Managing corporate reputation

CIM No. 38425137

CHARTERED POSTGRADUATE DIPLOMA IN

MARKETING
MANAGING CORPORATE
REPUTATION

CIM MEMBERSHIP No : 38425137

MANAGING CORPORATE REPUTATION

SERIES : JUNE 2016

STUDY CENTRE : ZCAS

WORD COUNT : 4,650

DECLARATION: I do solemnly confirm that this assignment
submitted for marking, conforms to the CIM policies relating to plagiarism,
collusion and word count, for all tasks contained herein. This assignment is as a
result of my own independent analysis, work and investigation otherwise where
applicable has been referenced with acknowledgement in the body of the text or
bibliography in the appendix. This work submitted has not in either way been
previously accepted in form for any other professional award. In addition I further
confirm that, I have not at any time shared this work project with any other
candidates.

Page | 1
Managing corporate reputation
CIM No. 38425137

RECCOMMENDATION REPORT
Subject:
Using Issues Management to Build
Reputation Insurance

Prepared by:
Chief Marketing Officer
To
Chief Executive Officer
Lusaka
Zambia

June 02, 2016

Page | 2
Managing corporate reputation
CIM No. 38425137

CONTENTS:

Executive Summary
..Page 5

Task 1:
Introduction.................................................................................
Page 6
1.1 A Critical evaluation of the concept of Issues
Management..Page 6
1.1.2 Is the management of issues
importantPage 7
1.2 A Critical evaluation of the extent to which MTN actively
manages issues of each stakeholder group and steps the
organization takes to protect its
reputation
Page 8-9
1.3 An analysis of issues which could impact upon MTN, using a
stakeholder map to identify, organise and prioritise key
stakeholders....Page 10-11
1.3.1An outline of the issues which affect each stakeholder
group...Page 11
1.4 A recommendation with justification of an issues management
strategy for MTN which will strengthen and protect its reputation in
a competitive marketplace. ..

Page 12-13
1.4.1 Financial and Political implication of implementation...
Page 13

Task 2:
Introduction.....................Pa
ge 14
2.1 A critical analysis of the concept of corporate social
responsibility and its impact on corporate reputation, including a
discussion of the main ethical positions relating to CSR
..
.Page 14-15

Page | 3
Managing corporate reputation
CIM No. 38425137

2.2 Critically appraise the current corporate social responsibility

strategy for MTN, and evaluate the extent to which the strategy is
implemented and supported by key stakeholders
..
Page 16-17
2.3 A critical evaluation of the extent to which corporate social
responsibility is embedded within the identity of MTN, and consider
how genuine CSR efforts are

....Page 18
2.4 A recommendation with justification of a social responsibility
strategy that will support MTNs objective and protect it
reputation................................................................
......Page 19-20
2.4.1 Financial and Political implication of
implementation........................................................
.....Page 20-21
Appendix 1 MTN Brief Background.
.. Page 22-23
Appendix 2 Bibliography
.... Page 24-25
Appendix 3 Perception and attitude of MTNs Stakeholders..
Page 26
Appendix 3 A corporate social responsibility continuum....
Page 27
Appendix 4 Clean-up Campaign ...
Page 28-29

Page | 4
Managing corporate reputation
CIM No. 38425137

Executive Summary (words 340)

This recommendation report tries to assess the concepts of issues management
with the view of identifying its importance as well as providing a frame work for
managing and monitoring issues on corporate reputation, through a model
developed by Jones & Chase.
The report further explains how MTN managers to identify its principal
stakeholders and prioritise issues that affect each of these stakeholder groups. It
further elaborates the steps the organization undertakes to protect its reputation
such; as creation of a unions, establishment of call centres and service centres,
established channel of communication through the PR department, good working
relationship with vendors, prioritise shareholder value and also offering various
sponsorship programs to the community.
It also examines an analysis of issues which could impact upon the organizations
activities in the marketplace. The stakeholder mapping developed by Mendelow
provides a basis for identifying and prioritising its 5 key principal stakeholders;
customers, the investor community, the government, the employees and local
community.
The report further explores the necessary changes to the current issues
management strategy for MTN by proposing the following implementation;
employee engagement, consultation program with government, formulation of
financial reports and data, community engagement, analysis of customer views.

Page | 5
Managing corporate reputation
CIM No. 38425137

It also provides a communication campaign to be undertaken to communicate

with stakeholders. An explanation of the financial and political implications is
provided so as to implement the proposed changes.
Lastly the report offers an analysis of the concepts of social responsibility and its
impact on corporate reputation. A CSR continuum illustrated by Parker indicates
the necessity of CSR initiatives and the ethical position of such initiatives. In
addition it also tries to examine how its current CSR strategy; corporate
sponsorship is embedded within the identity of MTN as an organization with
emphasis on reputation. It further concludes by offering a recommended CSR
initiative strategy based on environmental management with a green campaign
message that marries with the overall organizational strategy. The report also
provides the political implications and financial changes through the loyalty
based cycle of growth model for effective corporate identity.

TASK 1

Introduction
Issues are all around us and organization too are not exempted from them more
so if they have built a strong corporate reputation or are in the process of doing
so. It is therefore imperative for organizations to examine issues raised by its
stakeholders as they interact with the organization on a day to day basis. These
Issues arise as a result of the publics involvement in the operations of an
organization in its marketplace; organizations therefore are faced with a huge
task of identifying that gap that exists between themselves and their public. It
has been illustrated with various examples in industry how organizations have
been protected by having a strong corporate reputation such as the fortune 1000
companies; Chevron, Apple, General Motors and many others including the
recent scandals that hit Mitsubishi and VW.

