It is a fact that everyone has a reputation, this includes organisations, individuals and countries. It is also important to state that reputation of an organisation differs from stakeholder group to stakeholder group. Organisational reputation in the corporate world is also regarded as an intangible asset just like brand, knowledge, innovation, leadership and loyalty.These intangible assets have the potential to create value because they are difficult for competitors to duplicate, change or imitate.
With the advent of the advanced traditional media, internet, and social media, more and more organisations are under pressure and scrutiny to manage reputations with regards to achieving and preserving transparency, accountability as well as social and environmental responsiveness.
There are several ways in which reputations come into being.These include direct experiences of an organisation or direct observation of an organisation with regards to behavior of employees and experiences with certain services.There is also indirect experience of the organisation through hearsay or opinions about an organisation. Corporate messages and initiatives such as advertisements and sponsorships form part of how reputations come into being.
Some of the benefits associated with corporate reputation include high levels of trust among stakeholders, commitment, loyalty, satisfaction, perceptions of lower risk and positive word of mouth recommendations.The company can also have the luxury to charge a price premium for products and services and there will be higher entry barriers for potential competitors.The benefits also play out in the excess value investors are willing to pay for the companys shares.This implies the amount by which the market value exceeds the book value of its assets. History and research shows that organisations with a favourable reputation will receive the benefit of doubt from their stakeholders when they are faced with a sudden crisis.
Organisations also bear a huge responsibility in preserving and maintaining reputation. Research has proven that unless some crisis hits an organisation, its reputation tends to stick. However, despite the staying power of reputations, they can easily be harmed or even lost in the face of a crisis. Without being liked by clients and without having earned their admiration and trust, and without clients having a good feeling about an organisation and being proud of it, the possibility of a positive reputation score among clients is very slim. Managers responsible for an organisations reputation will thus have to ensure that an emotional link is established with clients and prospective ones.
This link is established through three different dimensions which are corporate performance, social engagement and good employer. Corporate performance is about the assessment of the financial soundness of the organisation and the regard in which its management is held. Social engagement is about whether the organisation is perceived to support good causes in the society. Good employer refers to the organisations ability to pay attention to the needs and well-being of its employees.
In a nutshell, this is what corporate reputation and management is all about.