reputation

Since 1980, the study of 'corporate reputation' has attracted growing scholarly attention from economics, sociology, and management.{{Cite book|title=Oxford Handbook of Corporate Reputation|last1=Barnett|first1=Michael|last2=Pollock|first2=Timothy|publisher=Oxford University Press|year=2012|isbn=9780199596706|location=United Kingdom|pages=22–36}} The concept of reputation has undergone substantial evolution in the academic literature over the past several decades.{{Cite journal|last1=Money|first1=K|last2=Hillenbrand|first2=C|date=2006|title=Using reputation measurement to create value: An analysis and integration of existing measures|journal=Journal of General Management|volume=32|pages=1–12|doi=10.1177/030630700603200101|s2cid=146416325}} Terminology such as reputation, branding, image and identity is often used interchangeably in both the popular press and – until recently – in the academic literature, as well.

The academic literature has generally settled on a small cluster of perspectives on "what reputation is" in a company context.

Mark C. Suchman (1995) examines the relationship between legitimacy, status, and reputation, emphasizing that while these concepts are interconnected, they represent distinct forms of social evaluation. Legitimacy refers to the degree to which an organization's actions align with societal norms and values, status reflects its position within a social hierarchy, and reputation is based on assessments of its past actions and achievements. Understanding these distinctions is essential for organizations seeking to navigate their social environments successfully.Suchman, M. C. (1995). "Managing Legitimacy: Strategic and Institutional Approaches." Academy of Management Review, 20(3), 571–610. [https://doi.org/10.2307/258788 doi:10.2307/258788]

Economists use game-theory to describe corporate reputations as strategic signals that companies use to convey to markets some of their qualities and abilities.{{Cite journal|last1=Milgrom|first1=P|author1-link=Paul Milgrom|last2=Roberts|first2=J|date=1982|title=Predation, reputation, and entry deterrence|url=https://www.google.com/search?q=journal+of+economic+theory|journal=Journal of Economic Theory|volume=27|issue=2|pages=280–312|via=Elsevier|doi=10.1016/0022-0531(82)90031-X|doi-access=free|hdl=10419/220787|hdl-access=free}} Sociologists view corporate reputation as descriptions of the relative status that companies occupy in an institutional field of rivals and stakeholders.{{Cite journal|last1=DiMaggio|first1=PJ|last2=Powell|first2=WW|date=1983|title=The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields|journal=American Sociological Review|volume=48|issue=2|pages=167–160|doi=10.2307/2095101|jstor=2095101|s2cid=22470481 |url=https://bibliotecadigital.fgv.br/ojs/index.php/rae/article/view/37123 }} Management scholars describe corporate reputations in one of two main ways,{{Cite journal|last1=Lange|first1=Donald|last2=Lee|first2=Peggy M.|last3=Dai|first3=Ye|date=2011-01-01|title=Organizational Reputation: A Review|journal=Journal of Management|language=en|volume=37|issue=1|pages=153–184|doi=10.1177/0149206310390963|s2cid=143793428|issn=0149-2063}} including:

• the broad view: as an aggregation of perceptions that form as audiences judge the behaviors of companies.{{Cite journal|last1=Fombrun|first1=CJ|author1-link=:ht:Charles Fombrun|last2=Shanley|first2=MS|date=1990|title=What's in a name? Reputation building and corporate strategy|journal=Academy of Management Journal|volume=33|issue=2|pages=233–258|doi=10.5465/256324|doi-broken-date=1 November 2024 }}
• This is often evaluated by broad ranking measures of the company as a whole, such as the Fortune Most Admired Companies rankings{{Cite journal|last1=Pfarrer|first1=Michael D.|last2=Pollock|first2=Timothy G.|last3=Rindova|first3=Violina P.|date=2010-10-01|title=A Tale of Two Assets: The Effects of Firm Reputation and Celebrity on Earnings Surprises and Investors' Reactions|journal=Academy of Management Journal|volume=53|issue=5|pages=1131–1152|doi=10.5465/amj.2010.54533222|issn=0001-4273}}{{Cite journal|last1=Brown|first1=Brad|last2=Perry|first2=Susan|date=1994-10-01|title=Removing the Financial Performance Halo From Fortune's "Most Admired" Companies|journal=Academy of Management Journal|volume=37|issue=5|pages=1347–1359|doi=10.5465/256676|doi-broken-date=1 November 2024 |issn=0001-4273}}
• the specific view: as an assessment, by some specific audience, of the company's ability to perform or behave in a certain way.{{Cite journal|last1=Rindova|first1=Violina P.|last2=Williamson|first2=Ian O.|last3=Petkova|first3=Antoaneta P.|last4=Sever|first4=Joy Marie|date=2005|title=Being Good or Being Known: An Empirical Examination of the Dimensions, Antecedents, and Consequences of Organizational Reputation|journal=The Academy of Management Journal|volume=48|issue=6|pages=1033–1049|doi=10.2307/20159728|jstor=20159728|issn=0001-4273|doi-access=free}}{{Cite web|last1=Jensen|first1=Michael|last2=Kim|first2=Heeyon|last3=Kim|first3=Bo Kyung|editor2-first=Michael L|editor2-last=Barnett|editor1-first=Timothy G|editor1-last=Pollock|date=2012-07-19|title=Meeting Expectations: A Role-Theoretic Perspective on Reputation|url=https://www.oxfordhandbooks.com/view/10.1093/oxfordhb/9780199596706.001.0001/oxfordhb-9780199596706-e-7|access-date=2020-08-25|website=The Oxford Handbook of Corporate Reputation|language=en|doi=10.1093/oxfordhb/9780199596706.001.0001|isbn=9780199596706}} These are split into two broad categories: (a) outcome/capability reputation and (b) behavior/character reputation,{{Cite journal|last1=Mishina|first1=Yuri|last2=Block|first2=Emily S.|last3=Mannor|first3=Michael J.|date=2012|title=The path dependence of organizational reputation: how social judgment influences assessments of capability and character|journal=Strategic Management Journal|language=en|volume=33|issue=5|pages=459–477|doi=10.1002/smj.958|hdl=10044/1/15612|s2cid=167766573 |issn=1097-0266|hdl-access=free}} which is intended to capture both the economic and sociological forms of reputation.{{Cite journal|last1=Parker|first1=Owen|last2=Krause|first2=Ryan|last3=Devers|first3=Cynthia E.|date=2019-04-22|title=How Firm Reputation Shapes Managerial Discretion|url=http://journals.aom.org/doi/10.5465/amr.2016.0542|journal=Academy of Management Review|language=en|volume=44|issue=2|pages=254–278|doi=10.5465/amr.2016.0542|s2cid=169617029|issn=0363-7425|url-access=subscription}}
• (a) outcome/capability reputation: this reputation type involves an assessment of how well the company performs on a certain dimension. The most common examples of these is performing well financially{{Cite journal|last1=Roberts|first1=Peter W.|last2=Dowling|first2=Grahame R.|date=2002|title=Corporate reputation and sustained superior financial performance|journal=Strategic Management Journal|language=en|volume=23|issue=12|pages=1077–1093|doi=10.1002/smj.274|issn=1097-0266}} or providing high quality products or services.{{Cite journal|last1=Rhee|first1=Mooweon|last2=Haunschild|first2=Pamela R.|date=2006-02-01|title=The Liability of Good Reputation: A Study of Product Recalls in the U.S. Automobile Industry|journal=Organization Science|volume=17|issue=1|pages=101–117|doi=10.1287/orsc.1050.0175|issn=1047-7039}}{{Cite journal|last1=Benjamin|first1=Beth A.|last2=Podolny|first2=Joel M.|author2-link=Joel M. Podolny|date=1999-09-01|title=Status, Quality, and Social Order in the California Wine Industry|journal=Administrative Science Quarterly|language=en|volume=44|issue=3|pages=563–589|doi=10.2307/2666962|jstor=2666962|s2cid=143602162|issn=0001-8392}} All of these dimensions can be objectively ordered, such as better/worse financial performance (as evaluated by objective, market-based measures of financial performance) or better/worse product quality (as evaluated by a collection of users).
• (b) behavior/character reputation: this reputation type is said to arise when a company is recognized as consistently behaving in a certain way,{{Cite journal|last1=Milgrom|author1-link=Paul Milgrom|first1=Paul|last2=Roberts|first2=John|date=1986|title=Price and Advertising Signals of Product Quality|journal=Journal of Political Economy|volume=94|issue=4|pages=796–821|doi=10.1086/261408|jstor=1833203|s2cid=154506015|issn=0022-3808|url=http://cowles.yale.edu/sites/default/files/files/pub/d07/d0709.pdf|access-date=2020-09-04|archive-date=2020-08-06|archive-url=https://web.archive.org/web/20200806034037/http://cowles.yale.edu/sites/default/files/files/pub/d07/d0709.pdf|url-status=dead}}{{Cite journal|last1=Weigelt|first1=Keith|last2=Camerer|first2=Colin|author2-link=Colin Camerer|date=1988|title=Reputation and corporate strategy: A review of recent theory and applications|journal=Strategic Management Journal|language=en|volume=9|issue=5|pages=443–454|doi=10.1002/smj.4250090505|issn=1097-0266}} in a manner that is relatively devoid of objectively identifiable performance. For instance, a company might prioritize investment in innovation, the improvement of its operational efficiency, or sourcing from local suppliers.{{Cite journal|last1=Ravasi|first1=Davide|last2=Rindova|first2=Violina|last3=Etter|first3=Michael|last4=Cornelissen|first4=Joep|date=2018-04-11|title=The Formation of Organizational Reputation|url=https://journals.aom.org/doi/10.5465/annals.2016.0124|journal=Academy of Management Annals|volume=12|issue=2|pages=574–599|doi=10.5465/annals.2016.0124|s2cid=150287794|issn=1941-6520|hdl=10398/956fac68-89a9-44b3-bbf1-99d794702f8c|hdl-access=free}}{{Cite journal|last1=Bitektine|first1=Alex|last2=Hill|first2=Kevin|last3=Song|first3=Fei|last4=Vandenberghe|first4=Christian|date=2018-09-25|title=Organizational Legitimacy, Reputation, and Status: Insights from Micro-Level Measurement|url=https://journals.aom.org/doi/10.5465/amd.2017.0007|journal=Academy of Management Discoveries|volume=6|issue=1|pages=107–136|doi=10.5465/amd.2017.0007|s2cid=149754189|url-access=subscription}}

In practice, corporate reputations are revealed by the relative rankings of companies created and propagated by information intermediaries.{{Cite journal|last1=Deephouse|first1=David L.|last2=Heugens|first2=Pursey P. M. A. R.|date=2009-06-01|title=Linking Social Issues to Organizational Impact: The Role of Infomediaries and the Infomediary Process|journal=Journal of Business Ethics|language=en|volume=86|issue=4|pages=541–553|doi=10.1007/s10551-008-9864-3|s2cid=62806448|issn=1573-0697}} For example, business magazines and newspapers such as Fortune, Forbes, Business Week, Financial Times, and The Wall Street Journal regularly publish lists of the best places to work, the best business schools, or the most innovative companies. These rankings are explicit orderings of corporate reputations, and the relative positions of companies on these rankings reflect their relative performance on various cognitive attributes. Corporate reputations are found to influence the attractiveness of ranked companies as suppliers of products, as prospective employers, and as investments.{{Cite book|title=Reputation: Realizing Value from Corporate Image|last=Fombrun|first=Charles J|author-link=:ht:Charles Fombrun|publisher=Harvard Business School Press|year=1996|isbn=9780875846330|location=Cambridge, MA|url-access=registration|url=https://archive.org/details/reputationrealiz0000fomb}} For those reasons, companies themselves have become increasingly involved with the practice of reputation management.