Page | 6
Managing corporate reputation
CIM No. 38425137

Organizations therefore rely on corporate reputation as a means to manage its

corporate image in times of crisis. Corporate reputation is a collective
representation of a firms past actions and results that describes the firms ability
to deliver valued outcomes to multiple stakeholders. It gauges a firms relative
standing both internally with employees and externally with its stakeholders, in
both its competitive and institutional environments. (Fombrun & Rindova, 1996;
Fombrun & Van Riel 1997, p. 10) It is also important to note that, a reputation is
a perception of past actions and future behaviour viewed not in isolation but in
the context of what others are doing in the market. (Brady & Honey 2007, p. 6)

1.1. CRITICALLY EVALUATE THE CONCEPT OF ISSUES

MANAGEMENT, AND THE IMPORTANCE AND IMPACT OF
MANAGING AND MONITORING ISSUES ON CORPORATE
REPUTATION FOR ALL ORGANIZATIONS.

An issue is a potential point of conflict between an organization and one or more

of its stakeholders (CIM, 2012, p 302).) It is also a present problem or concern
that has the potential to influence a brand or organization, furthermore according
to Chase & Jones (1979) who have been credited with coining the term issues
management define an issue as an unsettled matter which is ready for
decision.
According to Dougall (2008) Issues management is an anticipatory, strategic
management process that helps organizations detect and respond appropriately
to emerging trends or changes in the socio-political environment. Organizations
such as MTN Zambia use this process to manage their corporate reputation. This
is further explained by Jones & Chase (1979) who state that, issues management
is a tool which companies can use to identify, analyse and manage emerging
issues (in a populist society experiencing discontinuous change) and respond to
them before they become public knowledge. It is also important to understand
that issues generally have a lifecycle development (Hainsworh & Meng (1988)
and can either fail be resolved- at any time though if it matures meaning
continues. It undergoes four basic steps namely; origin; mediation/amplification
organisation and lastly resolution this of course is over a process of time.

1.1.1 Is the management of issues important for Organizations?

Issues management has the following advantages for an organization such as

MTN and these include; it acts as a strategic tool that helps organizations gain
legitimacy and credibility in their arguments on unresolved matters in addition it
also provides harmonization between organizations and their stakeholders
(Dalton, 2011). Take the story of Apple and the Federal Government of the USA,
the government and the community needed to know what was contained on the
terrorists IPhone involving an attack in San Bernardino (Post newspaper, 2016,
p.18). It further reduces the gap between an organizations performance and the

Page | 7
Managing corporate reputation
CIM No. 38425137

publics expectations. Figure 1 further illustrates this process developed by Jones

& Chase (1979).

Figure 1: Issues management process model

Issues management process model (Adopted from Jones & Chase, 1979)

The monitoring of issues on corporate reputation is imperative for organizations

as it helps to establish how trends are developing within the marketplace. This
will further involve the process of identification those issues and keep monitoring
them, while at the same time analyse those issues that require change, and offer
the necessary strategic options so as to implement those changes and
eventually evaluate the whole process if successful or not.

1.2 CRITICALLY EVALUATE THE EXTENT TO WHICH MTN ZAMBIA

ACTIVELY MANAGES THE ISSUES OF EACH GROUP, AND
DISCUSS ALL STEPS MTN ZAMBIA TAKES TO PROTECT ITS
REPUTATION.
Shareholders are those individuals or groups who depend on an organization to
fulfil their own goals and whom, in turn, the organization depends (Johnson,
Scholes & Whittington 2008, p. 132). Shareholders are pertinent to issues and

Page | 8
Managing corporate reputation
CIM No. 38425137

not companies and with each issue they are likely to differ believes Brady &
Honey (2007, p. 8) and therefore will have different agendas and many disagree
over what constitutes good behaviour by an organization (Palmer & Hartley,
2009). It is important therefore to understand the different stakeholder
expectations and their relative influence on strategic purpose (Johnson, Scholes
& Whittington 2008, p. 133). For this reason, issues have to be successfully
managed raised by each principal stakeholder, so as to either enhance or
maintain corporate reputation.

Employees
MTN through its established union has ensured that a functioning union be
established that looks into the concerns of all its unionised employees and
ensure various avenues have been established to explore the welfare of
employees by undertaking this decision the organization believes that through
this initiative it manages its reputation with its employees very well. However,
most of these established avenues have failed to handle issues such as;
discontent raised by employees over employment rights, labour and the on-
going livelihood after employment. This gap has created discontent among
employees who feel the organization has failed to look after their welfare and
wellbeing.
Palmer & Hartley (2009, p. 346) an organization that does not recognise the
legitimate rights of trade unions maybe denigrated in the minds of many
customers, because they take keen interests in the ethics of employment
practices by organizations

Customers
The established call centres and service centres help manage queries and
concerns raised by customers. MTN By establishing these two platforms has
helped manage customer complaints and hopefully the organizations brand
image and therefore build its reputation. However MTN has suffered bad media
publicity due to its sudden hike of tariffs the story carried by the Zambian
Watchdog (2015) an independent online media house over MTNs Blackberry
tariff hick which has sparked mixed feelings. In order to build its reputation it has
introduced a royalty program where customers can pick favourable tariff
packages based on data usage.
The customer is like a leaf blowing in the wind. You need to respond to them
intelligently, and in real time, and you need to think more humanly says Jason
Hemingway chief marketing officer, Thunderhead (Catalyst 2016, p. 60). By
putting customers concerns first MTN could improve its relationship with its
current customers.

Government
The Government is responsible for formulating policies and regulations for the
telecom sector through its established agencies such as ZICTA and ZEMA. These
agencies ensure that all service providers follow ICT mandated polices to ensure
the general public is protected from exploitation and poor services and ensures
that the environment and its inhabitant are protected. In order to maintain this
relationship and build the organizations reputation, MTN has established a PR

Page | 9
Managing corporate reputation
CIM No. 38425137

department which communicates with these stakeholders at every level of policy

change and strategy. However, the organization has failed to effectively
coordinate and manage issues raised by this stakeholder through customer
complaints. As indicated by ZICTAs Director General Margret Chalwe-Mudenda
(2015), as a regulator its important to ensure that customers receive value for
money for all services received from service providers and any stakeholder
concerns raised should be addressed.

