Seeking Alpha
Profile| Send Message| ()  

It seems like when outsourcing companies do damage control, they go all out. This is following Accenture’s (NYSE:ACN) recent decision to drop Tiger Woods from sponsorship with the company.

To the dismay of many, Tiger Wood’s shame has caused this 2008 Highest Paid Athlete to be dropped by one of the foremost BPO Companies. Accenture has been, for the last six years, one of Tiger Wood’s more prominent sponsors. Numerous advertisements including the theme line, “Go on, be a Tiger,” featuring Tiger Woods have been used by Accenture, including photos of him on their website, and slogans. However, with allegations of infidelity currently plaguing him, Accenture decided to end the sponsorship and has been referred to as the ‘first’ of his sponsors to drop him.

Some would say that this is an extreme move considering that Tiger Woods has been able to maintain a relatively squeaky clean reputation in the past. However, it also seems like not many from Accenture’s top brass believe in the saying, “no press is bad press”.

Such an extreme move of shedding tarnished brand image reminds me of the Satyam Computer Services Ltd scandal earlier this year. This was also marked by an extreme move on the part of an outsourcing company, this time by dropping their old image by changing their former moniker. Going from Satyam Computer Services Ltd, to Mahindra Satyam (NYSE:SAY) as a form of damage control after former Chairman Ramalinga Raju, and two others were embroiled in a fraud scandal, which some still refer to as the Enron of India.

Of course, the situation differs in that, the main reason Satyam changed names is to distance themselves from the scandal and keep the business afloat. With Accenture, we’ll never know for sure if the situation with Tiger Woods would’ve affected their business, although many of the old advertisements of Accenture have become even more famous, except with ironic twists and satire. As reporter Jeremy Mullman pointed out, “there is a certain irony that a consulting firm, which gave advice for a living, is learning this lesson.” Figuring how Accenture built their reputation alongside Tiger Woods’ image, his fall is a huge event — one that will certainly remain a blip on Accenture’s image. As Accenture had put it before, Tiger Woods had served as a, “metaphor for [Accenture’s] commitment to helping companies become high-performance businesses.”

For now, Accenture will need to redefine their image to the public once again, and even though Forrester Research (NasdaqGS: FORR) Senior Analyst Liz Herbert has said that this shouldn’t have any effect on Accenture’s deal-making abilities, on the short-term, Nielsen IAG has determined that there has been a negative impact on brands with ties to Tiger Woods, from viewers of late-night talk shows who associated negative feelings towards Tiger Woods with negative feelings towards the brand as well.

Now with Tiger Woods in hot water this time, perhaps Accenture has set aside any future ties with the golfer and perhaps making it known to the world that, when an outsourcing company like Accenture gets involved in a scandal, repercussions are swift and decisive. I think SVP of Research for TNS Media Intelligence, Jon Swallen put it best when he said that it struck him how it was like Accenture was “taking him [Tiger Woods] to the woodshed.”

Disclosure: No position

Source: Accenture Drops Tiger Woods: Excessive Damage Control?