Like any social construct, reputation is similar to (i.e., convergent with) certain concepts and different (i.e., discriminant) from others. Reputation can be compared to other "social evaluation" or "social judgment" constructs. For instance, reputation is said to be convergent with adjacent concepts like corporate image, identity, celebrity, status, legitimacy, social approval (likability), and visibility (prominence), but discriminant from related constructs like stigma and infamy.{{Cite book|last=Roulet, Thomas (Thomas J.)|url=https://www.worldcat.org/oclc/1143840507|title=The power of being divisive : understanding negative social evaluations|date=September 2020|isbn=978-1-5036-1390-4|location=Stanford, California|oclc=1143840507}} Reputation is often considered to be a pragmatic evaluation – actors determine whether the target of the evaluation can be seen as useful to them.{{Cite journal|last=Suchman|first=Mark C.|author-link=Mark C. Suchman|date=July 1995|title=Managing Legitimacy: Strategic and Institutional Approaches|url=http://dx.doi.org/10.5465/amr.1995.9508080331|journal=Academy of Management Review|volume=20|issue=3|pages=571–610|doi=10.5465/amr.1995.9508080331|s2cid=168050730 |issn=0363-7425|url-access=subscription}}

Until recently, the relationships with these adjacent constructs were merely theoretical; that is, they were not formally tested or empirically validated{{Cite journal|last1=MacKenzie|first1=Scott B.|last2=Podsakoff|first2=Philip|author2-link=Philip Podsakoff|last3=Podsakoff|first3=Nathan|date=2011-06-01|title=Construct measurement and validation procedures in MIS and behavioral research|url=https://dl.acm.org/doi/abs/10.5555/2017507.2017510|journal=MIS Quarterly|volume=35|issue=2|pages=293–334|doi=10.2307/23044045|jstor=23044045|language=EN|url-access=subscription}} for their "nomological relationships" with these other, related constructs.

• Conceptual relationships: In 2012, the Oxford Handbook of Corporate Reputation was released to provide some clarity to the increasingly fragmented field of social evaluation constructs, all of which had been referred to (either implicitly or explicitly) under an umbrella of "reputation" concepts. In 2020, the introductory part of The Power of Being Divisive: Understanding Negative Evaluations, develops a framework to disentangle a variety of concepts in the field of social evaluations – in particular making the point that negative and positive evaluations can be on different continua, and social actors can be both positively and negatively evaluated at the same time. In this opus and in the Oxford handbook, scholars made incremental efforts to distinguish between handfuls of these constructs, such as:
• reputation vs. celebrity
• reputation vs. status{{Cite journal|last1=Stern|first1=Ithai|last2=Dukerich|first2=Janet M.|last3=Zajac|first3=Edward|date=2014|title=Unmixed signals: How reputation and status affect alliance formation|journal=Strategic Management Journal|language=en|volume=35|issue=4|pages=512–531|doi=10.1002/smj.2116|issn=1097-0266}}{{Cite journal|last1=Pollock|first1=Timothy G.|last2=Lee|first2=Peggy M.|last3=Jin|first3=Kyuho|last4=Lashley|first4=Kisha|date=2015-09-01|title=(Un)Tangled: Exploring the Asymmetric Coevolution of New Venture Capital Firms' Reputation and Status|journal=Administrative Science Quarterly|language=en|volume=60|issue=3|pages=482–517|doi=10.1177/0001839215585602|s2cid=54640595|issn=0001-8392}}
• reputation vs. legitimacy vs. status{{Cite journal|last=Bitektine|first=Alex|date=2011-01-01|title=Toward a Theory of Social Judgments of Organizations: The Case of Legitimacy, Reputation, and Status|journal=Academy of Management Review|volume=36|issue=1|pages=151–179|doi=10.5465/amr.2009.0382|issn=0363-7425}}
• reputation vs. social approval{{Cite journal|last1=Bundy|first1=Jonathan|last2=Pfarrer|first2=Michael D.|date=2014-10-16|title=A Burden of Responsibility: The Role of Social Approval at the Onset of a Crisis|journal=Academy of Management Review|volume=40|issue=3|pages=345–369|doi=10.5465/amr.2013.0027|issn=0363-7425}}
• reputation vs. stigma{{Cite web|last1=Mishina|first1=Yuri|last2=Devers|first2=Cynthia E|editor2-first=Michael L|editor2-last=Barnett|editor1-first=Timothy G|editor1-last=Pollock|date=2012-07-19|title=On Being Bad: Why Stigma is not the Same as a Bad Reputation|url=https://www.oxfordhandbooks.com/view/10.1093/oxfordhb/9780199596706.001.0001/oxfordhb-9780199596706-e-10|access-date=2020-08-25|website=The Oxford Handbook of Corporate Reputation|language=en|doi=10.1093/oxfordhb/9780199596706.001.0001|isbn=9780199596706}}
• reputation vs. status vs. celebrity vs. stigma{{Cite journal|last1=Pollock|first1=Timothy G.|last2=Lashley|first2=Kisha|last3=Rindova|first3=Violina P.|last4=Han|first4=Jung-Hoon|date=2019-04-08|title=Which of These Things Are Not Like the Others? Comparing the Rational, Emotional, and Moral Aspects of Reputation, Status, Celebrity, and Stigma|journal=Academy of Management Annals|volume=13|issue=2|pages=444–478|doi=10.5465/annals.2017.0086|s2cid=150762458|issn=1941-6520}}
• Empirical relationships: In 2020, Bitektine and colleagues{{Cite journal|last1=Bitektine|first1=Alex|last2=Hill|first2=Kevin|last3=Song|first3=Fei|last4=Vandenberghe|first4=Christian|date=2018-09-25|title=Organizational Legitimacy, Reputation, and Status: Insights from Micro-Level Measurement|journal=Academy of Management Discoveries|volume=6|issue=1|pages=107–136|doi=10.5465/amd.2017.0007|s2cid=149754189}} conducted the first major construct validation study to: (a) create scales for the constructs of reputation, cognitive legitimacy, sociopolitical legitimacy, and status, and (b) empirically distinguish between them by undertaking a multiple studies involving several confirmatory factor analyses.
• This construct validation effort addressed the "broad view" of reputation as a company-level evaluation (not an evaluation for specific attributes). The scale items for reputation that resulted from this effort, as evaluated by an audience of respondents representing the general public, included: "The reputation of this company is excellent", "[this] is a reputable company", and "[this] is a dependable company".
• There still exists no construct validation effort for the "specific view" of reputation (i.e., that reputation is best understood as a specific audience's view of the company with respect to a specific attribute).