The local communities

MTNs local community is an important part of MTNs stakeholders as they are
either directly affected by the operation of the organization or are somehow are
not affected by it. MTN has contributed to the welfare of its community through
sponsorship, charity events and other promotional campaigns over its products
and services. MTN has used this strategy as a means or step to appear
responsible to its community. However, it does not have a voluntary hazard
elimination campaign in its corporate message as compared to Zamtel.
Organizations should use corporate communication to establish relations with
customers and other stakeholders through environmental issues and also
capitalise on opportunities presented by green consumption (Gummesson 2002,
p. 123; CIM 2012, p. 182)

Intermediaries and suppliers

MTN has taken quite some efforts in ensuring that its intermediaries are supplied
with quality goods and services in an ethical manner, this is managed through
dialogue. It has also ensured that its entire suppliers deliver on time. MTN
believes this step has helped to protect its reputation in the marketplace.
However, these intermediaries and suppliers have often times complained in the
manner in which their concerns are handled by the organization such as late
payments, deliveries and contracts. It has greatly affected the relationship
between MTN and its intermediaries and suppliers.
Many companies have suffered as a result of failure to adequately account for
the needs and wants of intermediaries and the way they place orders for their
inputs has a significant effect on suppliers (Palmer & Hartley 2009, p. 348). It is
therefore important for MTN to resolve this bad image with its intermediaries and
suppliers if its reputation is to be enhanced.

The Financial community

The financial community for MTN includes, shareholders, financial institutions
who either have supported or are currently supporting the organization. MTN has
used annual general meetings as the only time they address concerns raised by
this stakeholder group, however it has proved challenging to get the group on
the side of management.
This stakeholder group according to Palmer & Hartley (2009) have certain needs
and expectation such as dividends and profits and they believe that many
company schemes have failed as they did not meet the needs of this group.

The Press/Media

Page | 10
Managing corporate reputation
CIM No. 38425137

MTN has managed its reputation through in the media when launching a new
product or its business activities. However, the organization has not invited this
media group to come to important events and functions such as conferences and
press releases.

1.3 AN ANALYSIS OF ISSUES WHICH COULD IMPACT UPON MTN

ZAMBIA, BY USING A STAKEHOLDER MAP TO IDENTIFY,
ORGANISE AND PRIORITISE KEY STAKEHOLDERS, AND OUTLINE
THE ISSUES WHICH AFFECT EACH GROUP.
Expectations of stakeholders influence the purpose and strategies formulated by
managers in organizations (Johnson, Scholes & Whittington 2008, p. 153)
However, not all stakeholders will take a keen interest in MTNs affairs so as to
exercise influence and even if they did, however, they would not be able to
exercise that right to constitute a risk (CIM 2012, p. 174). This therefore, poses a
challenge for managers as they are many stakeholders with perhaps conflicting
expectations (Johnson, Scholes & Whittington, 2008, p. 153). Van Riel & Fombrun
(2007, p. 162) identify two ways to resolve this challenge and this includes;
selecting the most relevant target groups and segmenting the selected target
groups. In addition, these stakeholders could be defined on the basis of their
involvement with the organization. (Grunig & Hunt, 1984; Van Riel & Fombrun ,
2007, p. 164)
By using a simple matrix developed by Mendelow (1985) MTN will be able to map
its stakeholders in relation to the power they hold and the extent to which they
are likely to show interest in its marketplace. Figure 2 below identifies these
principal stakeholders.
Figure 2:
Mendelows Power/Interest Matrix

A B
Keep Informed Low
M
onitor Trade Union

NGOs
Power

D
C Manage Closely
Keep MTN Customers High
Satisfied The local
community
The Financial Government
Community
Employees Low
The Media/Press high

Interest

Page | 11
Managing corporate reputation
CIM No. 38425137

MTNs stakeholders in Quadrant D (Key players) are the most important group as
their level of power and interest on the organization activities can be used to
influence their own interest. It is important to involve members of this group
while formulating organizational goals and objectives. While Stakeholders in
quadrant C are the second most important as their level of power is higher
though interest slightly lower unless aroused to use it.

1.3.1 An outline of issues which affect each stakeholder group

The Local community
The local community expects MTN to involve itself much more in the green
campaign initiative and help clean and sensitise about a having pollution free
community without waste products such as old used broken phones and
scratched cards as to reduce global warming. Organizations need to manage the
risk associated with poor environmental practices as well as capitalise on
opportunities presented by green consumption. (CIM, 2012, p. 182)
Government
ZICTA and ZEMA are concerned with the manner in which organizations in the
telecom sector are not managing their environmental assessment programs such
as the erection of signal towers in the community. This is also observed further in
the manner in which most times signal strength is lost during important events
such as large gatherings; sports events, ceremonies and important summits.
Employees
MTNs employee perception is not good as they feel the organization is not
concerned about their welfare and wellbeing because their employment rights,
as well as their on-going livelihood after employment are not addressed
adequately. This has resulted into mixed feelings. Employee behaviour conveys a
powerful impression of what the organization stands for, the value it attaches to
its customers and other stakeholders and also how it selects, develops and
manages its staff. (CIM, 2012, p. 208)
MTN Customers
MTNs Blackberry users believe that the current sudden hikes in tariffs are not
justifiable, as other smart phone subscribers are not affected by it. By
introducing a royalty program for this user group where they pick tariff packages
based on data usage, still does not address the issue they believe. As stated by
Leonard (Catalyst 2016, p. 22) confidence within the organization and with
customers must be built before disaster strikes. The general customer
population also believes the service provider has failed to offer value for money
products and services.
The Media/Press
This stakeholder group believes MTN does not involve them much in the firms
activities as they are often times not given credible information about their

Page | 12
Managing corporate reputation
CIM No. 38425137

business activities, and this has affected how MTNs activities are interpreted via
the local media. This as explained by Hainsworth (1990) leads to how
momentum builds and an issue gets amplified into a public issue. A summary of
key issues and expectations of stakeholders is illustrated in appendix 3.

