the reputation paradigm corporate reputation and competitiveness lecture 3
TRANSCRIPT
The Reputation Paradigm
Corporate Reputation and Competitiveness
Lecture 3
Lecture Objectives
• To identify what people working with reputation believe about reputation management
Tenets of the Reputation Paradigm
(1) The perspectives of multiple stakeholders need to be considered
In the Maltese Falcon, Sam Spade remarks, ‘That kind of reputation might be good for business - bringing in high priced jobs and making it easier to deal with the enemy.’
THE ORGANIZATION
Suppliers Management
Employees
Owners/TrusteesLocal Communities
Financial Markets Local, Regional & National Government
Competitors
Pressure Groups
Media
National PopulationInternational Population
A Stakeholder Model of the Organization
The Stakeholder Perspective
RELIABILITY FOR CUSTOMERS
TRUST FOR EMPLOYEES
CR
ED
IBIL
TY
FO
R.
IN
VE
ST
OR
S
RE
SP
ON
SIB
ILIT
Y F
OR
. T
HE
CO
MM
UN
ITY
Generate TrustInstil PrideEmpower
Promote QualityProvide CustomerService
Show ProfitHave GrowthProspects
Serve theCommunityGreen theEnvironment
Adapted from Fombrun (1998)
Tenets of the Reputation Paradigm
(1) The perspectives of multiple stakeholders need to be considered
(2) The main elements of reputation are linked
Definitions
• Image is taken to mean the view of the company held by external stakeholders, especially that held by customers
• Identity is taken to mean the internal, that is the employee’s, view of the company, following Albert and Whetten's (1985) notion of 'How do we see ourselves'.
• Reputation is taken to be a collective term referring to all stakeholders’ views of corporate reputation, including identity and image.
Gaps in Reputation
IDENTITY
(How the company sees itself)
(How external stakeholders see the
company)
DESIRED IMAGE
(What the company says it is)
IMAGE
Organisation Culture, Identity and Image
Adapted from Hatch & Schultz (1997)
ORGANISATION CULTURE
IDENTITY IMAGEVISION &
LEADERSHIP
EMPLOYEE’S WORK EXPERIENCES
EXPERIENCES OF EXTERNAL
GROUPS
Tenets of the Reputation Paradigm
(1) The perspectives of multiple stakeholders need to be considered
(2) The main elements of reputation are linked
(3) Tenet 3 Reputation is Created through Multiple Interaction
What is reputation?
The net result of the interaction of all the experiences, impressions, beliefs, feelings and knowledge that people have about a company, Bevis(1967)
The consistency of outcomes with market signals over time, Herbig et al. (1994)
‘If you have a reputation for always making all the money there is in a deal, you won’t make many deals’. J. Paul Getty,
How Reputation is Created
Company
Industry
Country
Of Origin
PersonalContactDesign
AdvertisingMediaComment
Word of
Mouth
Pri
orE
xper
ienc
ePrice
Points
Dir
ect
Mai
l
From Bernstein (1984)
Tenets of the Reputation Paradigm
(1) The perspectives of multiple stakeholders need to be considered
(2) The main elements of reputation are linked
(3) Reputation is Created through Multiple Interaction
(4) Reputations are Valuable and have Value
Reputation has Value
• Imagine that you had to give up the use of your company’s name, but that you had the chance to pay a percentage of your annual revenue, as a license fee to continue to use the name. What percentage of your turnover do you think it is worth?
• Now estimate how long you would make a contract for, to license back the use of your own name.
Tenets of the Reputation Paradigm
(2)The main elements of reputation are linked
(3)Reputation is Created through Multiple Interaction
(4)Reputations are Valuable and have Value
(5) Reputation can be Managed
Managing Reputation
ENVIRONMENT
CULTUREHISTORY STRATEGY
BEHAVIOUR
COMMUN-ICATIONS
SYMBOLISM
CI MIX
REPUTATION
OUTCOMES
FINANCIAL
HRM
SALES
Source: vanRiel &Balmer (1997)
Tenets of the Reputation Paradigm
(2)The main elements of reputation are linked
(3)Reputation is Created through Multiple Interaction
(4)Reputations are Valuable and have Value
(5) Reputation can be Managed
(6) Reputation and Financial performance are linked
A Positive Reputation
A Favourable Customer
Disposition
A Favourable Employee
Disposition
A Positive Interaction
Employee Retention and
Motivation
Customer and Employee
Satisfaction
Customer Satisfaction and Loyalty
How Does Reputation Create Profit?
