Monday, December 03, 2012

Measuring Reputation - a day in the life of Starbucks

In a post in Google+ I have made a point that the internet (not just social media) shows how, in an age of wider transparency and at a time when mining Big Data is getting easier, corporate governance is coming under closer scrutiny.

Here, I show measurable effects on reputation, SEO, social media budgets and financial PR.

Today, Starbucks is in the news for its tax avoidance policies which have collected opprobrium in social media the press and, today, from a Parliamentarians.

Sky reported it thus:

MPs on the Public Accounts Committee criticised the companies for the "unconvincing and, in some cases, evasive" evidence they gave on why their corporation tax payments are so low.
Starbucks told the committee it had made a loss for 14 of the 15 years it has operated in the UK, a claim the committee said it found "difficult to believe".

In my G+ post, I noted

The new rules of corporate governance have arrived.The ability of the public and politicians to both look closely at organisations (both have transparency tools at their disposal) means that ethical judgements are made by both groups to question corporate governance......
This is an example of Big Data analysis (search numbers) in action. We shall see much more of this as the norm going forward.

The tiny bump in Google search today is interesting. It shows search for the Starbucks tax issue of the order of 5%.

When interest in a subject is this big, it has an impact elsewhere on the organisation too.

Starbucks has a big internet presence in the UK, much more than most organisations. In search terms it sits between Pepsi and Waitrose. The work done in SEO and social media is a significant marketing investment which is being blown off course by this issue.

Indeed, semantically (using Google's Keyword Tool) , Starbucks is now associated with these semantic concepts: "tax, avoidance and green".

This semantic association affects search results.

In addition these impacts feed into Big Data analysis among a number of financial trading houses.

This means that these is now a lot of work that needs to be done on the NY stock exchange.

What we see here is the fallout from a corporate governance issues.

Here then is the dilemma. Ethically, the company has to satisfy the demands of shareholders. At the same time it is under pressure to compromise with constituents online, in the press and among parliamentarians.

Is this a case of the ethical imperative being the long term interest of the shareholder? This may mean, the company does not need such agressive tax avoidance policies and can thus protect reputation.  If so, where lies automated trading and a long history of tax management.

Do organisation now have to look at optimal management to ballance the many interests of so many well informed constituencies?

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