Ensuring an industry’s durability through reputation management

Abstract

Problem statement The Dutch food processing and packaging machinery industry (food systems industry) is a very important sector considering its benefits to Dutch economy. The sector has a total annual turnover of approximately 2 billion euro’s and furthermore provides employment to more than 8600 people (GMV, n.d.). This sector, and entire Agro&Food sector to which it is closely related, are faced with major future challenges regarding food supply. These challenges consider an enormously rising global demand in a world where fossil fuels become scare and people are more and more concerned with health and the quality of life. Innovation is therefore a vital requisite when facing these challenges, and a requirement to ensure the strong position of the industry in the future. However, innovation could be at risk due to reputational problems. First, the need for innovation shows the importance of recruiting well-educated personnel; currently the sector’s reputation harms its position on the labour-market. Second, its reputation influences the way in which it is perceived in the political environment. Therefore policies might not always favour the sector and can thus limit the resources that are available to the sector. Approach This research has two objectives. The first objective is to describe the current reputation of the food systems industry on different issues and amongst various stakeholder. The second objective of this study is to provide possible routes to success, by understanding the current situation. The structure of the report was set up as ‘a quest’ to fulfil both objectives. Overall, the study is based on literature research and expert interviews. The research environment was provided by one of the leading companies in the industry: Marel. Theoretical insights are combined with empirical findings from within and around the sector. Theories that are used consider: (corporate) reputation, corporate communication and network management. Findings Findings current reputation First, the analysis of the current reputation has provided the following findings: Retail and consumers have proven to be actors that have major influence on the reputation of the Agro&Food sector and the food systems industry. Their preferences influence the entire market behaviour; there is a strong focus at optimizing production at minimum cost level. The retail, and the primary sector are therefore strongly in the limelight of animal welfare organisations; a public discussion on food production is taking place to influence perceptions of end-consumers. End-consumers, on their turn determine the ‘ social environment’ in which the food systems industry does business. Since everybody is a consumer, their perceptions thereby influence the sector’s position on the labour market and in the political environment. However, the food systems industry doesn’t find itself in the position where it is able to intermingle in this public discussion; there is no visibility of the sector on end-consumers. Its potentials on the labour market are unknown to the public. Besides, the innovative character of the industry, combined with its ability to work on global issues related to food production should be the reputation that the sector has on various educational institutions. However, currently this reputation appears to be absent. It is invisible for such institutions and also on potential human-capital which these institutions might provide. Due to this invisibility, the reputation of the Agro&Food sector (low-tech, simple) seems to be adopted as a perceived image. Hence, a link exists between the ‘primary’ Agro&Food sector and the ‘ secondary’ food systems industry. These links are also visible at various government levels. Visibility and reputation of the food systems industry appears to be good on these institutions, however, the sector is affected by the primary sector’s harmful reputation. Provincial governments will have to adapt their policies regarding the entire Agro&Food sector to ‘national benefits’ and ‘ local bottlenecks’ (which mostly involve various NIMBY effects.) Again governments will always have to account for public perceptions on sustainability and animal welfare. Strategies to enhance reputation Secondly, this study focussed on possibilities for the industry to establish a more profitable reputation amongst its stakeholders. Thus, the understandings of the current reputation were complemented with theoretical insights that can be used to construct possible approaches for the food systems industry to achieve its goals. There is reflected upon all approaches to create an understanding of their main advantages and limitation and additionally to create an understanding of the consequences that the proposed strategies may have for the food systems industry as an organisation. These analysis has provided the following findings: Corporate communication can offer the sector with strategies that it can perfectly use to increase its visibility and reputation on policymakers and the labour market. When approaching policymakers, the sector should use its economic importance; emphasizing its uniqueness and distinctiveness for Dutch economy. It can approach human-capital by highlighting potentials of the sector such as job security, innovation and social importance. The sector could establish links between parts of its identity by emphasizing the social importance of innovation for future food demand. Besides, the industry could construct its message on various theme’s and for instance present itself as ‘ Hero Companies’ or ‘ Discovery Companies.’ These strategies especially have a direct approach, with clear targets. Furthermore, they ensure that the industry is in control of all of its activities. When solely focussing on these two parties, the sector will act in the background. The sector will not step into the public limelight. It doesn’t intermingle publically in discussions on food production. Therefore, it doesn’t have to be afraid, that communications will make them target for animal welfare organisations (a current urgent fear within the sector). However the ‘social environment’ on sustainable food production and animal-welfare create an ‘underlying’ problem of social-acceptance. The question arises if corporate communication measures will have enough power to fight this underlying social perception of food production. Increasing visibility and transparency seems problematic since the sector is confronted with all sorts of public moral dilemmas. Besides shaping a message that accounts for social responsibility, in a way that it is perceived as the truth, is massive difficulty, since it doesn’t align with shown modes of behaviour. These perceptions will always influence the way the sector is perceived by human-capital and will always influence public policy. Corporate communication, for this case, only appears to be able to handle the ‘symptoms’ of this underlying social perception without solving it in a more durable way. Such measures will always be a reaction to current feelings in society, but they can’t provide a strategy in which future similar situations are prevented. There is recommended that if the sector truly wants to influence these stakeholders, it is the underlying social perception that needs to be influenced. It is then vital that the sector establishes a more open view towards public concerns and adopts a mind-set in which collaborations are sought with various stakeholders. Within this perspective, the sector shouldn’t solely focus on perceptions, it should focus on networks and relationships. By involving many stakeholders and issues, the sector could increase its possible routes to success; it can search for potential collaborations and behave strategically. This also provides the sector with the possibility to tackle problems before they become urgent; it can act proactively. However, these type of strategies require that parties let go of control and starts such processes of collaborations with vague goals. It also requires that the sector is prepared to face opposing parties in processes with no clear future gain. Actors in the entire Agro&Food sector are currently mainly concerned with their economic position. Next, the current fear for opposing parties and the rivalry within the sector makes that information isn’t shared. Convincing both the Agro&Food sector as the food systems industry to collaborate therefore seems the main challenges. An alliance between strong parties from both sector’s seems an important first step. Nevertheless, the food systems industry’s innovative character can be perfectly used to provide interfaces on which relationships can be established with other parties. Collaborative research and development of new concepts of food production which may involve animal-welfare related issues, appear to be a platforms on which relations can be assembled with parties such as educational institutions, policymakers and animal welfare organisations.