Tenets of the Reputation Paradigm
(3)Reputation is Created through Multiple Interaction
(4)Reputations are Valuable and have Value (5) Reputation can be Managed (6) Reputation and Financial performance are
linked (7) Relative Reputation (Ranking) drives
Financial performance
Fortune’s AMAC survey
• Survey of Business Executives• Quality of management, Quality of
Products/services, Innovativeness, Long-term investment value, Financial Soundness, Employee Talent, Use of Corporate Assets and Social responsibility
• Reputation Performance or Performance Reputation?
Tenets of the Reputation Paradigm
(4)Reputations are Valuable and have Value
(5) Reputation can be Managed
(6) Reputation and Financial performance are linked
(7) Relative Reputation (Ranking) drives Financial performance
(8) Reputation can be measured
Measuring Reputation
• Rankings: Fortune AMAC, Fombrun’s RQ, FT ranking of Business Schools
• Qualitative techniques, projective techniques.
• Standardised scales: Aaker (1997) Brand Personality Scale; Davies et al (2001) Corporate personality Scale
Qualitative Techniques
• If MBS came to life as a person, What newspaper would it read? Where would it go on holiday? What car would it drive?
• Compare MBS, LBS and Cranfield. Which is the odd one out and why?
• If MBS came to life as a person, what kind of personality would it have?
Corporate Personality
Agreeableness
Enterprise
Competence
Chic
Ruthlessness
Machismo
Informality
The Corporate Personality Scale
Copyright 2001
AGREEABLENESS
Reassuring
Concerned Honest
Sincere
Socially Responsible
TrustworthyStraightforward
Open
Pleasant
Cheerful
Empathy IntegrityWarmth
Agreeable
Supportive
Copyright 2001
Adventure
ENTERPRISE
Modernity Boldness
Imaginative
Up to Date
Exciting
Extrovert
Daring
Cool
Trendy
Young
Innovative Copyright 2001
COMPETENCE
Technocracy
Corporate
Technical
Leading
Achievement Oriented
Ambitious
Hardworking
Secure
Reliable
Conscientiousness Drive
Copyright 2001
Prestige
CHIC
Snobby
Elitist
Refined
Exclusive
Prestigious
Elegant
Stylish
Charming
SnobberyElegance
Copyright 2001
RUTHLESSNESS
Dominance
Authoritarian
Inward Looking
Selfish
Aggressive
Arrogant
Egotism
Controlling
Copyright 2001
INFORMALITY MACHISMO
Rugged
Tough
Masculine
Easy going
Simple
Casual
Copyright 2001
Tenets of the Reputation Paradigm
(5) Reputation can be Managed (6) Reputation and Financial performance are
linked (7) Relative Reputation (Ranking) drives
Financial performance (8) Reputation can be measured (9) Reputation can be lost more easily than
it can be created
Why is Reputation So Fragile?
• ‘At every word a reputation dies’ Alexander Pope
• ‘Many a man’s reputation would not know his character if they met on the street.’ Elbert Hubbard,’
• Reputation appears fragile because many reputations do not reflect reality
Tenets of the Reputation Paradigm
(8) Reputation can be measured
(9) Reputation can be lost more easily than it can be created
(10)Reputation can best be studied using an Interdisciplinary Approach
Perspectives on Reputation
The Study of Reputation
HR
Marketing/ Branding
Organisational Behaviour
Visual Identity
Finance
Corporate Strategy
Summary
• There are a number of beliefs about reputation management
• Key among these are that what happens inside the firm affects the way it is seen externally