On the 14th of April, Giuliano Chiara and Reghuvaran Niranjan Nair, Pachu for friends, had the opportunity to interview Younger Rupert, founder and director of the Centre for Corporate Reputation of the University of Oxford and co-author of the ”Reputation Game”. The questions and comments were made based on personal researchers. The last part was dedicated to the angle of the ‘questions of the readers’.
The interview done can be read below.
Giuliano Chiara: During the Adnoc Communication Forum of 2019, you have said that the sector related to the concept of oil and companies against the climate interests is a ‘pariah sector’. What did you mean? Is it also applicable today?
What I meant with the term ‘pariah sector’ is that it is a sector of the economy where there are a significant number of negative social evaluations to which a ban is sometimes applied under international law. Examples are pornography, weapons, arms, and tobacco.
The energy sector is a pariah sector because its sources and products are under huge scrutiny and debate for the important role that it covers. It provides infrastructure which gives us heat, light, and the ability to survive in harsh seasons. As opposed to original fossil fuels, it is also at the forefront in the massive drive to reduce carbon emissions and to move towards renewable sources of energy.
Pariah sector such as global finance is a concept that can be tracked also in the past. It can be found in the ‘Merchants of Venice’ and in the conception of the moneylenders of the 17th,18th that had quite negative social evaluations on the idea of money and finance. After the financial crisis of 2008 when taxpayers all over the world had to bail out, their financial institution’s global finance risked becoming again a pariah sector.
Reghuvaran Niranjan Nair: Regarding this point, many discussions about finance bring forward the perception that this sector is going to fall in the next few decades or by the end of the century. How do you react to this statement?
Finance is an integral part of all of our daily lives. The way we interact with our financial capital, the mode in which we can access it and deploy is critical. Finance according to me will not disappear but will radically innovate and change. An example is China. As a country, it has incurred innovations in the financial groups, around the payment system and the people now interact with their financial capital in very very fast liquid ways. I think this is going to be a trend that only accelerates. We have seen innovations in the payment systems through different routes like Paypal as well as in innovations in mega projects. We have also assisted in the introduction of new currencies like Bitcoin. Finance is going to stay, but it will continuously be subject to a lot of regulatory and political scrutiny.
Giuliano Chiara: I am aware of the great study of algorithms at Oxford University. In my view, user prediction algorithms are potential indicators of the personality of different individuals. I believe that such data can be used in respect of individuals in hijacking them to make them have a perception of the entity in a certain guided way. Does this view apply to reality? What do you think about a financial entity’s idea to influence its image perception in the mind of its audience using the mentioned data? What could be the best way to get a good perception in the eye of the viewer according to the core values that characterize the entity?
The algorithms can be used to shape perceptions. They capture, distill and interpret data. I call data the new oil. They are the most valuable commodity in the world enabling us to make advanced decisions and predict things. Though they are sometimes at risk of being abused, algorithms connect the users in incredibly powerful ways if used correctly. Organizations on the other hand can also capture data in inappropriate ways and use them to be intrusive. Algorithms and AI attach themselves to blocks of data in making interpretative judgments. In recent years, reputation economies have emerged driven by artificial intelligence and technologies like Uber. The rating system of Uber is applied also to eBay, Airbnb, Tripadvisor which are systems that use data and algorithms to capture views from users, make social evaluations and create a pricing market. For example, eBay rates a seller with a point of 3.4; this rating will be then used to create a pricing market value.
On the second part of the question that you have just asked me, the answer is yes. Financial entities can influence their image ,even if they cannot control it, on three layers. The first one is the smart use of AI to collect good data and then render the creation of narratives informed by data that influence the way people see.
The second one is related to predictive algorithms. Predictive algorithms can be used to establish certain networks like productive ones. For example, here we have some research at Oxford looking at how reputation flows through networks. If the information flows very fast between the members of the networks there is high reputation content. If the information does not flow, it instead means there is low reputation content. The idea of flows is applied to establish reputations.
The third is the behavioral signal. It can be perceived as a signal of poor corporate capability or as a signal of poor corporate character. When the AI is used wrongly to do bad things the behavioral signal that is analyzed arrives as a signal of poor corporate capability. When instead the organization uses AI and doing so captures data inappropriately and then tries to sell to the customers something shouldn’t be done this is perceived as a signal of poor corporate character.
