Corporate Protectionism: Does it Do More Harm than Good?

If you listen to NPR’s “Marketplace with Kai Ryssdal” with any regularity like I do, you’ve probably heard the term “protectionism” bandied about once or twice in the past year or so. Now I was an English major, so please forgive me for stepping completely out of my element here, but it seems to me the protectionism good Mr. Ryssdal refers to has to do with governments and large multi-national corporations protecting their own interests during an economic downturn, which makes sense for them in the short run, but is ultimately a bad thing as it hampers larger scale economic growth….I think I just sprained my brain.

Lately however, I’ve begun to hear “protectionism” used in a different context, most recently describing Apple’s reaction to the leak of one of their iPhone 4 prototypes. For those of you not familiar, when a product review of Apple’s then unreleased phone hit the internet via the blog Gizmodo this Spring, the tech giant deployed search warrants, the police and even a “civilian SWAT team” to recover their lost property. This Orwellian response caused a wave of backlash amongst their otherwise devoted following, earned them heaps of bad press and prompted this hilarious lampooning on the Daily Show. Once the phone finally did come out, the number of glitches lead many to believe the company had prematurely released the phone in the aftermath of the leak before properly refining it’s technology, further sullying the once seemingly invincible brand.

Apple’s missteps showed rare blemishes in a meticulously crafted public image and raise an important question for large and small businesses alike; in an age of nearly infinite media outlets, has it become impossible to control one’s public image? Should a company even try? One wonders what would have happened had Apple taken a more laid back approach. Though product leaks can be harmful to a product’s bottom line, Apple likely would have saved a good deal of PR capital had they handled the situation diplomatically. In the end, which is more important?

The issue of message control is not purely relegated to the realm of big business either. Consumer review sites such as Yelp and Four Square provide a public forum for anyone to say pretty much anything about any given company. For many, this has lead to an increase in sales and exposure through online “word of mouth.” However, such sites have also opened the door for consumers to leave damaging comments that a company has little or no power to remove. While many praise these sites as enforcing a democratic system of checks and balances over companies, they have also created a myriad of ethical and strategic gray areas.

How should a company respond to unfavorable or unwanted attention? In the event of unwanted exposure, could an attempt to protect one’s interests end up damaging a company’s image more than simply ignoring it? In hindsight, Apple’s best course of action in response to the iPhone 4 debacle seems clear; grin and bear it.