Myriad reputation studies from the 1980s to the 2000s demonstrated that a company's reputation was positively related to various performance measures, such as financial success and profitability.{{Cite journal|last=Rao|first=Hayagreeva|author-link=Hayagreeva Rao|date=1994|title=The Social Construction of Reputation: Certification Contests, Legitimation, and the Survival of Organizations in the American Automobile Industry: 1895–1912|journal=Strategic Management Journal|language=en|volume=15|issue=S1|pages=29–44|doi=10.1002/smj.4250150904|issn=1097-0266}} However, more recent work demonstrated that reputation can be both "a benefit and a burden",{{Cite journal|last1=Zavyalova|first1=Anastasiya|last2=Pfarrer|first2=Michael D.|last3=Reger|first3=Rhonda K.|last4=Hubbard|first4=Timothy D.|date=2015-07-24|title=Reputation as a Benefit and a Burden? How Stakeholders' Organizational Identification Affects the Role of Reputation Following a Negative Event|journal=Academy of Management Journal|volume=59|issue=1|pages=253–276|doi=10.5465/amj.2013.0611|issn=0001-4273}} suggesting that "the bigger you are, the harder you (might) fall" with respect to reputation.

Relatedly, researchers have theorized or demonstrated that a company's reputation could also influence the decisions and perceptions of its managers;{{Cite journal|last1=Petkova|first1=Antoaneta P.|last2=Wadhwa|first2=Anu|last3=Yao|first3=Xin|last4=Jain|first4=Sanjay|date=2013-05-28|title=Reputation and Decision Making under Ambiguity: A Study of U.S. Venture Capital Firms' Investments in the Emerging Clean Energy Sector|journal=Academy of Management Journal|volume=57|issue=2|pages=422–448|doi=10.5465/amj.2011.0651|s2cid=167381065|issn=0001-4273}} in some cases, reputation can promote the use of risk-reduction strategies by managers as they seek to preserve the reputation they have cultivated. In other cases, researchers argue that reputation can embolden managers to take risks in areas unrelated to their reputation, since stakeholders may be focused on the reputation itself and inattentive to other areas of the company.{{Cite journal|last=Barnett|first=Michael L.|date=2012-02-03|title=Why Stakeholders Ignore Firm Misconduct|journal=Journal of Management|language=en-US|volume=40|issue=3|pages=676–702|doi=10.1177/0149206311433854|s2cid=146428499|issn=0149-2063}}{{Cite web|title=APA PsycNet|url=https://psycnet.apa.org/record/1991-97723-000|access-date=2020-08-25|website=psycnet.apa.org|language=en}}

{{main|Reputation management}}

Many organizations create public relations and corporate communication departments dedicated to assisting companies with reputation management. In addition, many public relations and consulting firms claim expertise in reputation management. The growth of the public relations industry has largely been due to the rising demand for companies to establish credibility and reputation.{{cite web|url=http://worldreport.holmesreport.com/|title=Global PR Industry Growth Surges To 11% in 2013|publisher=Arun Sudhaman|access-date=3 January 2015|url-status=dead|archive-url=https://web.archive.org/web/20150115100426/http://worldreport.holmesreport.com/|archive-date=15 January 2015}} Incidents which damage a company's reputation for honesty or safety may cause serious damage to finances. For example, in 1999 Coca-Cola lost $60 million (by its own estimate) after schoolchildren reported suffering from symptoms like headaches, nausea and shivering after drinking its products.{{cite web |url=http://www.zurich.com/main/productsandsolutions/industryinsight/2004/june2004/industryinsight20040603_003.htm |title=Share price is always vulnerable |access-date=2005-03-28 |url-status=bot: unknown |archive-url=https://web.archive.org/web/20080503043118/http://www.zurich.com/main/productsandsolutions/industryinsight/2004/june2004/industryinsight20040603_003.htm |archive-date=May 3, 2008 }}

Although most companies see reputation management as a central part of a CEO's role, managing reputation involves a set of ongoing activities that are best managed when they are delegated to a specific individual in the organization. This is why some companies have created the position of chief reputation officer (CRO). A growing number of people in the business world now have the word "reputation" in their titles – including Dow Chemical, SABMiller, Coca-Cola, Allstate, Repsol YPF, Weber Shandwick, and GlaxoSmithKline (although no longer). Hoover's shows a list of such officers.

