Sexual harassment is nothing to laugh about. It makes you feel insecure. It makes you feel vulnerable. It makes you feel powerless. One of my closest friends was being sexually harassed at one point in time and she only told me weeks after it occurred because she was too embarrassed. I didn’t understand why she would feel embarrassed when it wasn’t her fault – it was his. She was distraught; she told me she could’ve stopped it and began questioning herself. I didn’t exactly know what to think about this topic then, but I do now.

It all started with Harvey Weinstein; one of Hollywood’s biggest producers. What the public didn’t know was that he had been sexually exploiting women for decades. However, on October 5th, the floodgate doors were opened and everyone discovered who he truly was. Over forty women have now shared stories of their encounters with Weinstein, publicly. Since then, a plethora of celebrities have come out regarding their experiences with sexual harassment in their lives including the likes of Terry Crews, Ashley Judd, and Heather Lind. Harvey Weinstein was the beginning of something big. He was the first domino and because of him, a nationwide movement began. The hashtag “me too” has been trending for weeks now; its purpose was to bring the stories of those who have been sexually harassed/assaulted to the forefront.

When we look at the powerful individuals who have been ousted and their companies performance’s, there is a relation. They’ve been performing poorer than their competition. In relation to Jeffrey Hugessen’s blog post regarding the decline in NFL viewership after players began kneeling during the national anthem, the Weinstein group’s latest movie performed poorly in theatres where it only grossed $742 million (McNary, 2017). In both cases, controversy negatively impacted the profits of these organizations. This can be explained by looking at McKinsey Quarterly’s consumer decision journey. (Court, Elzinga, Mulder, Vetvik, n.d.). These companies may still pass the awareness and familiarity stages but once consumers begin to consider the products being offered, they will end their search and take their business elsewhere. Because of the multitude of news reports coming out, the negative press being received, and harmful connotations associated with these companies, consumers form a negative opinion and their evaluation ends there.

Do these companies deserve to suffer because of the actions of their higher-ups? I believe so. For decades, Weinstein went unchecked because people in his company were too scared to say something. Maybe this will serve as a lesson for companies in the future – Sexual harassment is horrible for marketing.

Sources

Article: http://www.cbc.ca/news/entertainment/harvey-weinstein-ousted-sexual-harassment-claims-1.4346275

McNary, D. (2017, October 29). First Weinstein Co. movie post-Harvey scandal grosses just $742m. Retrieved from http://nypost.com/2017/10/29/first-weinstein-co-movie-post-harvey-scandal-grosses-just-742/

Consumer Decision Journey: Court, D., Elzinga, D., Mulder, S., & Vetvik, J. (n.d.). The consumer decision journey. Retrieved from https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/the-consumer-decision-journey

Peer Blog: https://blogs.ubc.ca/jeffreyhugessen/2017/09/26/nfl-tv-ratings-decline/

Image: http://commonlegalquestions.com/index.php/2014/05/27/what-is-sexual-harassment/

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When we look at companies in the past who have failed because they weren’t able to keep up with changing times, a few come to mind: The Source, BlackBerry, Toys “R” Us. Now, there’s another name to add to that list – Sears.

Sears was once a retail giant rivaling the likes of Wal-Mart, Target, and many others. It is now ready to begin liquidating and will shut down its operations in Canada. Ultimately, the company was unable to devise any coherent or sensible strategy that would allow it to compete in a competitive market – this is what brought upon its demise. The company was unable to shift and pivot with changes in customer demands. They did not invest in their stores or attempt to compete on the e-commerce front. Amazon and other companies were able to take advantage of such things and implemented strategies that worked well.

In terms of their strategy, when the company was operating successfully, their main priority was to repurchase shares in the billions of dollars while its brick-and-mortar stores required more investment. In fact, their CEO Edward Lampert wrote “Unless we believe we will receive an adequate return on investment, we will not spend money on capital expenditures to build new stores or upgrade our existing base simply because our competitors do. If share repurchases or acquisitions appear to be more productive, then we will allocate capital to those options appropriately.” By refusing to look at what their consumers were demanding at the time, the management team implemented an inappropriate strategy that was misguided and foolhardy. In Rita McGrath’s “The End of Competitive Advantage”, she writes about how companies must “ramp up, exploit, reconfigure” in the sense that their strategies must be ever-changing and adaptive. In the case of Sears, they failed to utilize this strategy completely.

Growing up, I’ve watched many companies that have had to shut down because they weren’t able to “pivot”, as Prof. Kopke says. One that comes to my mind is Blockbuster Video – The movie rental behemoth. It was a wildly successful company that fulfilled its customers desires well. However, with the improvement of technology and the rise of competitors such as Netflix, Blockbuster Video was unable to keep up. Their limited strategy did not take all factors affecting the business climate into account and thus, were unable to survive during changing times. Therefore, in the cases of Sears, Blockbuster Video, and so forth, in order to sustain a successful business, it is imperative to have an ever-improving strategy.

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Sources

Article: www.cbc.ca/news/business/sears-closures-impact-small-communities-1.4353011

Image: business.financialpost.com/news/retail-marketing/sears-holdings-considers-selling-majority-stake-or-whole-of-sears-canada

   In commerce, companies need to be seen as leaders in their respective sectors; Ever-improving, profitable behemoths that will generate large dividends for their stakeholders. However, this often isn’t the case. Recently, the frozen yogurt chain, Freshii, announced that it did not meet its projected store openings. Due to this failure to deliver, investors became skeptical and began pushing the stock price down – almost 40% in fact.

   When we look at cases in which companies commit financial fraud, reasons such as these are often brought up. With an ever-looming presence and pressure that investors pose, among other factors, company executives can sometimes waver and illegally alter figures. When companies see how much missing a target projection or a drop in quarterly earnings can affect their financial situation, it may incentive executives to “cook the books” and produce inaccurate and untrue financial statements to present to its stakeholders. This, in itself, is highly unethical and betrays the fiduciary responsibilities a company has to its shareholders. In “The 10 Worst Corporate Accounting Scandals of All Time“, companies such as Enron, Tyco, and Waste Management all altered their earnings, income, or debt on their financial statements in order to make themselves look better on paper to investors. This conduct not only violates ethical boundaries but also many laws and regulations governments have in place to protect investors and their capital. By providing false data on balance sheets, income statements, earnings reports, and so forth, it sways investors to invest their money in something that is not what it seems. People have lost their life savings because companies have falsified their finances, hoping to seem more appealing to investors. This is unethical, immoral, and simply not an appropriate way of conducting business.

   Although Freshii didn’t meet its target projection, analyst Mark Petrie was quoted as saying, “We believe the consumer and franchisee propositions remain attractive, and see 2019 guidance as achievable.” Although Freshii Inc’s stock price fell drastically, investors can still regain trust in the company – the same can’t be said for companies that get caught lying. For these reasons, it is so important that companies have strong internal regulations and controls to prevent external pressures from compromising their integrity.

Sources:

Article: business.financialpost.com/news/retail-marketing/freshii-scales-back-growth-plan-for-first-year-as-public-company

Photo: https://www.financialsymmetry.com/how-to-not-worry-falling-stock-market/