1.4 RECOMMENDS, WITH JUSTIFICATION, AN ISSUES MANAGEMENT

STRATEGY FOR MTN ZAMBIA WHICH WILL STRENGTHEN AND
PROTECT ITS REPUTATION IN A COMPETITIVE MARKETPLACE,
WITH CONSIDERATION OF THE POLITICAL AND FINANCIAL
CONSEQUENCES OF IMPLEMENTING THE RECOMMENDATIONS.
The advantages of issues management as identified earlier is that its a strategic
tool that helps organizations such as MTN gain legitimacy and credibility in their
arguments on unresolved matters , in addition it also provides harmonization
between organizations and their stakeholders (Dalton, 2011). However, by using
silence as an issues management strategy MTN has not managed to address the
various issues raised by stakeholders identified above. As indicated by Leonard
(Catalyst, 2016. p 22) ''but until the public regains trust that a whole lot more
scandals aren't just around the corner, the institution of brand will remain firmly
in the dock''. This therefore means MTN Zambia will need to adopt another issues
management strategy based on openness to change and learn how effectively it
can manage issues identified by stakeholders.

Recommendation
By adopting an adaptive change strategy Jones & Chase (1979) as summarized
by CIM (2012, p. 311) MTN will be able to anticipate pressure, while initiating
constructive dialogue with its principal stakeholders thus formulate acceptable,
constructive and compromised positions benefiting all concerned. By undertaking
such a decision MTN will be able to address issues raised by its principal
stakeholders and enhance corporate reputation.

Employee engagement
By having annual general meetings, appraisals, functioning unions, reward
systems, staff workshops and periodic consultations will support the adaptive
change strategy, which in itself will enhance reputation as various opinions
would be collected. As illustrated by Bewick (Catalyst 2016, p. 37) the best
brand advocates are to be found among a companys employees, and if excited
by your proposition you are immediately in a strong position.

Consultation with government

Page | 13
Managing corporate reputation
CIM No. 38425137

Establishing goodwill and making sure that all government concerns are
addressed such as paying taxes and following regulations, submitting returns
and corporate literature will help improve negotiations with government and be
helpful when discussing matters.

Financial reports and data

Annual reports, financial regulations and accounts are sources of information that
investors seek to understand. Stakeholders in this case are either external such
as institutional and individual investors, financial media and funders or internal
such as the financial department or legal. By engaging this stakeholder group in
discussions will help build reputation as it forms part of the companys corporate
reputation platform and helps build the corporate story to external stakeholders
(Van Riel & Fombrun, 2007)

Community engagement
The general public expect MTN to engage in discussions with them to hear their
views and opinions on matters that affect them in relation to the organizations
operation in the community including CSR initiatives in place.

Customer Views
Customer direct feed backs and sales performance are tools that could be used
to measure corporate reputation and therefore help protect reputation as they
will provide views of the customer. According to Barrett (catalyst 2016, p. 43) if
you have to change perception you will need to bring people along for the
journey if the brand is to come to life.

1.4.1 Financial and Political implications of Implementation

Financial
In order to improve the current reputation by undertaking the recommendations
made above will certainly cost money in the short term such as the change of
management structures, introducing new systems so as to enhance efficiency,
however, will yield better results in future and enhance competitive edge in the
marketplace and build reputation. In order to access the benefits that would arise
from this implementation a cost benefit analysis would be ideal, as it will support
the communications campaign proposed by looking at the benefits that would
arise through conducting this campaign such as brand awareness, improved
levels of employee trust (retention), increased customer loyalty, government
trust and consequently increased shareholder value due to increased price share
demand.

Political

Page | 14
Managing corporate reputation
CIM No. 38425137

As a result of various changes that would be required to implement

recommendations conflicts will arise. Therefore senior managers must
communicate this message down to employees so that, appropriate strategies
are accepted by all and that all potential internal conflicts and objections are
addressed as a result of these changes. Managers will be faced with the task of
explaining the benefits and desired outcomes to all to ensure smooth running of
business through change management strategies.

Conclusion
Having carried out these recommendations will help MTN build a very strong
reputation which in return will create a strong competitive edge in the
marketplace and build greater shareholder value. It is also important to
understand that reputation is built over time and as illustrated by Woolley (2016)
in his blog is reputation a shared responsibility? He states that, reputation
grows out of the hundred (or million) of individual interactions that take place
between a given organization and the public.

TASK 2
Report
To: CEO
From: Chief Marketing Officer
Subject: Corporate Social Responsibility
Date: 2nd June 2016

Introduction
Every profit oriented organization such as MTN has an obligation to its
shareholders and that is to offer value and return on investment. However,
according to Professor Carroll as summarized by Afuah (2004, p. 244) a firm has
four types of responsibilities; economic, legal, ethical and discretionary, with the
last two being its social responsibility. However, the legal and regulatory
frameworks under which business operate pay uneven attention to the rights of
different stakeholders (Johnson, Scholes & Whittington 2008, p. 146). It is for this
reason organizations use the process of CSR as a means of managing its
reputation with its various stakeholders. As cited by Hitchens in his webinar how
to manage your brands reputation (2016) a strong reputation adds to the

Page | 15
Managing corporate reputation
CIM No. 38425137

overall brand value and it is recognised and is part of the brand evaluation
process.

