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Tainted Milk Powder

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Tainted Milk Powder
Question 1: Given strong profit growth, has there been any damage to Baidu.com’s reputation?

Answer:
Yes, there was damage to Baidu.com’s reputation.
The examples of damage to Baidu.com’s reputation are: * The rumors made the company’s information appear unreliable. * Baidu.com’s users may start to boycott from using this search engine.They are hoping that Baidu.com may change their behavior after the protest. * Due to the boycott activity, the number of daily visitors may reduce drastically. * Due to the number of visitors decreased, those existing advertisers may withdraw their advertisement and switching to other company. As a result, they lost valuable contracts/customers. * Baidu’s shareholders also may sell off their shares in market. As a result, the share price dropped, this is also indicating that they lost public trust.

Question 2: What the future reputational damage affect and how could it be measured?

Answer: * Damage public trust, number of viewer and user drop * Mostly for a company to gain trust and confidence from the user of their product is not easy and take time. * But, to damage it just take a short period of time. For example doing unethical action in managing business operation. * Many news and rumors spread in media about Baidu.com have received some payment from tainted milk manufacturer for not advertise any news about them. * No concrete evidence about the rumors, but could damage their reputation, public trust and confidence of their source of information. * The number of viewer or user that use their search engine that been lower after the spread of bad news and rumors could be used to measure for the damage of public trust.

* Investor not interested to invest, share price drop * The bad news and rumors about the unethical action by this company triggered the public trust toward them * It makes many people debate and talked about their action after the spread of


References: 1. Tainted-Baby-Milk Scandal in China, RetrivedMarch 8, 2013 from http://www.time.com/time/world/article/0,8599,1841535,00.html, 2. Tainted Baby Formula Scandal Blows Up in China, Retrieved March 9, 2013 from http://blog.foolsmountain.com/2008/09/12/tainted-baby-formula-scandal-blows-up-in-china/ 3. Baidu Caught in Backlash Over Tainted Milk Powder: Search Engine Denies Screening Out News; More Rivals Online, Retrieved March 9, 2013 from http://online.wsj.com/article/SB122176870268453547.html 4. The Google of China: The Secret of Baidu’s Runaway Search Engine Success, Retrieved March 9, 2013 from http://www.time.com/time/world/article/0,8599,2111545,00.html 5. Lorraine Day, M.D. Mad Cow Disease: What the Government didn’t Telling You. Retrieved March 9, 2013 from http://www.drday.com/madcow.htm 6. 2008 Chinese Milk Scandal. Retrieved March 9, 2013 from http://en.wikipedia.org/wiki/2008_Chinese_milk_scandal#Chinese_industry 7. Pharmaceutical Industry. Retrieved March 9, 2013 from http://en.wikipedia.org/wiki/Pharmaceutical_industry 8. Tainted milk: Unravelling China’s Melamine Scandal. Retrieved March 9, 2013 from http://thinkbusiness.nus.edu/articles/item/118-tainted-milk-unravelling-china%E2%80%99s-melamine-scandal 9. Storer, J.A chance to tackle the culture of secrecy in government. Retrieved March 12, 2013 from http://www.thepunch.com.au/articles/a-chance-to-tackle-the-culture-of-secrecy-in-government/ 10. 2008 Chinese milk scandal. Retrived March 12, 2013 from http://en.wikipedia.org/wiki/2008_Chinese_milk_scandal
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