Social media like Twitter, Linked In, and Facebook have made it increasingly important for companies to monitor their online reputations in order to anticipate and respond to criticisms of their actions. There are two main routes that customers can take when complaining about companies: individual-direct response or broadcast-based response. For a company, it takes a lot of time and effort to address individual-direct responses. One study showed that "...72% of customers expect a reply within one hour."{{Cite journal|date=2017-08-14|title=Tweeting your way out of disaster|journal=Strategic Direction|volume=33|issue=8|pages=17–19|doi=10.1108/sd-05-2017-0079|issn=0258-0543}} In order to best recover from negative complaints on social media, it is important for a company to prove its authenticity by providing more specific answers directly to its critics.

{{main|Reputation capital}}

A corporate reputation can be managed, accumulated and traded in for trust, legitimization of a position of power and social recognition, and people are prepared to pay a premium price for goods and services offered, which in turn generates higher customer loyalty, a stronger willingness from shareholders to hold on to shares in times of crisis, and greater likelihood to invest in the company's stock.{{Cite journal|last1=Dierickx|first1=I|last2=Cool|first2=K|date=1989|title=Asset stock accumulation and sustainability of competitive advantage|journal=Management Science|volume=35|issue=12|pages=1504–1511|doi=10.1287/mnsc.35.12.1504}} Therefore, reputation is one of the most valuable forms of "capital" of a company. "Delivering functional and social expectations of the public on the one hand and manage to build a unique identity on the other hand creates trust and this trust builds the informal framework of a company. This framework provides "return in cooperation" and produces reputation capital. A positive reputation will secure a company or organisation long-term competitive advantages. The higher a company's reputation capital, the lower the costs of supervising and exercising control."{{cite book|author1=Klewes, Joachim |author2=Wreschniok, Robert |name-list-style=amp |year=2010|title=Reputation Capital: Building and Maintaining Trust in the 21st Century|publisher=Springer |isbn=978-3-642-01629-5}}

According to stakeholder theory, corporations should be managed for the benefit of all their "stakeholders," not just their shareholders. Stakeholders of a company include any individual or group that can influence or is influenced by a company's practices.{{Cite book|title=Strategic Management: A Stakeholder Approach|last=Freeman|first=R. Edward|author-link=R. Edward Freeman|publisher=Pitman|year=1984|isbn=9780521151740|location=Boston, MA|url-access=registration|url=https://archive.org/details/strategicmanagem0000free}} The stakeholders of a company can be suppliers, consumers, employees, shareholders, financial community, government, and media. Companies must properly manage the relationships between stakeholder groups and they must consider the interest(s) of each stakeholder group carefully. Therefore, it becomes essential to integrate public relations into corporate governance to manage the relationships between these stakeholders which will enhance the organization's reputation. Corporations or institutions which behave ethically and govern in a good manner build reputational capital which is a competitive advantage. A good reputation enhances profitability because it attracts customers to products, investors to securities and employees to its jobs. A company's reputation is an intangible asset and a source of competitive advantage against rivals because the company will be viewed as more reliable, credible, trustworthy and responsible to its employees, customers, shareholders and financial markets.

In addition, according to MORI's survey of about 200 managers in the private sector, 99%

responded that the management of corporate reputation is very (83%) or fairly (16%) important. Reputation is a reflection of companies' culture and identity. Also, it is the outcome of managers' efforts to prove their success and excellence. It is sustained through acting reliably, credibly, trustworthily and responsibly in the market. It can be sustained through consistent communication activities both internally and externally with key stakeholder groups. This directly influences a public company's stock prices in the financial market. Therefore, this reputation makes a reputational capital that becomes a strategic asset and advantage for that company. As a consequence, public relations must be used in order to establish long lasting relationships with the stakeholders, which will enhance the reputation of the company.Özekmekçi, Abdullah Mert (2004) "The Correlation between Corporate Governance and Public Relations", Istanbul Bilgi University

Reputation models can be placed in a broader framework that distinguishes reputation from its underlying causes and from its consequences. This approach is important to clarify the meaning of reputation.

• Causes of reputation are seen to reside in stakeholder experiences. Stakeholder experiences relate to a company's day-to-day business operations, its branding and marketing and "noise" in the system, such as the media and word of mouth. Further causes of reputation may include the perceived innovativeness of a company, the customers' expectations, the (perceived) quality of the company's goods and services and the subsequent customer satisfaction, all of which differ according to the respective customers' cultural background.Falkenreck, C. & Wagner, R.: The Impact of Perceived Innovativeness on Maintaining a Buyer-Seller Relationship in Health Care Markets: A Cross-Cultural Study. In: Journal of Marketing Management 3–4 (2011), Nr. 27, S. 225–242.
• The consequences of reputation reside in the behaviors (supportive or resistant) that stakeholders demonstrate towards a company. Behaviors such as advocacy, commitment, and cooperation are key positive outcomes of a good reputation. Boycotts{{Cite journal|last1=McDonnell|first1=Mary-Hunter|last2=King|first2=Brayden|date=2013-08-09|title=Keeping up Appearances: Reputational Threat and Impression Management after Social Movement Boycotts|journal=Administrative Science Quarterly|language=en|doi=10.1177/0001839213500032|s2cid=145194950}} and lawsuits are key negative outcomes of a bad reputation.

