Brands, even the most formidable ones like Apple and Google, are vulnerable to scandals. And while some scandals die down after a while, other scandals lead to destruction and they can even end careers.
Scandal’s Olivia Pope might make managing a scandal seem pretty easy, but things are very different in the real world. When a scandal comes up, a company doesn’t have the luxury to make it disappear. And no matter how swiftly the scandal is dealt with, there’s no way to say that it won’t destroy the company’s reputation. More often than not companies don’t manage to survive a scandal, but there are a few companies who manage to survive in spite of the odds.
Below is a list with six major scandals that prove that no matter how efficient you are in cheating, you’ll be caught eventually.
When it comes to automobiles, German manufacturers are on top of their game. And when you talk about German car manufacturers you can’t help but think about Volkswagen. Its trademark car, the Beetle, is a piece of mechanical art that simply refuses to grow old. Sadly, the company has been engaging in engineering malpractices.
It all began sometime in 2009 when VW engineers programmed a “defeat” device into the engines of specific diesel vehicles, including the Audi A3 and the Beetle. During an emissions test, the device would self-activate and enable the vehicles to cheat their way out. All was well until a few years later, scientists in Western Virginia University detected the foul play and submitted their findings to the California Air Resources Board, marking the beginning of a big scandal. In September 2015, the US Environmental Protection Agency duly issued a notice of violation of the Clean Air Act to the VW Group. Even though the company moved quickly to admit the mistake and make plans to recall the affected vehicles, the damage had already been done. Lawsuits, massive fines of up to $18 billion, resignations of senior managers and loss of brand trust will no doubt affect the performance of the automaker long into the future.
2. Bill Cosby
The Bill Cosby brand is at the brink of collapse courtesy of a rampaging sexual desire he couldn’t contain back in the day. No fewer than 55 women have accused the stand-up comedian of raping or otherwise sexually assaulting them. The women have filed several lawsuits against him and continue to open up about their claims in media interviews, further inflicting damage to the Cosby brand. Today, no one – save for his family – wants to be associated with the entertainer. Media houses and entertainment companies that were previously happy to host his shows are no longer interested in working with him. Bounce TV, for instance, has stopped airing reruns of the Cosby television series and the Centric Network has also pulled the plug on The Cosby Show. None of the tricks Cosby’s PR machinery employ seem to be yielding any positive results. The Cosby Women, as some media outlets like the call them, have certainly brought the 78-year old entertainer from grace to disgrace.
3. Ashely Madison (Avid Life Media)
Ashely Madison is an online destination for married dating, casual encounters and extramarital affairs. With over 39 million users, it is safe to say this destination is quite popular. Although the website promised discreet encounters, hackers had their own opinion on the matter. On July 15, the “Impact Team” penetrated the website, stole customer data and threatened to release it if the service was not discontinued immediately. Despite the fact that the company managed to stay up and running, the hack dealt the company with a huge blow. Noel Bidderman, founder of chief executive of Avid Life Media, the company that owns and runs the service, stepped down a month after the bridge. The company is also facing a $578 million class action lawsuit from two Canadian law firms.
4. Toshiba Corporation
Public companies typically operate under a set of strict financial regulations, so they take accounting matters very seriously. It therefore came as a surprise when Toshiba announced a $1.2 billion accounting scandal in April 2015. Apparently, it has been overstating its profits for the past seven or so years.
Many financial professionals are wondering how the company’s auditor, Earnest & Young, failed to spot such errors in its audits. The scandal dealt Toshiba some heavy blows, since it was immediately delisted from Japan’s stock index of best companies. The chief executive and several other senior managers also left their posts, leaving the Japanese corporation with the hard task of finding other leaders. To make matters worse, the company reported a record $102 million loss between April and June.
5. The Duggars
Jim Bob and Michelle Duggar of 19 Kids and Counting television show were doing well until word reached TLC that Josh, the couple’s eldest son, molested his sisters and other girls when he was a teenager. The Duggars reputation was severed, given that they taught their kids good family values on the show. The show was duly suspended and cancelled in July. Things got worse for Josh Duggar, as he was also caught up in the Ashley Madison scandal. Off screen, the Duggars are definitely nursing a damaged brand.
With billions of money running through the world of professional sports, corruption is fast becoming a way of life. In May, the FBI’s and IRS’ criminal investigation division indicted a number of top FIFA officials for money laundering, wire fraud and racketeering. While some have been arrested, others like Sepp Blatter – the President – have only resigned or stepped aside to pave way for further investigations. Although the scandal has not stopped the devotion of millions of football enthusiasts, FIFA’s credibility has suffered tremendously. We are not even sure whether Russia and Qatar are the rightful hosts of the 2017 and 2022 world cup tournaments.
These are definitely not the only brands that wish they could have skipped 2015. Comcast, the American cable TV, Internet and phone provider, has had a reputation for poor customer service for some time now. The company hit the news in April when its customer service representatives flatly refused to cancel a customer’s subscription. Brian Williams of NBC must be cursing the day he chose to become a journalist. In February, he was suspended from work after NBC established that he intentionally made untruthful statements when covering the 2003 war in Iraq. McDonalds is also no stranger to controversy. Food scandals and employee strikes have continued to taint its brand image. Some of its independent franchise outlets have been accused of hiring child labor and paying below the minimum wage.
Scandals test the strength and resolve of a brand. Some rise through the ashes unscathed, some are forced to rebrand completely, and others gradually collapse and eventually call it a day. Only time will tell whether these brands have what it takes to overcome the storm.
Which of these scandals is the most scandalous? Have you or your businesses been caught in any scandal? Share your thoughts and experience in the comments section below.