Management Accountancy and Brand Value

From banking to oil, technology to automobiles, industry reputations have been taking a pounding in recent years. Some were deserved. Others weren't. All had financial implications for the companies involved – and their shareholders. For most companies in the new economy, a well-built brand portfolio will definitely be the key to establish competitive edge, and data is especially crucial to help top management in ensuring reputation is protected and managed. In a hard hitting, case study based report, CIMA analyses the importance of an organization's reputation and how it can be managed in an era of 24 hour rolling news and increased social networking.

Reputation Quantified

Issues covered include understanding the difference between brand and reputation, how to quantify reputation and how to integrate reputation in to your strategy. To provide more specific insight into how the report can be used by management accountants, Mr. Ray Perry, Executive Director of Chartered Institute of Management Accountants (CIMA), was invited to deliver a luncheon talk. The topic is "Reputation– How Management Accountancy can Help Manage it" and the purpose is to provide management and finance professionals with a platform to continuously develop skills, thus to ensure that Hong Kong will remain strong and competitive by having a dynamic talent pool.

Ray is responsible for global brand development across CIMA's markets. He is also responsible for CIMA's award winning website. Currently he is editor-in-chief of CIMA's monthly magazine, Financial Management, one of the largest finance magazines in the UK.

Cases happening at the same time were compared and contrasted:

Lady Gaga's best-selling album hit the sales record at the same time when the finance industry giants in the U.S. were vanishing one by one under the strike of the financial tsunami. Ray also mentioned the scandal of Enron which is a very appropriate example to illustrate the significance of business ethics, for professionals in the finance sector especially in this case.

Events covering thousands of years' mankind history were analysed:

Motecuhzoma II, King of the Aztec Empire, misjudged the real intentions of the Spanish invaders and brought a fatal disaster to his kingdom. While the near collapse of the British Jewellery company, Ratner Group, that was brought about by one statement of the Chief Executive was also illustrated as another case of empire destruction due to one seemingly insignificant decision. What Ray wanted to tell us, is that risk of reputation is not a new issue.

Power of the Social Network

Exactly one of the magics performed by the internet technology and the social media, what is going on locally in Hong Kong did not escape Ray's eyes, even though he arrived just for a few hours from the U.K. before the seminar. He cited the recent protest supported by hundreds of Facebook users against the F&B Group – Café de Coral, and showed us the modified version of logo uploaded by protesters, so as to illustrate the fact that the power to construct or destruct the reputation of a company is gradually shifting to the hands of the public.

Ray said, "Our key findings revealed that reputation has currency in terms of driving share value, reducing operational costs and creating marketing opportunities. While social networking has reduced the companies' control over its brandname, reputation is created in house and must be a part of strategy and risk."

Decision makers in sales, marketing and other business operations need accurate and updated data for brand management decisions. Management accountants can take the role in providing essential information as they are the first one to gain access to quantitative measurements. If management accountants can transform numerical data collected into meaningful information, collaboration would be promoted.