Online Reputation Management for Corporations and Organizations
By Leslie Gaines-Ross and Andrew Tucker
Reputation is typically defined as how others regard an individual or institution. Here are some definitions that confirm this interpretation.
"Corporate reputation should be considered as much more than simply a brand emblem in the marketplace. Rather, it is a window to the fundamental character of a company and its leaders and as such is relevant to all stakeholder.” Professor Stephen Greyser, Harvard
"Brand is personality; reputation is character. Brand is something you build; reputation is something you earn. Brand is a promise; reputation is the result of keeping that promise." Paul Holmes, The Holmes Report
"Regard your good name as the richest jewel you can possibly be possessed of – for credit is like fire; when once you have kindled it you may easily preserve it, but if you once extinguish it, you will find it an arduous task to rekindle it again. The way to gain a good reputation is to endeavor to be what you desire to appear." Socrates
Why does reputation matter?
Academic research shows that a company’s reputation is a key intangible asset that helps companies attract resources, develop a sustainable competitive advantage, and drive long-term profitability. A strong reputation also allows companies to charge a premium price. Corporate reputation is what is perceived and believed by stakeholders about a company. Reputation is formed in the intersection between what a company says about itself and the perceptions of its actions by stakeholders. Much work has been done to understand this dynamic in the business literature (Fombrun and van Riel 2004; Dowling 2001; Tucker 2008) as well as the economic literature (Celentani et al. 1996; Fudenberg and Tirole 1991).
An individual’s reputation is also a valuable asset. It influences whether a customer will buy from you in an online marketplace like eBay or Amazon, whether other individuals will cooperate with you in a collective venture, and others will reciprocate your trust when political interests are at stake. In today’s global, knowledge-driven economy, a strong individual reputation is increasingly more important than overt power, financial resources or innovative products. Fully understanding the dynamics of an individual’s reputation in different contexts draws research from computer science (Jøsang, et al. 2005), evolutionary biology (Nowak and Sigmund 1998), sociology (Wasserman and Faust 1994), and political theory (Ostrom 1998).
Managing Your Reputation
As a discipline, reputation management is growing increasingly complex and constantly evolving.
Traditional reputation management required rapt attention to how a company was perceived by a narrow set of select audiences such as the business media and financial community. Years ago, even employees were not considered a major stakeholder that demanded direct and regular communications. In addition, many companies used corporate advertising in major media and trade publications to competitively position themselves in the marketplace. Public relations also helped to garner positive coverage in the media on a non-paid basis.
New reputation management borrows much from traditional offline reputation management but also requires relentless attention to the online world. Whereas companies once concentrated on discrete hard-to-reach audiences such as opinion-shapers and influentials, today’s reputation focus is increasingly multi-dimensional and can consist of one solitary blogger halfway across the world. Companies are now finding that they must attend to a diverse and all-powerful portfolio of stakeholders that now include online media, environmental groups, bloggers, Twitterers and citizen journalists that constantly command attention. Armed with little more than a computer and an opinion, some of these online word-of-mouth transmitters and receivers can undo a company’s reputation by disseminating misinformation and innuendo instantly. Thus, online reputation has become an important factor in reputation management today. Online Reputation Management (ORM) has come of age.
The Internet revolution is clearly a double-edged sword for companies. It presents opportunities as well as barriers to recovering lost reputation or boosting a languishing reputation. On the one hand, the Internet allows an unfavorable problem or issue to remain before the public interminably. On the other hand, the Internet enhances a company’s ability to rectify the very same problem or issue by transmitting its rebuttal just as widely, just as rapidly, and just as clearly. If harnessed properly, technology has the potential to effectively air company points of view and quickly counter negative perceptions. The Internet affords a company the opportunity to nip a problem in the bud before it explodes and prepare stakeholders before any damage is done.
With the click of a mouse, online consumers are now able to comparison shop, order goods and services and contact customer service. They can more easily develop online dialogues with brands and turn an unknown brand into a powerhouse by communicating their wants. As social media expands and captures the attention of citizens worldwide, personal reputations are more easily built but are also more vulnerable to reputation assassins.
Companies and consumers need to better understand how to successfully manage their reputations in a 24/7 marketplace. Leaders are increasingly eager to know about how they can build, enhance and defend corporate reputation when it is continually being scrutinized by online (and offline) communities. Consumers also need to manage their reputations more closely and understand that their privacy is less secure. In fact, online reputation management has grown in importance as more people only experience other individuals and companies through the Internet. That first impression online becomes your face.
Resources
www.wikipedia.org/wiki/Reputation
References
The Importance of Corporate Reputation
Alsop, Ronald J. (2004) The 18 Immutable Laws of Corporate Reputation. Creating, Protecting, and Repairing Your Most Valuable Asset. New York: Free Press Barnett, M. et al. (2006). ‘Corporate Reputation : The Definitional Landscape’, Corporate Reputation Review 9(1) : 26-39 Celentani, M.D., D. Fidenberg, D.K. Levine and W. Pesendorfer (1996) ‘Maintaining a reputation against a long-lived opponent’, Econometrica 64: 691-704. Davies, Gary (ed.) (2003) Corporate Reputation and Competitiveness. London: Routledge Fang, Lily. 2005. ‘Investment Bank Reputation and the Price and Quality of Underwriting Services’ Journal of Finance 60 (6), 2729–2761. Fombrun, C. and van Riel, C. (2004) Fame and Fortune: How Successful Companies Build Winning Reputations. London: Prentice Hall Fudenberg, D. and J. Tirole (1991) Game Theory. Cambridge, MA: MIT Press. Josang, A., R. Ismail and C. Boyd (2005) ‘A survey of trust and reputation systems for online service provision’, Decision Support Systems 43 (2): 618-644 Nowak, M.A. and K. Sigmund (1998) ‘Evolution of Indirect Reciprocity by Image Scoring’, Nature 393: 573-577. Ostrom, E. (1998) ‘A Behavioral Approach to the Rational Choice Theory of Collective Action’, American Political Science Review 92(1): 1-22. Wasserman, S. and K. Faust (1994) Social Network Analysis: Models and Applications. Cambridge University Press.
