Main components of corporate reputation By Basil Mbuna

Main components of corporate reputation

A US study showed that there are ten main components of corporate reputation used in reputation measurement systems such as “the most admired companies in America”:

1. Ethical: the organization behaves ethically, is admirable, is worthy of respect, is trustworthy.
2. Employees/workplace: the organization has talented employees, treats its people well, is an appealing workplace.
3. Financial performance: the organization is financially strong, has a record of profitability, has growth prospects.
4. Leadership: the organization is a leader rather than a follower, is innovative.
5. Management: the organization is well managed, has high quality management, has a clear vision for the future.
6. Social responsibility: the organization recognizes social responsibilities, supports good causes.
7. Customer focus: the organization cares about customers, is strongly committed to customers.
8. Quality: the organization offers high quality products and services.
9. Reliability: the organization stands behind its products & services, provides consistent service.
10. Emotional appeal: (it is an organization I feel good about, is kind, is fun.

Additional components were found in some of the systems studied. These included value, differentiation, presence, and communication quality.  

How you can build your corporate reputation

Your organization can’t actually control its own reputation – it can only operate in a sound and ethical way, and work to communicate this to stakeholders. Thus the common term ‘reputation management’ is misleading because you can’t directly manage your own reputation; you can only act to strengthen your standing in the areas that you consider important to your reputation.

Stakeholders’ attitudes towards your organization and their relationships with you (and hence your reputation in their eyes) can be influenced by stakeholder relationship management activities, especially when the activities are conducted on a two-way symmetric basis, which involves treating them with respect.

Reputation is also affected by the actions and attitudes of others, for example, a competitor launching breakthrough products or making greater profits, and by comments from industry observers.

Steps to build reputation

Corporate reputation is shaped more by operational practices than by communication practices – actions speak louder than words. Nevertheless, a corporate reputation can be influenced by communication activities. Communication programs are valuable for creating awareness of good operational practices and in enhancing the organization’s relationships with stakeholders. Dialogue with stakeholders also can help shape organizational practices.

These six steps can strengthen a corporate reputation through a stakeholder relations program: 

• Conduct research to know key stakeholders better.
• Assess stakeholder strengths and weaknesses, and focus on the gap between internal realities and stakeholder perceptions.
• Research the main factors comprising the reputation of your organization and align them with policies, systems and programs in all functional areas. This produces a powerful re-orientation of priorities and behaviors.
• Set plans to exceed stakeholder expectations.
• Involve the CEO as the greatest ally or champion of a reputation program.
• Measure regularly against targets and act to improve the results.

Correlation between PR investment and reputation

US research relating to the annual Fortune 500 ‘Most Admired Companies’ listing in 1999 found that companies which invested in corporate communication experienced a better reputation than companies which didn’t.

The study analyzed spending in a broad array of corporate communication functions: media relations, speechwriting, investor relations, annual/quarterly reports, social responsibility and community affairs, donations, corporate and issues advertising, employee communication, department management and counseling and spending on public relations firms by 476 companies.

Spending on communication by the top 200 of the most admired companies far exceeded the spending by companies that were ranked in the bottom half of the table of most admired companies. This supports the view that reputation, as measured by the ‘most admired ranking’, can be influenced significantly by good communication practices.

By  

           Basil  Mbuna