Corporate reputation and reputation risk are becoming increasingly relevant for firms, also caused by its relevance for firm value. In this context, this paper provides a comprehensive survey of ...empirical evidence in the literature regarding the relation between reputation damaging events, corporate reputation, and corporate financial performance, thereby also taking into account stakeholder behavior. The review is also intended to determine to what extent the current literature allows a holistic understanding of these relationships in the sense of the causal chain of events, which is of high relevance when managing reputation and reputation risk. Thus, focus is first laid on empirical evidence regarding the impact of corporate reputation on stakeholder behavior and on financial performance. Next, the event study literature regarding the effect of reputation damaging events on corporate reputation and financial performance is reviewed, and, finally, implications for risk management are discussed along with the need for future research.
Corporate reputation is critical for cultivating stakeholder relationships and, specifically, for regaining public trust. Corporate reputation results from the firm's interactions with stakeholders, ...emphasizing the important role employees play in reputation management. However, employees are not necessarily aware of, or prepared for, this extra-role assignment, indicating a gap in research and a managerial challenge. The purpose of the present article is to identify how employees' awareness of their impact on their employers' reputation is influenced by pride, job satisfaction, affective commitment, and perceived corporate reputation. An online survey of employees working for firms ranked in Fortune's America's Most Admired Companies Index provides empirical evidence. The findings underline the prominent effect pride in membership has regarding employees' awareness of their impact on corporate reputation. Study findings further deliver insights into opportunities and risks for managers who wish to use internal reputation building strategies to enhance corporate reputation.
Responsible supply chain management (RSCM) can help protect a firm's corporate reputation by shielding it from negative media attention and consumer boycotts. RSCM can also enhance a firm's corporate ...reputation, which allows firms to secure business contracts and penetrate new market segments successfully. This study empirically examines: (i) the extent to which responsible supply chain management practices is driven by a desire to protect corporate reputation; and (ii) whether responsible supply chain management can enhance corporate reputation and thereby generate competitive advantage to the firm. We draw on primary and secondary datasets across seven firms, spanning the publishing, technology, beverage, tobacco, finance and home improvement sectors. We find compelling evidence to suggest that firms often engage in RSCM due to a desire to protect corporate reputation. Similarly, we find empirical evidence to suggest that responsible supply chain practices can enhance reputation and thereby create competitive benefits, although this link is not as profound as the relationship between RSCM and reputation protection and there are significant variations across industries. These findings have significant implications for marketing theory and, in particular, industrial marketers, who are increasingly expected to implement responsible supply chain practices.
•This study furthers the debate about the strategic role of responsible supply chain management (RSCM).•We explore the extent to which RSCM is driven by a desire to protect reputation.•Our conceptual model explicitly emphasizes that RSCM can play both a reputational protection and enhancement role.•Our study explores a rich dataset, going beyond anecdotal evidence as often offered by prior studies.•Our analytical approach allows us to analyze both hetero- and homogeneity across companies and sectors.
Insufficient research exists on the impact of reputation in online health-care market communities, especially from the multilevel and cross-level perspectives. Based on prior research on individual ...and organizational reputation, we hypothesize multilevel and cross-level reputation determinants of physicians' performance in online health-care market communities. Using hierarchical linear modeling, we analyzed the data of 47,182 physicians from 660 hospitals in a Chinese online health-care market community to test our hypotheses. Our results suggest that the number of physicians' appointments is positively associated with their individual offline and online reputations, as well as the offline and online reputation of the hospital in which the physicians work. We also find that organizational reputation moderates the relationship between an individual's reputation and a physician's performance, in such a way that the hospital's offline reputation increases the importance of physicians' online reputation in promoting the number of physicians' appointments. However, the hospital's online reputation enhances the relationship between physicians' offline reputation and the number of appointments. Our study contributes to existing theories of reputation and the signaling theory, and also provides physicians with guidelines that support them in effectively improving their performance.
It has recently been argued that corporate social responsibility (CSR) is ‘political’. It has been neglected however, that firms also operate politically in a traditional sense, in seeking to secure ...favourable political conditions for their businesses. We argue that there are potential synergies between CSR and corporate political activity (CPA) that are often overlooked by firms and that recognition of these synergies will stimulate firms to align their CSR and CPA. We develop a conceptual model that specifies how various configurations of a firm's CSR and CPA – alignment, misalignment, and non‐alignment – affect the firm's reputation beyond the separate reputation effects of CSR and CPA. This model has important implications for understanding how and why firms should pay attention to their CPA and CSR configurations, and thereby contributes to the broader issue of why firms should make sure that they are consistent in terms of responding to stakeholder concerns.
