Reputation

Benefits

The numerous benefits of a favorable reputation justify why organizations should be interested in acquiring and sustaining it. Reputation provides competitive advantage and is equally important for government, corporations, civil organizations, and nonprofit organizations. Graduates and professionals look at reputation in their search for jobs; so organizations that are better off are more likely to attract and retain top employees. Customers consider reputation in their buying and purchasing decisions. Investors carefully select where to invest their money. Insurance companies look at reputation, which signals organizations that are lower risk. It proves crucial in entering new markets, as well as in mergers and partnerships. Favorable reputation allows corporations to dictate prices for their products and services. Finally, favorable reputation attracts positive media coverage and becomes extremely valuable in times of crisis.

Because of the presence of new communication technologies, growing numbers of potential crises and increased scrutiny from global pressure groups, reputation is becoming more vulnerable than ever before. During a crisis, stakeholders are more likely to view organizations in a positive manner if there has been a record of previous positive, acceptable, and ethical behavior.

Even though reputation is often conceptualized as an intangible asset, evidence points to a positive correlation between favorable reputation and financial success. This is becoming increasingly important for public relations and strategic communication, because the profession is expected to prove its contribution to the business bottom line.

Measuring reputation contributes to an argument that reputation is an asset that has corporate value. In his reputation quotient model, Charles Fombrun identified six categories for measuring reputation: emotional appeal of an organization, quality and value of products and services, financial performance, vision and leadership, workplace environment, and social responsibility. There is also a yearly published survey “World's Most Admired Companies” by Fortune magazine. Forbes and Reputation Institute conduct a large study on corporate reputation of the United States’ most reputable companies as well as the world's most reputable companies called RepTrak.

Personal and Corporate Reputation

Reputation of corporations’ leaders and CEOs contributes to overall corporate reputation. In certain cases, the reputation of the founder or CEO can be a driving force in determining reputation of the institutions as stakeholders easily identify corporations, products, and highly prominent leaders such as the case of Walt Disney, cofounder of The Walt Disney Company, Steve Jobs, the cofounder of Apple, Bill Gates, cofounder and chairman of Microsoft, and Mark Zuckerberg, cofounder of the social networking site Facebook.

Reputation and Relationship Management

Increasingly recognized reputation value puts the profession of public relations in the spotlight as its leadership role in reputation matters is becoming more strategic and proactive. In that sense, reputation is closely linked with organizations’ relationships with multiple constituencies.

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