Organizations frequently make missteps that cause them to lose the positive regard of stakeholders.{{cite book|last=Gaines-Ross|first=Leslie|title=Corporate Reputation: 12 Steps to Safeguarding and Recovering Reputation|url=https://archive.org/details/corporatereputat0000gain|url-access=registration|publisher=Wiley|date=2 January 2008|isbn=978-0470171509}} In the wake of studies addressing the disproportionate penalties that accrue to high reputation firms when they make such missteps, reputation researchers have proposed models to account for both reputation damage and reputation repair, summarizing prior work in disciplines including economics, marketing, accounting, and management.{{Cite journal|last1=Rhee|first1=Mooweon|last2=Valdez|first2=Michael E.|date=2009|title=Contextual Factors Surrounding Reputation Damage with Potential Implications for Reputation Repair|journal=The Academy of Management Review|volume=34|issue=1|pages=146–168|doi=10.5465/amr.2009.35713324|jstor=27759990|issn=0363-7425}}

In the context of brand extension strategies, many companies rely on reputation transfer as a means of transferring the good reputation of a company and its existing products to new markets and new products. Consumers who are already familiar with other products of an established brand, exhibiting customer satisfaction and loyalty, will more easily accept new products of the same brand. In contrast to brand extension, the general concept of reputation transfer also requires the transfer of a company's values and identity to the new products and/or services and the related brands when entering new markets. It is important, however, to pay attention to the image fit between preexisting and new brands, for this factor has been proven to be critical for the success of brand extensions.Voelckner, F and Sattler, H. (2007) 'Empiric Generalizability of Consumer Evaluations of Brand Extensions', International Journal of Research in Marketing, 24, pp. 149–162. In contrast to the special case of brand extension, the general concept of reputation transfer also requires the transfer of the values and identity of a company to the new products and/or services and the related brands when entering new markets. A strong image might therefore even hamper the introduction of new product lines if customers do not associate the competences relevant to the new market/category/product line with the existing company or brand.

A company's reputation is furthermore influenced by culture, as nationalities differ with regard to how valued specific aspects of the company's brand identity are in the respective national culture (e.g. environmental concerns or work ethics) as well as with regard to popular cultural dimensions (e.g. Hofstede). Subsequently, these differences impact the success of reputation transfer significantly.Falkenreck, C. & Wagner, R.: Impact of Direct Marketing Activities on Company Reputation Transfer Success: Empirical Evidence from Five Different Cultures. Proceedings of the 12th International Conference on Corporate Reputation, Brand Identity, and Competitiveness. Beijing: 2008

{{Unreferenced section|date=May 2021}}

The cognitive view of reputation has become increasingly prominent in reputation research. It has led to improved understanding of the role played by reputation in a number of practical domains and scientific fields. In the study of cooperation and social dilemmas, for instance, the role of reputation as a partner selection mechanism started to be appreciated in the early 1980s.Takács, K. (2022). "A Reputation-Centered Theory of Human Cooperation and Social Organization." *Sociologica*, 16(2), 11–51. [https://doi.org/10.6092/issn.1971-8853/14196 doi:10.6092/issn.1971-8853/14196]

Working toward such a definition, reputation can be viewed as a socially transmitted meta-belief (i.e., belief about belief) that is a property of an agent, that results from the attitudes other actors have about some socially desirable behaviour, be it cooperation, reciprocity, or norm-compliance. Reputation plays a crucial role in the evolution of these behaviours: reputation transmission allows socially desirable behaviour to spread. Rather than concentrating on the property only, the cognitive model of reputation accounts not only for reputation-formation but also for the propagation of reputation.

To model this aspect, it is necessary to specify and develop a more refined classification of reputation. In informal settings, gossip, although vague, may contain precious hints both to facts ("I've been told this physician has shown questionable behavior") and to conflicts taking place at the information level (if a candidate for a role spreads defamatory information about another candidate, whom should you trust?).

Moreover, the expression "it is said that John Smith is a cheater" is intrinsically a reputation spreading act, because on one hand it refers to a (possibly false) common opinion, and on the other the very act of saying "it is said" is self-assessing, since it provides at least one factual occasion when that something is said, because the person who says so (the gossiper), while appearing to spread the saying a bit further, may actually be in the phase of initiating it.

Gossip can also be used as an identifier only – as when gossiping about unreachable icons, like royalty or showbiz celebrities – useful only to show the gossiper belongs to the group of the informed ones. While most cases seem to share the characteristic of being primarily used to predict future behavior, they can have, for example, manipulative sub-goals, even more important than the forecast.

In the case of a communication between two parties, one (the advisee) that is requesting advice about the potential for danger in a financial transaction with another party (the potential partner, target), and the other (the adviser, evaluator) that is giving advice. Roughly speaking, the advice could fall under one of the following three categories :

1. the adviser declares it believes the potential partner is (is not) good for the transaction in object;
2. the adviser declares it believes another (named or otherwise defined) agent or set of agents believes the potential partner is (is not) good for the transaction in object;
3. the adviser declares it believes in an undefined set of agents, hence there is a belief the potential partner is (is not) good for the transaction in object.

Note the care to maintain the possible levels of truth (the adviser declares – but could be lying – it believes – but could be wrong – etc..). The cases are listed, as it is evident, in decreasing order of responsibility. While one could feel most actual examples fall under the first case, the other two are not unnecessarily complicated nor actually infrequent. Indeed, most of the common gossip falls under the third category, and, except for electronic interaction, this is the most frequent form of referral. All examples concern the evaluation of a given object (target), a social agent (which may be either individual or supra-individual, and in the latter case, either a group or a collective), held by another social agent, the evaluator.

The examples above can be turned into more precise definitions using the concept of social evaluation. At this point, we can propose to coin a new lexical item, image, whose character should be immediately evident and is clearly linked to reputation.

Image is a global or averaged evaluation of a given target on the part of an agent. It consists of (a set of) social evaluations about the characteristics of the target. Image as an object of communication is what is exchanged in examples 1 and 2, above. In the second case, we call it third-party image. It may concern a subset of the target's characteristics, i.e., its willingness to comply with socially accepted norms and customs, or its skills (ways), or its definition as pertaining to a precise agent. Indeed, we can define special cases of image, including third-party image, the evaluation that an agent believes a third party has of the target, or even shared image, that is, an evaluation shared by a group. Not even this last is reputation, since it tries to define too precisely the mental status of the group.