2.1 CRITICALLY ANALYSE THE CONCEPT OF CORPORATE SOCIAL

RESPONSIBILITY AND ITS IMPACT ON CORPORATE REPUTATION,
INCLUDING A DISCUSSION OF THE MAIN ETHICAL POSITIONS
RELATING TO CSR.
Corporate Social Responsibility is the process by which businesses negotiate
their role in society (Parker 2005, p. 434) and exceed its minimum obligations to
stakeholders specified through regulations (Johnson, Scholes & Whittington 2008,
p. 146). It also provides an insurance like protection when negative events
happen according to many studies conducted (Godfrey et al. 2009; Shuo, 2015,
p. 7). However, there are two sides to this debate as whether organizations
should invest in socially responsible activities or not. One school thinks an
organizations responsibility is the short-term interest of shareholders and to
make a profit, pay taxes and provide jobs (Johnson, Scholes & Whittington 2008,
p. 146) and that the government is responsible for its citizens, while the other
insists that investing in socially responsible activities is a good strategy that can
increase the value of a firms stock (Afuah, 2004, p. 246).
As cited by Shuo (2015, p. 7) the early roots of corporate social responsibility can
be tracked back to 1917 when Henry Ford Founder of Ford motors believed that,
as a company it was its responsibility to do as much as possible for everybody
concerned, to make money and use it, give employment, and send out the car
where the people can use it and incidentally make money. The subject was
further explained by Bowen in his book 'Social Responsibilities of the
Businessman', where he cited the relationship between corporations and society.
(Carroll 1979, Wartic & Cochran 1985, Shuo, 2015, p. 7)
Corporate reputation as earlier defined ''is a collective representation of a firms
past actions and results that describes the firms ability to deliver valued
outcomes to multiple stakeholders. It gauges a firms relative standing both
internally with employees and externally with its stakeholders, in both its
competitive and institutional environments. (Fombrun & Rindova, 1996;
Fombrun & Van Riel 1997, p. 10) This explains why organizations engage in CSR
initiatives believes Palmer & Hartley (2009, p. 349) so as to show they have a
role to play in the community and should do something special. A good example
is Digi.Com another service provider in the telecom sector in Malaysia that spent
over 15% in 2001 of its operating expenses on CSR activities (Mohamed, 2005).
A good corporate reputation is believed to offer a unique selling proposition and
investment domain (Palmer & Hartley 2009, p. 349). This reputation is built
through sound CSR initiatives (Parker, 2005) which results into hiring and
retaining highly motivated quality employees. It also helps create a good image
to the global public and relates to improvement of business performance (Palmer
& Hartley 2009).
Furthermore, Organizations use the process of CSR as a means to operating in an
ethical manner and hence meet expectations of stakeholders. It is on this basis
that ethics are grounded in moral philosophies that help organizations such as
MTN discern between what is right and wrong (Parker, 2009. p 442).By engaging
in an ethical responsible manner, organizations meet the expectation of society

Page | 16
Managing corporate reputation
CIM No. 38425137

over and above the basic economic and legal requirements of organizations (CIM,
2012 p. 180). A very good example is a case that involves Mitsubishi the
Japanese motor company the company come out clean on cheating emission
tests as opposed to VW, they never faced a huge scandal though they have been
cheating for the past 24 years. As cited by Lise Kjaer on Aljazeera (2016)
organizations have a responsibility to its customers and need to provide accurate
information. This in itself is taking an ethical position; a corporate social
responsibility continuum adapted from Parker (2005) in appendix 3 illustrates
how an organization fares if it embraces CSR initiatives.

2.2 CRITICALLY APPRAISE THE CURRENT CORPORATE SOCIAL

RESPONSIBILITY STRATEGY FOR MTN ZAMBIA, AND EVALUATE
THE EXTENT TO WHICH THE STRATEGY IS IMPLEMENTED AND
SUPPORTED BY KEY STAKEHOLDERS.
From the above it clearly states that a lot of issues have been raised that affects
these key stakeholders. However, MTN has continued to engage in corporate
sponsorship as its main CSR initiative. MTN uses this platform as a means to
show that they are part of the community and are interested in supporting local
events and activities such football through the MTN Cup, arts and culture
including traditional ceremonies such as the Kuomboka ceremony of the Lozi
people and others. By sponsoring these events, MTN believes that the target
market will be exposed to its corporate message it intends to send in return build
corporate reputation with its stakeholders. According to Runsbech & Sjlin (2011,
p. 1) sponsorship allows organizations get exposed to media and the general
public in other fields than its specific target market, and thus exposes itself to
new consumers outside its target segment .
By sponsoring a sport event or local activity enables organizations build an
association to their products or services while sharing the brand experience with

Page | 17
Managing corporate reputation
CIM No. 38425137

its consumers (Runsbech & Sjlin, 2011). MTN believes corporate sponsorship is
the best strategy for implementing CSR initiatives. By association MTN believes
that positive responses and emotion connection can be drawn with enthusiastic
supporters, while through exposure connection can be drawn between the brand
and the event. While through integrated communications MTN believes it will
enhance the experience of the sponsorship thus help build positive relationships.
However, this strategy is not well implemented by the various key stakeholders
as their concerns are as the following;
Government
ZICTA and ZEMA expect MTN to coordinate with them and carry out the
necessary environmental assessment programs before the erection of signal
towers in the community, and comply with regulations. For this reason the
government has not been clearly supportive with the organizations CSR
initiatives because it believes that, MTN needs to address its environmental
activities first before sponsoring any cause.
MTN Customers
The general customer population supports the sponsorship CSR initiative it has
taken as an organization. However, they still believe that the service provider
has to offer value for money products and services even though they attend
these events and at the same time tariffs must be affordable to the poor.
The Local community
The local community wants to see MTN involve itself much more in the green
campaign initiative and help clean and sensitise the local people about having
pollution free communities. MTN should take a leading role in ensuring the
disposal of waste products such as old used broken phones and used scratched
cards are disposed of in a clean and safe way. It is for this reason they are
insisting that they adopt a green campaign initiative so as to look after the
environment even though they support the role the organization takes in
sponsoring local events.

Employees
The general perception by employees is not good as they feel the organization is
not concerned about their welfare and wellbeing because their employment
rights, as well as their on-going livelihood after employment are not addressed
adequately. This has led to low motivation experienced by the organization from
its employees. Employees believe that before those funds are invested in
sponsorship activities, their welfare must be addressed so as to increase
productivity and efficiency.
The Media/Press
This stakeholder group believes MTN does not involve them much in the firms
activities as they are often times not given credible information about their
business activities. This has posed a huge challenge for most of the events the

Page | 18
Managing corporate reputation
CIM No. 38425137

organization undertakes through sponsorship, it is so because the media house

expects to be involved through press releases, conferences and purchased air
space when undertaking any activity.

