It’s amazing how much public perception has changed since the take down of Harvey Weinstein sparked a seemingly endless string of sexual harassment claims and scandals in entertainment, business and beyond. Workplace culture, too, underwent a radical evolution (although many have claimed the changes were more conceptual than actionable), and #MeToo continues to gain steam.

But another important part of the movement’s impact is the influence it’s having on how consumers perceive their brand reputations. A flurry of recent studies has shown us that consumers are taking much more into account when determining which brands should earn their business these days—and company reputation has become a leading factor, as much as price and quality. This includes the politics and policies it supports, how involved its leaders are in spurring cultural change, and how it cares for and protects its workforce.

And so the question becomes: is a company‘s history of sexual harassment creating reputational obstacles for its bottom line? A new academic study sought to find out—and the findings suggest that not only do harassment issues blemish company images, but they may have an even bigger impact than other reputational slams such as fraud.

The research, conducted by members of UCLA’s Anderson School of Management and the University of Amsterdam, created groups of U.S. consumers who were told about an organization’s size and number of employees. One group was also told that the company had a sexual harassment claim made by an employee against her manager, while the other group was not told of this claim. A second experiment added a third group, which was told that the company had a financial misconduct claim made by an employee against her manager. The experimenters then asked the participants to rate their perceptions of the company and how the claims should be handled.

The science is in—sexual harassment damages company reputations

The researchers found that a single sexual harassment claim can dramatically reduce the perception of an entire organizations’ gender equity (i.e., how fair men and women are generally treated). In fact, sexual harassment claims negatively affected perceptions far more than even financial fraud claims.

When they dug deeper and asked whether the company should be hiring more women and fewer men, they found that the less gender equitable the company appeared to be, the more an overall culture problem was perceived—suggesting that the general public feels that hiring more women is an effective way to cope with the unfair treatment of women in the workplace.

Responding to a sexual harassment claim

When it comes to protecting company and brand reputation  it’s been decidedly shown that the PR teams that act fast and get their side of the story known quickly are the ones that suffer less collateral damage in the long run. Not surprisingly, this PR truth was again confirmed.

The researchers surveyed participants to see whether an organization’s response to a harassment claim could affect the reputational impact. The groups were asked to read about different responses to harassment claims—ranging from quick responses expressing concern for the victims to ones that were slower and more dismissive of victims—and discovered that when a crisis breaks, a timely and informative response can diminish public backlash as much as if there was no claim at all.

Although some of the participant variables necessitate further study, the research suggests that a single claim of sexual harassment is enough to reshape the perception of a company significantly. Therefore, a company that acts more responsibly and proactively toward sexual harassment not only benefits its cultural infrastructure, but its public reputation as well.

Brands and businesses, you have been warned

Doing some corporate culture housecleaning is now tantamount to maintaining an upstanding reputation with today’s consumers—and companies that fail to take action to ensure their workplace is equitable, diverse and provides a safe, harassment-free environment for employees could find themselves in reputational crisis. So do what’s best for your employees—and your company—and fix your culture now.

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Bulldog Reporter is a leader in media intelligence supplying news, analysis and high-level training content to public relations and corporate communications professionals with the mission of helping these practitioners achieve superior competitive performance.

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