Written By: Marjorie Munyonga

There is no single commonly accepted definition of the concept of corporate reputation but a number of academic sources as well as work by practitioners will be explored to give a better understanding of the concept.

According to Barnett et al., (2006), corporate reputation is an aggregate of evaluation of a firm by many stakeholders. This view is supported by Fombrun, (1996) who defines reputation as the sum of the images various constituencies have of an organization. 

A report commissioned by CIMA on corporate reputation also noted that reputation of an organization is the historic and cultural dimension of that image, the social memory of the stakeholders which acts as a platform for expectation.  Reputation management therefore has to do with the way in which stakeholders, who know little about an organization’s true intent, determine whether an organization is worthy of their trust (Stigler, 1962). Madhok (1995) also noted that trust is essential in a world in which business operates through cooperation and relationships.

Roper & Fill (2012) have developed building blocks of reputation management.

Building Blocks of Corporate Reputation Roper and Fill (2012)

What drivers corporate reputation?

Reputation Quotient

Organizations with sound Corporate Social Responsibility Policies and implement CSR in a structured and sustainable manner are likely to have a good corporate reputation. Organizations need to plough back into communities in which they operate and develop mutual beneficial relationships with the intention of building reputation and trust. 

A company’s reputation is also assessed through the way it emotionally connects with its stakeholders which results in it being admired, respected and trusted. An organization should have the power of inspiring belief and create a perception of trustworthiness in others through understanding the key stakeholders’ emotional filters. Consistency and reliability of product offerings and service delivery helps in creating an emotional connection between the organization and its customers.  Once there is an emotional connection, customers and stakeholders feel good about the organization, leading to trust and respect.

Organizations that adopt new innovations and technologies and possess core competencies that ensure the production of quality products and services are bound to have good corporate reputations. Customers build perceptions about an organization based on the quality of products and services. Where there is perceived poor quality, the reputation of the organization is bound to be tarnished. 

The organizational vision needs to be clear. Leadership should involve employees in strategy formulation and future direction. The leaders of organizations need to be to capitalize on market opportunities and put in place organizational structures that encourage the free flow of new and innovative ideas.

Employees are a key stakeholder of the organization and they play a critical role in corporate reputation. Organizations need to put in place formal internal communication systems to proactively communicate strategy and business decisions with its employees. There is also need for clear communication platforms that encourage free flow of information and idea generation and sharing. Employees need not to feel excluded from key decisions; otherwise this may lead to dissatisfaction and poor reputation of the company as an employer.

Organizations that perform well financially tend to build positive corporate images and reputations. A profitable company is perceived as being well managed and well run as opposed to those companies that make perennial loses.