2.3 CRITICALLY EVALUATE THE EXTENT TO WHICH CORPORATE

SOCIAL RESPONSIBILITY IS EMBEDDED WITHIN THE IDENTITY
OF THE ORGANIZATION, AND CONSIDER HOW GENUINE CSR
EFFORTS ARE.
In order to enhance reputation organizations should understand factors which
contribute to a good reputation in the eyes of stakeholders. However, this is not
the case with MTN because a lot of issues that affect its stakeholders as
illustrated above are not been addressed. Brady & Honey (2007, p. 8) believe
that stakeholders are pertinent to issues not the companies and that with each
issue they are likely to differ and this is the current case with MTN and its
stakeholders. The reason is simple MTNs values through its CSR initiatives are
not fully embodied in the overall organizational culture as they are tactical in

Page | 19
Managing corporate reputation
CIM No. 38425137

nature so as to only seem or appear good in the eyes of the sponsored.

According to Parker (2005, p. 437) corporate giving will fail to build reputation if
at all the organization fails to live to its philanthropic image or if consumers
perceive philanthropy to be manipulative as is the case because it fails to
address the various issues raised by stakeholders.
Corporate sponsorship though looked at as a means to build brand equity
through CSR initiatives by organizations; it is often times seen as a means that
will eventually materialise in sales (Hansen, Martensen & Riis Christensen, 2005).
As illustrated above, the current CSR initiative for MTN is not genuine because
they are trying to cover up on their gaps in their business activities. Sponsorship
only offers an attachment with a set of individuals who have the passion for that
event. According to Alexandris & Tsiotsou (2007) these individuals are likely to
develop positive images about the sponsor and will express willingness to buy its
products, but however only a fraction of MTNs key stakeholders are willing to
support this CSR initiative and interact with the brand thus build good corporate
image. A good example is that of Nike the shoe maker, the company has been
caught up in a scandal in Kenya where it is believed that hundreds and
thousands of dollars meant to support poor Kenyan athletes whose dream is to
run their way out of poverty disappeared from a named bank account. Kenyan
authorities as stakeholders are wondering why such a huge one time
commitment bonus was given to the federation in the first place, yet the funds
were meant to support the federation Gettleman, New York Times, 2016.
With this in mind, MTN would need to develop a CSR initiative strategy that
matches with the organizations corporate objectives with its stakeholders
expectations. A compromise has to be reached by the organization if it wishes to
remain competitive which in return would help build reputation. In traditional
CSR initiatives like corporate sponsorship, the sponsored is the primary
beneficiary of corporate largesse. However, by engaging in matters that affect all
key stakeholders perhaps help MTN build a credible reputation.

2.4 RECOMMEND, WITH JUSTIFICAION, A CORPORATE SOCIAL

RESPONSIBILITY STRATEGY THAT WILL SUPPORT THE
ORGANIZATIONS OBJECTIVE AND PROTECT ITS REPUTATION,
MAKING REFERENCE TO THE POLITICAL AND FINANCIAL
CONSEQUENCES OF THE RECOMMENDATIONS.
Recommendation

Page | 20
Managing corporate reputation
CIM No. 38425137

Brady & Honey (2007, p. 11) believe that in order to have successful CSR
initiatives, organizations should build their CSR initiatives into the organizations
corporate strategy. This is done by ensuring that MTNs values are formulated in
its overall corporate culture and behaviour of what it can and cant do. MTNs
corporate objective is to facilitate communication in the digital age. MTN has
established three pillar agendas to achieving its objective; Consolidation and
diversification; Leveraging of MTNs footprint with an understanding of
intellectual capacity; Convergence and operational evolution in the market place

Looking at the various issues raised by stakeholders, the best strategy MTN could
develop is an integrated strategy driven initiative. An integrated strategy driven
CSR initiative gives companies such as MTN an ethical shield that they can use to
deflect criticism because they would involve themselves in a better cause that
matches with the norms and demands embraced by their main stakeholders
(Catalyst 2016, p. 53). Mcwilliams & Siegel (2011) as summarized by Shuo
(2015, p. 10) observe that CSR which is embedded in an integrated strategy
driven initiative is labelled as a Strategy CSR initiative, as it helps
organizations who have taken this initiative to pay more attention to their ethical
aspect if at all they do not wish to be undermined and lose their credibility and
legitimacy (Lawton 2011, p. 8; Shou, 2015, p. 10). Below are some CSR activities
it can integrate so as to manage its reputation with stakeholders.

Green campaign
Environmental management would easily be incorporated within the
organizations capabilities and resources as it forms the strategic and innovative
objective of MTN through its products and services. By focusing CSR activities on
pursuing the green campaign initiative and also ensure environmental
assessments are carried out before signal towers are constructed. Through its
green campaign it could advocate for the following;

Pollution control
It is important also that MTN advocates for a clean environment by channelling
every K1 through every top up recharge to help clean up communities. See
appendix 6 for some of the environmental activities initiated by Rockview
University which MTN could adopt.

Invite Media house

Its important those media houses are invited for press conferences and releases,
as this would help build corporate reputation as the event is been televised or
broadcasted a wider audience is been reached.

Employee engagement
By having annual general meetings, appraisals, functioning unions, reward
systems, staff workshops and periodic consultations will enhance reputation as
various opinions would be collected. This of course will help also develop a
genuine CSR initiative that employees will support

2.4.1 Financial and Political implications of Implementation

Financial

Page | 21
Managing corporate reputation
CIM No. 38425137

With regard to the financial implications, the recommendations and suggested

improvements shall surely cost the organization such as purchase of
environmental friendly equipment and the change of management structures.
However, it is important to consider the benefits to be sort out from such a
decision such as; increased shareholder value, competitive advantage, increased
market share, increased brand and product awareness and corporate reputation.
For this reason, a cost benefit analysis would be an ideal tool and of course
coupled with monitoring and evaluation of the new strategy. All this should be
explained to shareholders and employees so as to support the new strategy.
The below diagram adapted from (Reichheld, 2001) illustrates that a good
reputation may pre-condition MTN employees and its customers, to expect a
positive interaction or transaction with the organization (CIM, 2012, p. 21) this in
itself will help build reputation with various stakeholders such as; investors,
customers, employees and will invariably lead to profits, cost advantages and
superior productivity.

