Who doesn't love a scandal? Pretty much every company has had its fair share of scandals over the years. From Primark, Uber and Samsung to high-end fashion brands like Louis Vuitton, Dior and Dolce&Gabanna, all brands from completely different sectors have been part of a scandal.
From what I have learned in this weeks lecture, there are 3 ways a corporate scandal can go:
The shareholders will directly punish the company, inevitably causing it to go bust
The shareholders will punish the person responsible rather than the company as a whole and, therefore, the company will survive. However, this usually leads to the chairman or CEO being kicked out or forced to leave!
If the public thinks the reputation is too damaged, then the shareholders will pick up on this and abandon the company, yet again.
What I learnt from these 3 outcomes is that the survival of a scandal is never fully in the company's hands. It is the shareholders and stakeholders who decide how to deal with the issue.
As an example, I am going to be discussing what used to be one of my favourite brands Victoria's Secret. This American based lingerie, clothing and beauty retailer came straight to mind when thinking about this touchy topic. From transphobia, body shaming and lack of racial diversity to child labour allegations and lack of transparency on environmental statistics and information, VS has never shied away from a scandal that's for sure!
It was only about time that The Victoria’s Secret Fashion Show was officially cancelled in 2019. This was due to the rapid decline in sales and show ratings. In my opinion, the last VS scandal was the last straw for this "angelic" brand.
Victoria's Secret Chief Marketing Executive, Ed Razek made this following transphobic comment in an interview:
"It’s like, why doesn’t your show do this? Shouldn’t you have transsexuals in the show? No. No, I don’t think we should. Well, why not? Because the show is a fantasy. It’s a 42-minute entertainment special. That’s what it is.”
This comment sparked outrage in the transgender community as well as thousands of VS customers and created a big social media backlash and controversy that VS simply couldn't recover from.
To conclude, I would say the public perception of VS was extremely influential in the cancellation of the show. Victoria's secret reputation was damaged beyond repair!
Can you think of any companies that have gone through one of the 3 scenarios above?
What is one scandal you will never forget?
Comment down below to get the conversation started!
Thanks for reading!
References:
DANIELL, P., 2020. 7 Fashion Scandals That Showed Us The Dark Side Of The Fashion World. [online] Missmalini.com. Available at: <https://www.missmalini.com/2018/12/28/7-fashion-scandals-that-showed-us-the-dark-side-of-the-fashion-world/> [Accessed 21 October 2020].
MCLEOD, I., 2020. The Bigger Problem With Victoria'S Secret - 5 Reasons To Boycott This Terrible Brand. [online] Muccycloud.com. Available at: <https://www.muccycloud.com/2018/12/boycott-victorias-secret.html> [Accessed 21 October 2020].
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