Reputation Risk Management
Reputation of companies forms one of the most vital components that companies rely on for their survival in business amidst the rapid rates of competition today. It is due to this fact that most of the firms that are most vulnerable to the public perception have their name and goodwill at very high risk levels. As a matter of fact, financial and insurance companies form the crème of the organizations that rely heavily on the image that they portray to the public. Actually, it has been assessed that the more the range of services offered by an organization, the higher are the reputation risks involved since the firm has bigger economies of scale. Greater risks arising from conflict on interests among the managers may result to a firm having its reputation highly compromised amidst a scandal. The compromise of the reputation of a firm may adequately lead an organization into having the customers fleeing away and as a consequence of this; the investors in the organization may have the risks that they associate with their shares in the firm increase proportionally.
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