Image, Identity & Reputation
Balmer, J. and Greyser, S. (2003) Revealing the Corporation: Perspectives on Identity, Image, Reputation and Corporate Branding (London: Routledge). Dowling, Grahame (2001) Creating Corporate Reputations. Identity, Image and Performance. Oxford: Oxford University Press.
Measuring Reputation and Risk
Berens, G. and Riel, C. (2004) ‘Corporate Associations in the Academic Literature: Three Main Streams of Thought in the Reputation Measurement Literature’, Corporate Reputation Review, 7(2): 161-178. Bromley, D. (2002) ‘Comparing Corporate Reputations: League Tables, Quotients, Benchmarks or Case Studies?’ Corporate Reputation Review, 5(1): 35-50 Caruana, A and Chircop, S. (2000) ‘Measuring Corporate Reputation: A Case Example’, Corporate Reputation Review, 3(1): 43-57 Chun, R. (2005) ‘Corporate Reputation: Meaning and Measurement’, International Journal of Management Reviews 7(2): 91-109 Davies et al. (2003). Ch. 6 MacMillan, K. et al. (2005). ‘Reputation in Relationships: Measuring Experiences, Emotions, and Behaviours’, Corporate Reputation Review, 8(3): 214-232 Resnik, J.T. (2004). ‘Corporate Reputation: Managing corporate reputation – applying rigorous measures to a key asset’, Journal of Business Strategy, 25(6): 30-38
Reputation, Stakeholders and Corporate Social Responsibility
Mahon, J. and Wartick, S. (2003) ‘Dealing with Stakeholders: How Reputation, Credibility and Framing Influence the Game’, Corporate Reputation Review 6(1): 19-35
Managing Corporate Reputation
Landon, S., Smith, C. E. (1997) ‘The use of quality and reputation indicators by consumers: The case of Bordeaux wine’, Journal of Consumer Policy, Vol.20, No. 3: 289-324. Rao, H. (1994) ‘The social construction of reputation: Certification contests, legitimation, and the survival of organizations in the American automobile industry: 1912-1985’, Strategic Management Journal, Vol. 15: 29-44. Suchman, M. C. (1995) ‘Managing legitimacy: Strategic and institutional approaches’, The Academy of Management Review, Vol. 20, Iss. 3 Tucker, A. (2008) ‘Trade Associations as Industry Reputation Agents: A Model of Reputational Trust’ Business & Politics, Vol. 10 (1).
Designing Reputation Strategies
Dowling, G. (2006). ‘How Good Corporate Reputations Create Corporate Value’, Corporate Reputation Review 9(2): 134-143 Eberl, M. and Schwaiger, M. (2005) ‘Corporate Reputation: disentangling the effects on financial performance’, European Journal of Marketing 39(7/8): 838-854 Sabate, J. and Puente, E. (2003). ‘Empirical Analysis of the Relationship between Corporate Reputation and Financial Performance: A Survey of the Literature’, Corporate Reputation Review 6(2): 161-177 Arnold, J. et al (2003). ‘Corporate Images of the UK NHS: Implications for the Recruitment and Retention of Nursing and Allied Professional Staff,’ Corporate Reputation Review, 6(3): 223-238. Beljon, P (2001) ‘Managing Public Confidence or Repositioning Propaganda: Looking for Effective Governmental Communication Strategies’, Corporate Reputation Review 4(3): 267-274 Bennett, R. and Gabriel, H. (2003) ‘Image and Reputational Characteristics of UK Charitable Organisations: An Empirical Study’, Corporate Reputation Review 6(3): 276-289 Padanyi, P. and Gainer, B. (2003). ‘Peer Reputation in the Nonprofit Sector: Its Role in Nonprofit Sector Management’, Corporate Reputation Review 6(3): 252-265 Williams, R. et al. (2005) ‘The Impact of Corporate Strategy on a Firm’s Reputation’, Corporate Reputation Review 8(3): 187-197
Crisis Management
McLane, P. et al. (1999) ‘Potentially Devastating Events: How Three Companies Managed and Survived a Crisis’, Corporate Reputation Review, 2(3): 266-277. Patten, D. M. Nance, J. R. (1998) ‘Regulatory cost effects in a good news environment: The intra-industry reaction to the Alaskan oil spill’, Journal of Accounting and Public Policy, Vol. 17, No. 4. Zyglidopoulis, S. and Philipps, N. (1999). Responding to Reputation Crises: A Stakeholder Perspective’, Corporate Reputation Review 2(4): 333-350
Reputation Recovery
Gaines-Ross, Leslie (2008) Corporate Reputation: 12 Steps to Safeguarding and Recovering Reputation, New York: John Wiley & Sons.