Reputation, as distinct from image, is the process and the effect of transmitting a target image. We call reputation transmission a communication of an evaluation without the specification of the evaluator, if not for a group attribution, and only in the default sense discussed before. This covers the case of example 3 above. More precisely, reputation is a believed, social, meta-evaluation; it is built upon three distinct but interrelated objects :

1. a cognitive representation, or more precisely a believed evaluation – this could be somebody's image, but is enough that this consist of a communicated evaluation;
2. a population object, i.e., a propagating believed evaluation; and
3. an objective emergent property at the agent level, i.e., what the agent is believed to be.

In fact, reputation is a highly dynamic phenomenon in two distinct senses: it is subject to change, especially as an effect of corruption, errors, deception, etc.; and it emerges as an effect of a multi-level bidirectional process. Reputation is also how others know and perceive you as an individual.

While image only moves (when transmitted and accepted) from one individual cognition to another, the anonymous character of reputation makes it a more complex phenomenon. Reputation proceeds from the level of individual cognition (when is born, possibly as an image, but not always) to the level of social propagation (at this level, it not necessarily believed as from any specific agent) and from this level back to individual cognition again (when it is accepted).

Moreover, once it gets to the population level, reputation gives rise to a further property at the agent level. It is both what people think about targets and what targets are in the eyes of others. From the very moment an agent is targeted by the community, his or her life will change whether he or she wants it or not or believes it or not. Reputation has become the immaterial, more powerful equivalent of a scarlet letter sewed to one's clothes. It is more powerful because it may not even be perceived by the individual to whom it sticks, and consequently it is out of the individual's power to control and manipulate.

More simply speaking for those who want a working definition of reputation, reputation is the sum of impressions held by a company's stakeholders. In other words, reputation is in the "eyes of the beholder". It need not be just a company's reputation but could be the reputation of an individual, country, brand, political party, industry. But the key point in reputation is not what the leadership insists but what others perceive it to be. For a company, its reputation is how esteemed it is in the eyes of its employees, customers, investors, talent, prospective candidates, competitors, analysts, alumni, regulators and the list goes on.

{{tone|date=December 2011}}

{{See also|Reputation system|Reputation management|Online identity}}

Online reputation plays a crucial role in online communities where trust is a key factor. Platforms like eBay implement customer feedback systems to publicly rate users, while Amazon.com employs a similar review system to assess seller credibility.{{cite journal |last1=Ghose |first1=Anindya |last2=Ipeirotis |first2=Panagiotis G. |last3=Sundararajan |first3=Arun |title=The Dimensions of Reputation in Electronic Markets |journal=NYU Center for Digital Economy Research |date=February 2006 |ssrn=885568}} Additionally, establishing and maintaining a strong reputation serves as a significant motivator for individuals to actively engage in online communities.{{cite journal |last1=Hendrikx |first1=Ferry |last2=Bubendorfer |first2=Kris |last3=Chard |first3=Ryan |date=2015-01-01 |title=Reputation systems: A survey and taxonomy |url=https://www.sciencedirect.com/science/article/pii/S0743731514001464 |journal=Journal of Parallel and Distributed Computing |volume=75 |pages=184–197 |doi=10.1016/j.jpdc.2014.08.004 |issn=0743-7315 |url-access=subscription}}

Individuals employ monitoring to ensure that they keep up with their online reputation.{{cite web|title=Keep Track of your Reputation Online|date=21 January 2015|url=http://www.myreputationrepair.com.au/reputation-management/keep-track-reputation-online/|publisher=MyReputationRepair|access-date=22 January 2015}} Given the number of sites on the Internet, it is impossible to manually monitor the entire web for pages that may affect one's online reputation. Free tools such as Google Alerts can be used to keep track of online reputations on a small scale,{{cite web|url=http://www.searchmarketinggurus.com/search_marketing_gurus/2009/06/online-marketing-tips-video-online-reputation-management.html|archive-url=https://web.archive.org/web/20090606204126/http://www.searchmarketinggurus.com/search_marketing_gurus/2009/06/online-marketing-tips-video-online-reputation-management.html|url-status=dead|archive-date=6 June 2009|title=Online Marketing Tips Video: Online Reputation Management|last=Evans|first=Li|date=3 June 2009|publisher=Search Marketing Gurus|access-date=15 December 2012}} while larger businesses and clients may use more powerful analytics to monitor online interactions and mentions.

Paid tools for online reputation management focus on either brand protection or online reputation. These tools track mentions of a brand or product on the Internet, on Facebook, Twitter, blogs, and other social networking sites and websites.

Online reputation is determined by how effectively it is managed. The term digital reputation (or web reputation) is used to emphasize its broader scope, as it extends beyond online interactions to influence an individual’s or company’s overall public perception. It is important to distinguish online reputation from a company's digital identity, which refers specifically to its online presence and branding. Indeed, digital or web reputation does not concern the virtual online reputation only, but the whole real reputation of a person or a company as it is affected by the Internet. Online reputation, furthermore, should not be confused with a company's digital identity.{{cite journal |last1=Zloteanu |first1=Mircea |last2=Harvey |first2=Nigel |last3=Tuckett |first3=David |last4=Livan |first4=Giacomo |title=Digital Identity: The Effect of Trust and Reputation Information on User Judgment in the Sharing Economy |journal=PLOS ONE |volume=13 |issue=12 |page=e0209071 |date=December 2018 |editor=Jason Anthony Aimone |doi=10.1371/journal.pone.0209071 |doi-access=free |arxiv=1803.03029 |bibcode=2018PLoSO..1309071Z }}

An online reputation is the perception that one generates on the Internet based on their digital footprint. Digital footprints accumulate through all of the content shared, feedback provided, and information that is created online.{{cite web |url=https://www.forbes.com/sites/forbesagencycouncil/2018/05/07/why-your-digital-reputation-matters-and-how-to-influence-it/ |title=Why Your Digital Reputation Matters And How To Influence It |website=Forbes |date=May 7, 2018 |access-date=February 2, 2025}} Due to the fact that if someone has a bad online reputation, they can easily change their pseudonym, new accounts on sites such as eBay or Amazon are usually distrusted. If an individual or company wants to manage their online reputation, they will face many more difficulties.

