Oscar de la Renta

How to respond to a devil in Prada

October 17, 2012: 12:59 PM ET

In a business environment filled with corporate PR crises and mudslinging, does it ever pay to take the gloves off when responding? And if so, how do you pull that off?

By Harrison Monarth

FORTUNE -- Designer Oscar de la Renta recently got his silk boxers in a wad when New York Times fashion reporter Cathy Horyn penned an unflattering review of his latest runway show. De la Renta took out a full page ad in Women's Wear Daily to respond to Horyn, who in early October ignited a similar flame under Yves Saint Laurent designer Hedi Slimane.

In both cases, the designers have drawn the sympathy of devotees (Lady Gaga even leveled a rap against Horyn and her boyfriend). Yet in both cases, such behavior is, at best, viewed as diva-esque and, at worst, damaging to a company's bottom line.

In the last three years, companies have had to do serious damage control to restore their reputation in the wake of oil spills, auto recalls, and phone tapping scandals. These companies have paid a price. According to a 2011 study by consulting firm Booz & Company, stock prices of companies that are in the oil, automobile, aircraft manufacturing, and financial services industries show that shareholder value came down an average of 33% within a year. So, while designer tantrums may not put any lives at risk, a company's tarnished brand can have far reaching effects.

MORE: Post-debate thoughts: What wasn't said

Service disruptions at BlackBerry manufacturer Research in Motion (RIMM) in October 2011 left millions of its users without access to email, instant messaging, and browsing for several days. RIM's response was awkward silence followed by a statement that service had been restored (it hadn't entirely).

RIM was already having a difficult year thanks to competition from Apple (AAPL), HTC, and Samsung. The company's communication missteps contributed to a 49.7% drop in its market value in the days following the debacle, according to data compiled by AON and OxfordMetrica. More

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