Surplus Customer
cash loyalty

Investor
loyalty Superior Growth
customer

Profits

Superior
rewards

Cost
advantages
Superior Employe
productiv e loyalty
ity

Figure 5: The loyalty based cycle of growth model for effective corporate
identity (adapted from Reichheld 2001; CIM 2012)

Political

Page | 22
Managing corporate reputation
CIM No. 38425137

Due to the various changes that would be required to implement this strategy, a
lot of issues will result which shall cause conflict. The conflicts will arise within
the organization between finance and possibly shareholders and other internal
stakeholders as to which environmental activities communities are best eligible
to receive attention or possible redesign. In addition, organizations driven by
profit such MTN, will require a different behavioural culture and embrace
goodwill. Therefore benefits must be explained to all concerned within the
organization including Shareholders, senior management and employees the
importance of this activity to the organizations reputation and its responsibility to
the community.

Conclusion
As illustrated by Fombrun & Van Riel (1997) reputations are difficult to duplicate
because they drive from the unique internal features of firms and since they are
also externally perceived they remain largely outside the direct control of firms
managers, however managers have the responsibility to formulate corporate
social responsibility strategies that can help build good reputation in the minds of
the public. As stated by Bewick (2016) getting your customers to say good
things about you remains a remarkably powerful and persuasive tool of
reputation management, especially when their words look like an honest
appraisal of your goods or services.

Page | 23
Managing corporate reputation
CIM No. 38425137

APPENDIX 1
MTN ZAMBIA
Brief Background
In the year of 1994 MTN was launched as a communication services provider.
The giant service provider offers cellular network access and business solutions
to its vast market. As a result of building this successful operation in South
Africa, the organization has achieved a market share of approximately 38 per
cent. The expansion of this giant service provider began in 1998, when it
expanded its operation into the rest of Africa and became the only South African
cell phone network operator to reach other parts of Africa. The expansion was
significant for the organization irrespective of various uncertain political
landscapes, this resulted into capturing huge market opportunities in Africa.

MTNs mobile licenses spreads across over a vast number of over 22 countries in
Africa, the Middle East is no exception by 31st March 2015, the organization had
recorded more than 230,997 million subscribers as reported by MTN Group Ltd
(2015). Furthermore, MTN Group is a JSE listed multinational company.

Vision: To lead the delivery of a bold, new digital world to its customers

Mission: To make its customers lives a whole lot brighter.

The MTN Group has operations in at least three key regions:

South and East Africa (SEA):

MTN South Africa, MTN Swaziland,
MTN Zambia, MTN Uganda, MTN Rwanda and Mascom Botswana.

West and Central Africa (WECA):

MTN Nigeria, MTN Cameroon,
MTN Guinea-Bissau, MTN Guinea Conakry and Lonestar Liberia.

Middle East and North Africa (MENA):

MTN Irancell, MTN Afghanistan, MTN Cyprus, MTN Sudan, MTN Syria and MTN
Yemen

MTN ZAMBIA

MTN Zambia was successfully established in 2005 after MTN Group finalized the
acquisition process of Telecel Zambia. MTN Zambia Limited operates as a
communications and network access company in all 10 provinces of Zambia.
The company has continued to grow becoming the preferred number one mobile
network service provider in Zambia. This has been achieved as a result of
improved innovation towards tailored products and services in the telecom
industry, this has further been illustrated by the companys commitment towards
corporate social responsibility activities throughout the country. MTN foot print
country wide can be felt as it continues to offer various products and services

Page | 24
 Managing corporate reputation
CIM No. 38425137

which, in return has encouraged entrepreneurship skills with the local

communities through TUNTEMBA
Product/Service Range

It offers mobile data services that enable users to connect Internet and
send or receive emails on mobile phone, laptop, or PC; mail to mobile,
which provides access to emails, calendar, contacts list, and scheduled
tasks;

The mobile email enables users to send and receive emails on a mobile
phone through various network, such as GPRS.

The company also provides pre-paid, post-paid, per-minute rate, top

up, and per second plus services and mobile money facilities in
addition it also offers 4G services

In addition, it offers call forwarding, direct deposit, and voicemail, call

waiting, call barring, conference calls, calling line identity, and call me
back, SMS2email, and email2SMS.

It offers drive sure services (insurance package with Hollard Insurance),

Facebook zero package allowing subscribers to use smartphones to surf
Facebook for free anytime.

Customer Base

MTN Zambia has a subscriber base of 4.9 million people which ranges from
Government, corporate, hospitality, Education and financial services including
the defense force offering various services to all these sectors.

Position in the Market

MTNs strategic agenda is: To be the market leader in the

telecommunications industry. The strategy is built on three key pillars:
Consolidation and diversification;
Leveraging of MTNs footprint with an understanding of intellectual capacity;
Convergence and operational evolution in the market place.

As a market leader MTN Zambia takes about 48% while Airtel Zambia has
approximately 37% market share and lastly Zamtel commonly known as CellZ
takes only 15% of the market.

Organization Structure
Chief Executive
Officer

Operations & Finance Legal Issues Corporate Sales &

Page | 25
Services Director Director Communicat Marketing
Director ions Director
Director
Managing corporate reputation
CIM No. 38425137

Human R&D
APPENDIX 2 Resources Director
Director
BIBLIOGRAPHY
JOHNSON, G., SCHOLES, K. & WHITTINGTON, R., (2008) Exploring Corporate
Strategy.8th Edition. England. Prentice Hall Imprint.

Dr. Brady, A & Honey, G. (2007) Corporate Reputation perspective of measuring and
managing a principal risk. London: The Chartered I statute of Management
Accountants.

