the cost of the different ways companies respond to crises
Study finds a perception of management culpability and the absence of an apology usually hit shares harder, writes Max Gebhardt
What price a company’s reputation? This is the question Business Day quite rightly asked in a recent editorial (Ford failed at every turn, January 18). There is no doubt Ford’s brand in the local market has suffered reputational damage due to the flaming Kuga saga. The quantity of that damage will only become apparent in the months and perhaps years to come. As a multinational with no local listing, and given SA’s relatively small market size to the overall Ford business, there has been no effect on the company’s share price or market valuation, as might be expected had this occurred in a bigger market. In fact, in the past three months, while the news of spontaneously combusting Kugas gripped the South African media, Ford’s share price in New York showed a marginal gain. But how should Ford have responded? In this age of round-the-clock company scrutiny, we see almost as much focus given to how a company handles a crisis as the crisis itself. With turbulence in our world growing an...