Finally, for the third part of the question, an entity has to be authentic to get a good perception in the eye of the viewer. To be seen as one with high integrity and strong humanity, one has to act in that way.
Reghuvaran Niranjan Nair: Taking Tesla as an example, from the perception of an outsider, its reputation comes from multiple different fields and markets and it is linked to the figure of Mask that picture it as a sustainable reality. Musk is not usually a guy who fits into the classic stereotypes of a superstar but the narratives of his companies are closely linked to him. From the seven theories of narratives, where is it most suitable to the narrative of Tesla?
One of the core concepts is that organizations have multiple reputations. For example, you may think of Tesla as innovative, sleek, and environmentally friendly while I may think of Tesla as abusive and trampling over workers’ rights. The narrative of Tesla and Elon Musk is ”Let’s achieve something incredible. Let’s take something so far impossible and make it possible. Let’s create incredible electric cars which are going to be within high performance”
Giuliano Chiara: During review processes, the products of a company may be severely criticized by its users. How can we limit the damage that can be caused to the quality image of the products? How long can a bad behavior or good one be covered up with perceptions in your opinion?
If there’s criticism of products or product quality, the first thing an organization has to do is to look at the causes of the critics. If the product is bad, then the first thing to do is to fix it. One has not to try to downplay it but has to sort the source problem out. Looking at two examples through the diagnostic lens of perceptions, capability and character, the case in which the product is bad is perceived badly in terms of capability. On the other hand, when the company doesn’t act quickly or doesn’t want to change, it is perceived as a bad one in terms of character.
On the second part of the question, in normal cases especially with the hype of connectivity of today, generally when a company produces bad products and doesn’t respond quickly and in actual terms, one discovers it in a short period. However, there are some exceptions. An example is Bernie Madoff, the largest fraudster imprisoned for the fact that he ran the largest Ponzi scheme in Us history. During the interview that I’ve done with him, he told me that he traded fraudulently from the 1990s to 2008 ( the year when he got caught). According to the prosecution of his trial, they argued that he had started in 1970. This makes Bernie Madoff in any case a person that has managed to hide that for well over 20 years.
‘Questions of the Readers’
How can one leverage reputations in international economic development?
I think reputation lies in the interception of information flow between donors and international aid, international communities, the recipients and finally the beneficiary community.
Reputation has its biggest power when there is an uncertain market with a lack of full transparent information or big information asymmetry between beneficiary communities and international donor communities.
Reputation plays a huge role when it also comes to the information flow of need related to the redistribution of resources by international donors. Incredibly powerful reputation mechanisms are put in place in the organization of a reputation campaign that just highlights the desired issue. An example of this is the advertising where young children unable to see are accompanied with the written sentence ”for one pound a month you can make people see”. For this reason, the biggest road for campaigning organizations and organizations interested in the beneficiary community or nations states to leverage reputations is campaigning, using media, and building reputational capital for their cause.
The international communities, on the other side, are subject to a huge amount of reputation evaluation. In the UK for example, we have historically committed a national government to contribute 0.7% of GDP every year to the international aid budget. The fact that the government has said that the number is going to come down from 0.7% to 0.5% had a big impact on the reputation of the UK government as one of the leading supporters of internationalism and aid. This step was mainly done for reputational concerns related to the perceived image of the UK’s charitable public. A similar phenomenon happened to the Bill and Melinda Gates Foundation. For external pressure, reputational concerns the organization had to evolve its strategy related to the approach of the medical interventions towards the diseases of the planet-finding ways to talk about their governance, how they’re working with governments and experts to try and establish priorities.
How can we motivate the huge polarization that is now present in the political field? What can politicians do to break from the idea that all politicians have a bad reputation? How can their reputation be changed when it is difficult in the mind of polarized people?
This can be linked to two different prospects. One is on how civil society engages with policy-making and lawmakers who are under huge scrutiny. This scrutiny is being applied to lobbying and policymaking pressures of politicians that are growing. In my view is right cause this is a potential democratic deficit.
Regarding the second part of the question first I think that politicians have historically quite a low reputation score linked to the compromised nature of politics. But this is done in the public eye and so it is funded by the public putting them at reputational risk. Secondly, in my view polarization is a big problem linked to big tech. Social media companies have boosted the antisocial, polarized component of individuals. They have produced a bad-tempered polarised ignorantly certain discourse on absolutely critical issues. In it, algorithms also played a part
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