AFUAH, A. (2004) Business Models: A Strategic Management Approach, P. 244-

255 McGraw-Hill Education. New York
B. Parker (2005) Introduction to Globalization & Business Relationships and
Responsibilities. SAGE Publications London.
Palmer, A. & Hartley, B (2009) The Business Environment. Six Edition McGraw
Hill Education (UK) Limited Maidenhead Berkshire.
AFP. (2016) Apple, US government to face off in court over iPhone privacy. The
Post Newspaper. 22nd March.
CIM The Catalyst-Shaping Marketing Futures (2016) Brand Experience Promise or
reality? Issue 2. P, 11-60. Maidenhead, Berkshire. UK
CIM The Catalyst- Shaping Marketing Futures (2016) Navigating a Digital World.
Issue 1. P, 52-54. Maidenhead, Berkshire. UK
Times of Zambia. (2015). BUSINESS Times. ICTs key to economic prosperity.
th
(16 September 2015) Page 5.

CIM (2012) Managing Corporate Reputation for assessments up to September

2013. BPP Learning Media Ltd. London

Mary Welch & Paul R. Jackson, (2007) "Rethinking internal communication: a

stakeholder approach", Corporate Communications: Available from:
VAN RIEL, C. B. M. & FOMBRUN, C. J (2007) Essentials of Corporate
Communication. [Online] Available from:
https://lib.myilibrary.com/ProductDetail.aspx?id=91806. [Accessed on: 18th April
2016]
WOOLLEY, S. (2016). Is reputation a shared responsibility? [Online] 06th May
2016. Available from: http://exchange.cim.co.uk/editorial/is-reputation-a-shared-
responsibility/ [Accessed: 9th May 2016]
RUNSBECH, A. & Sjlin, D. (2011) Negative effects of sponsorships. A
quantitative study on negative effects of image transfer through Sponsorship in
the U.K [Accessed: 9th May 2016]

Page | 26
Managing corporate reputation
CIM No. 38425137

BEWICK, M. (2016) How to boost B2B reputations. [Online] 13th May 2016.
Available from: https://exchange.cim.co.uk/blog/how-to-boost-b2b reputations/
[Accessed: 20th May 2016]
HITCHENS, P. (2016) How to Manage your Brands Reputation. [Online: 26th April
2016] Available from: https//exchange.cim.co.uk/webinar/practical/-insights-how-
to-manage-your-brands-reputatio/ [Accessed: 23rd May 2016]
Dalton, J. (2012) Reputation and Strategic Issue Management. Available from:
http://www.financepractitioner.com/business-strategy-best-practice/reputation-and-
strategic-issue-management?full. [Accessed: 10th May 2015]

Ph.D. Dougall,D (2008) Issues Management [Online 12th December] Available from:
http://www.instituteforpr.org/issues-management/ [Accessed: 10th May 2015]
Available from:
https://www.mtn.com/MTNGROUP/Documents/Profile2015/index.html [Accessed:
10th May 2015]
http://www.emeraldinsight.com/doi/full/10.1108/13563280710744847 [Online] an
International Journal, Vol. 12 Iss: 2, pp.177 198 [Accessed: 18 th April 2016]
Rodoula Tsiotsou & Konstantino Alexandris (2007) Delineating the outcomes of
Sponsorship: Sponsorship image, word of mouth & purchase intentions .
[Online] Available from:
www.emeraldinsight.com/doi/full/10.1108/09590550910948583.Vol 37iss:4, pp.
358-369. [Accessed on: 18th May 2016]
ANNIE LISE KJAER (2016) Interview on ALJAZEERA on 21st April 2016. Mitsubishi
has admitted to cheating emissions test.
SHUO, W. (2015) Chinese Strategic Decision-making on CSR. [Online] Available
from: http://www.springer.com/gp/book/9783662449967 [Accessed on: 6th June
2016]
GETTLEMAN, J. (2016) Money Given to Kenya, Since Stolen, Puts Nike in Spotlight
[Online] Available from: http://www.nytimes.com/2016/03/06/world/africa/nike-
under-scrutiny-as-payments-for-kenya-runners-are-drained.html?_r=0 [Accessed
on 9th June 2016]

Page | 27
Managing corporate reputation
CIM No. 38425137

APPENDIX 3
Perception and attitude of stakeholders

Page | 28
Managing corporate reputation
CIM No. 38425137

current perception & stakeholders

stakeholders
attitudes objectives

value for money

rate tariffs are quality services
expensive and products
customers
poor network deliver customer
coverage service and
promise
conform to heath
and safety
company does not standards
Employees care for thier bonuses and other
wellbing salary packages
poor labour laws should be provided
and condition of conform to
service employment law
regulations and
engage with
unions (creating
The Media/Press shared value )
No communicated expect to be
to by MTN communicated to
by organisations
through press
lease s etc
expect
organizations to
Government non compliant with buy media space
regulations and tax's should be
polices paid
meet standards
and be a good
corporate citizen
Community look after
recharge cards customer concerns
used are non-
biodegradable environmental
friendly waste
management
programs should
be in place
expect jobs to be
provided by
organization

APPENDIX 4

Page | 29
Managing corporate reputation
CIM No. 38425137

organizations use CSR initiatives differently, those that have no CSR initiatives
occupy the last three positions on the left of the continuum, while an
organization that exceeds the CSR minimum is on the far right side of the
continuum. Having put up CSR processes in place will help MTN build strong
corporate reputation and help achieve profits while remaining socially balanced
in its objectives.

Figure 3: A corporate social responsibility continuum (adapted from

Parker, 2005)

Page | 30
Managing corporate reputation
CIM No. 38425137

APPENDIX 5
Clean-up Campaign, Lusaka Zambia

Source: +260977526971, Clean up campaign on the streets of Freedom

way Lusaka Zambia, 25th May 2016.

Page | 31
Managing corporate reputation
CIM No. 38425137

Page | 32
Managing corporate reputation
CIM No. 38425137

Page | 33