The Squander of a Reputation

The adage that it takes a lifetime to create a good reputation, but only a second to squander it is by now rather a platitude than a clever insight. And yet, it seems that we all too often forget this truism, especially if under the influence of short-term profitability.

At a recent conference of the Swiss Association for Quality there was much talk about the reputation of Switzerland – especially “Swissness” - as it relates to the quality of the products and services offered by Swiss companies and organizations. The problem Switzerland faces is that it’s “brand” – the Swiss Cross and the wording “Swiss” -  is increasingly misused by foreign companies for financial gain. It is estimated that customers are willing to pay an average premium of roughly 20% for goods with a “Swiss” brand, although the gamut ranges from 1-2% for the machine industry to 50% for luxury goods such as watches. As these percentages make evident, the favorable reputation of Switzerland translates into very concrete economic returns.

According to a world-wide assessment by the Nation Brand Index, however, the brand “Swiss” lost quite precipitously in value these past years, from being the number 2 in the world in 2005, to coming in only at number 9 in 2001. Part of the reason for the image damage has to do with the fact that a number of firms have taken advantage of the above elucidated value premium even though they have absolutely nothing to do with Switzerland, or then only in a limited fashion. The most egregious example of this is the BelSwissBank (http://www.bsb.by/en/) which features both the Swiss cross as part of its logo and its name, even though it is headquartered and operated entirely in Belarus!

 

Such examples of misuse of the Swiss brand are, however, only part of the reason for a steady erosion of the Swiss brand. It was interesting to note that several exponents of the Swiss industrial and added-value manufacturing sector, as well as the deputy head of the Swiss Federal Institute of Intellectual Property, clearly pointed to the continuous negative publicity that Switzerland receives abroad in conjunction with its taxation practices and banking sector. Instead of thinking about perfectionist watch-makers or hi-tech machine manufacturers, Switzerland is increasingly perceived abroad first and foremost through the prism of having long played a smooth zero-sum game of hiding the money of foreign tax evaders and creating tax havens for high net-worth individuals and multinational corporations. That, clearly, is not a particularly good way to cultivate your friendships with other nations, nor is it conducive to the “brand” of Switzerland.

 

Having lived and worked in a number of different countries, it is my experience that “Swiss quality” – although hardly perfect and de facto necessarily always the best – does nevertheless have some reality to it. The Swiss virtues of reliability, conscientiousness, attention to detail, perfectionism and superb organizational and planning skills, do translate into a merited good reputation in its products and services. This hard earned good reputation, however, stands to be squandered today, due both to free-loaders of the brand “Swiss” and the persistent negative media attention Switzerland gets abroad in conjunction to its banking and taxation schemes.

Manuel Dawson

History matters

Three months ago I took up a post as a research assistant in a business school. Nothing unusual—despite the fact of my uncommon academic background in this field of research. I am a historian who specialised in medieval times by writing my thesis about sociocultural dimensions of eating in and out in late medieval towns. As my new job was repeatedly subject to discussions among friends with academic or non-academic background, I carry out in this blog how a historian could contribute to the business research.

First of all, business is all but a main subject of today's historiography. The already ten year old lamentation of the German business historian Hartmut Berghoff who stated a de-economisation of the recent historiography was met with almost no responses. As an illustration you can look at the recent list of the 24 (!) introductory seminars at the history department of my home university: Neither attracts the freshmen with a catchphrase which is in any relation to "economy". Topics like the history of human bodies appear to be more in vogue—is it surprising that nobody apart of us historians is knowing what we are actually doing?

Instead of regretting the loss of any influence of a historian's voice on public debates, I demand that historiography should inquire the past with questions relevant to today's problems. From my point of view, I am convinced that no topic has such a demand of reflections as e.g. the apparently irresistible marketization of all spheres of our lives. But what could a historian contribute to such a discussion?

Ironically, straight the specific culture-based perspective which can be trained by studying such topics like the history of the transformation of the perception of human bodies. As long as the mainstream economics are regarding the economy as a separated "realm" in which rules and dynamics are considered like physical principles that tries to make our actions ex ante predictable like the falling of an apple from a tree due to the force of gravity; that long voices other than economists' are needed on the topic of economy.

In contrast to a purely economic approach, a historian's perspective embeds the economy in its sociocultural environment. Institutions as e.g. markets can be deciphered as social constructions and are persistently subject to change; their rules are characterised by mostly unrecognized norms and conventions. Regarding the behaviour of human beings on markets, you can go so far that a postulated rationality of human behaviour itself is a socially constructed concept which was invented by scholars during the times of Enlightenment.

That even mainstream economists turn away from the axiom of rational behaviour by reason of its limited empirical explanatory power is no surprise from a culturalistic point of view: The rational mode of thinking is only one empowering concept among others which all influence the behaviour of business men.

In this respect, however, I understand the work of scholars as contributors to the design of the concepts and institutions of our lives. The question in the middle for business researcher has to be: What is a “good” firm? As a historian I have not only some knowledge about the path dependencies of all conditions but also the consciousness about its alterability. I am happy to help working on it.