How can we know what stakeholders think and feel about brands in real time and over time? Most brand reputation measures are at the aggregate level (e.g., the Interbrand “Best Global Brands” list) or ...rely on customer brand perception surveys on a periodical basis (e.g., the Y&R Brand Asset Valuator). To answer this question, brand reputation measures must capture the voice of the stakeholders (not just ratings on brand attributes), reflect important brand events in real time, and connect to a brand’s financial value to the firm. This article develops a new social media–based brand reputation tracker by mining Twitter comments for the world’s top 100 brands using Rust–Zeithaml–Lemon’s value–brand–relationship framework, on a weekly, monthly, and quarterly basis. The article demonstrates that brand reputation can be monitored in real time and longitudinally, managed by leveraging the reciprocal and virtuous relationships between the drivers, and connected to firm financial performance. The resulting measures are housed in an online longitudinal database and may be accessed by brand reputation researchers.
Direct relationship between corporate social responsibility (CSR) and firm performance has been examined by many scholars, but this direct test seems to be spurious and imprecise. This is because ...many factors indirectly influence this relation. Therefore, this study considers sustainable competitive advantage, reputation, and customer satisfaction as three probable mediators in the relationship between CSR and firm performance. The findings from 205 Iranian manufacturing and consumer product firms reveal that the link between CSR and firm performance is a fully mediated relationship. The positive effect of CSR on firm performance is due to the positive effect CSR has on competitive advantage, reputation, and customer satisfaction. The final findings show that only reputation and competitive advantage mediate the relationship between CSR and firm performance. Taken together, these findings suggest a role for CSR in indirectly promoting firm performance through enhancing reputation and competitive advantage while improving the level of customer satisfaction.
Through a meta-analytical approach, we test the antecedents and consequences of corporate reputation, examining specifically the moderating roles of three study variables: country of study, ...stakeholder group, and reputational measure. The study presents a comprehensive overview of three moderating factors for the relationship of corporate reputation with its antecedents and consequences in the literature from 101 quantitative studies. Our findings suggest that practitioners need to exercise considerable caution when developing and managing the reputation of their organizations through the use of research evidence from various countries, with different stakeholder groups and when employing diverse reputational measures.
•We test three moderators for relationships of corporate reputation.•Meta-analytical approach is used to test moderating influences.•Country of study, stakeholder group and reputational measure moderate association of CR with its antecedents/consequences.•Some useful opportunities for further meta-analyses are suggested.
In a product choice game played between a long lived seller and an infinite sequence of buyers, we assume that buyers cannot observe past signals. To facilitate the analysis of applications such as ...online auctions (e.g. eBay), online shopping search engines (e.g. BizRate.com) and consumer reports, we assume that a central mechanism observes all past signals, and makes public announcements every period. The set of announcements and the mapping from observed signals to the set of announcements is called a rating system. We show that, absent reputation effects, information censoring cannot improve attainable payoffs. However, if there is an initial probability that the seller is a commitment type that plays a particular strategy every period, then there exists a finite rating system and an equilibrium of the resulting game such that, the expected present discounted payoff of the seller is almost his Stackelberg payoff
after every history. This is in contrast to Cripps, Mailath and Samuelson (2004)
5, where it is shown that reputation effects do not last forever in such games if buyers can observe all past signals. We also construct finite rating systems that increase payoffs of almost all buyers, while decreasing the sellerʼs payoff.
How do firms repair their reputations after a serious accounting restatement? To answer this question, we review firms' press releases and identify 1,765 reputation-building actions taken by: (1) 94 ...restating firms in the periods before and after their restatement; and (2) a set of matched control firms during contemporaneous periods. We posit that firms have incentives to target multiple stakeholders in a reputation repair strategy—including capital providers, customers, employees, and geographic communities—and that actions targeting each group generate positive market returns as reputation capital is repaired. Consistent with our predictions, the frequency of, and stock returns to, reputation-building actions are greater for restating firms in the period after their restatement than for the control groups. In addition, firm characteristics predict the types of stakeholders targeted by firms. Finally, actions targeted at both capital providers and other stakeholders are associated with improvements in the restating firm's financial reporting credibility.
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