According to one study, 84% of responding business leaders saw the greatest reputation threat online to companies as negative media coverage.{{citation needed|date=May 2013}} The next two greatest threats are customer complaints in the media or on grievance sites online (71%) and negative word of mouth (54%).{{citation needed|date=January 2015}} This negative word of mouth could come not only from dissatisfied customers but from employees as well. With the power of business review websites and customer forums, a company's online reputation can be damaged anonymously.{{cite web|title=Help My Business is Under Attack|url=http://www.reputationstation.co.uk/help-my-business-is-under-attack/|website=Reputation Station|access-date=15 April 2015}}

Employers have begun using the online reputations of job applicants to guide their hiring choices. By checking a candidate's social networking profiles on sites such as Facebook, Twitter, and MySpace, employers gain insight into a candidate's character and suitability for a job.{{cite web|url=http://www.reputation.com/how_to/how-your-online-social-network-could-cost-you-a-new-job/|archive-url=https://web.archive.org/web/20150924090120/http://www.reputation.com/how_to/how-your-online-social-network-could-cost-you-a-new-job/|url-status=dead|archive-date=2015-09-24|title=How Your Online Social Network Could Cost You a New Job|publisher=Reputation.com}}

Some individuals and organizations hire reputation management companies to attempt to hide truthful but unflattering information about themselves. A recent alleged example is that of Dr. Anil Potti, who resigned from Duke University after it was discovered that he had misrepresented himself on his resume and became the subject of a scientific misconduct investigation.{{cite web |url=http://www.dukechronicle.com/article/2011/04/potti-hires-online-reputation-manager |title=Potti hires online reputation manager |last=Doherty |first=Taylor |date=30 April 2018 |publisher=The Chronicle |access-date=15 December 2012}}

{{div col}}

• Digital identity
• Face (sociological concept)
• Governance
• Honour
• Id, ego and super-ego
• Reputation management
• {{section link|Signaling game|Reputation game}}
• Social capital
• Social map
• Social software
• Virtual community

{{div col end}}

{{Reflist}}

• Alsop, R (2004). The 18 Immutable Laws of Corporate Reputation: Creating, Protecting, and Repairing Your Most Valuable Asset, {{ISBN|978-0-7432-3670-6}}
• Barnett, M. et al. (2006). Corporate Reputation: The Definitional Landscape, in: Corporate Reputation Review, 1/2006
• {{Cite journal | last1 = Bourne | first1 = P. E. | last2 = Barbour | first2 = V. | doi = 10.1371/journal.pcbi.1002108 | title = Ten Simple Rules for Building and Maintaining a Scientific Reputation | journal = PLOS Computational Biology | volume = 7 | issue = 6 | pages = e1002108 | year = 2011 | pmid = 21738465| pmc =3127799 | bibcode = 2011PLSCB...7E2108B | doi-access = free }}
• Burkhardt, R. (2007). Reputation Management in Small and Medium-sized Enterprises, {{ISBN|978-3-8366-5825-6}}
• Fombrun, C. (1996). Reputation. Realizing Value from the Corporate Image, {{ISBN|978-0-87584-633-0}}
• Greco, M.; Branca, A. M.; Morena, G. (2010). An Experimental Study of the Reputation Mechanism in a Business Game, Simulation & Gaming, SAGE. [http://sag.sagepub.com/content/early/2010/07/27/1046878110376793.abstract Full text] {{Webarchive|url=https://web.archive.org/web/20110823113711/http://sag.sagepub.com/content/early/2010/07/27/1046878110376793.abstract |date=2011-08-23 }}.
• Jackson, K.T. (2004). Building Reputational Capital: Strategies for Integrity and Fair Play that Improve the Bottom Line, {{ISBN|0-19-516138-6}}
• Jazaieri, H., Logli Allison, M., Campos, B., Young, R. C., & Keltner, D. (2018). Content, structure, and dynamics of personal reputation: The role of trust and status potential within social networks. Group Processes & Intergroup Relations. [https://doi.org/10.1177/1368430218806056]
• {{cite book|author1=Klewes, Joachim |author2=Wreschniok, Robert |name-list-style=amp |year=2010|title=Reputation Capital: Building and Maintaining Trust in the 21st Century|publisher=Springer |isbn=978-3-642-01629-5}}
• McElreath, R. (2003). Reputation and the evolution of conflict. Journal of Theoretical Biology, 220(3):345–57. [https://web.archive.org/web/20070717022634/http://arbeit.ucdavis.edu/mcelreath/files/mcelreath%20JTB%202003.pdf Full text]
• Wilkinson, Shannon M. (2012). Online Reputation Management Frequently Asked Questions. [http://onlinereputationfaq.tumblr.com/ Online Reputation Frequently Asked Questions]

• [http://freehaven.net/~arma/jean.html Reputation by Roger Dingledine, Michael J Freedman, David Molnar, David Parkes, Paul Syverson]

{{Wiktionary|reputation}}

{{Wikiquote}}

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Category:Moral psychology

Category:Reputation management

Category:Social status

Category:Social psychology