Importance of Reputation and the Role of Public Relations, The

Importance of Reputation and the Role of Public Relations, The

Gibson, Dirk

“Glass china and reputation are easily cracked, but never well mended,” Benjamin Franklin declared. Reputation represents organizational past and present performance and portrays the ability to deliver reliable desirable results to various stakeholders. Alternatively, reputation illustrates the perceptual track record of organizations. Reputation is a tremendously important personal and professional success requisite which signified the esteem with which something or someone is perceived by important publics.

Reputation is arguably the single most valued organizational asset. Consequently, a positive and linear relationship exists between reputation and organizational success. Positive reputations facilitate and expedite the business of successful organizations and conversely negative ones damage or destroy individuals and organizations. The Journal of Business Strategy observed that reputable names actually improve business during economic expansion and periods of prosperity while protecting companies during crisis. Proactive reputation management remains universally recognized, responsible and valuable preventive practice.

Reputation Defines Described

Professional reputation definitions might be considered. Stakeholder organizational perception is its reputation, according to one definition. Another declares that organization reputation constitutes collective images perceived by key stakeholders. Another definition maintains that reputation represents accumulated organizational intangible assets including employee dedication, degree of consumer confidence, brand loyalty, management trustworthiness and organizational public image. Reputation depicts evolving images resulting from the confluence of corporate self-definition and occasional redefinition, impression management, and effective relationship maintenance with important stakeholders, also called stakeholder engagement.

Corporate reputation signifies public evaluation of organizational activity. Reputation includes elements of trust, credibility, responsibility and accountability, concluded Sharon Beder. She added that reputation fundamentally concerns public perceptions regarding image, since most people outside of corporate management lack access to full information.

Reputation results from stakeholder and public examination of corporate actions. Consequently corporate reputation management is typically delegated to the CEO. Integrity, ethics, and deeds constitute personal or organizational attributes that typically elicit judgment, and these characteristics collectively comprise reputation.

Some scholars contend that reputation, unlike corporate image, is owned by the public. Reputation is not shaped through corporate advertisements. Positive reputations are created or destroyed through individual or organizational conduct. Reputation manifests perceptions of organizational actions by salient stakeholders.

Six “Dimensions of Corporate Reputation” were discovered by Harris Interactive, including emotional appeal, products and services, financial performance, social responsibility, workplace environment and vision and leadership. Nevertheless, reputation is sometimes considered difficult to explain because it is intangible. The central questions involved in understanding reputation are:

* Who are our stakeholders?

* What do they expect of us?

* Which of these expectations are unrealistic?

The distinction between image and reputation was clarified by Paul Argenti, a business professor at Dartmouth College, “Your image is how each constituency views your organization. Your reputation is the cumulative image” (Guiniven, 2004).

The Significance of Reputation

Virtually all authorities concur that reputation represents an exceptionally important organizational asset. Corporate communication and character constitute primary and necessary aspects of beneficial reputations. Positive organizational reputation stands among the corporation’s most valuable assets, while a negative version is a substantial liability and obstacle to organizational success. The International Association of Business Communicators noted that recent corporate scandals have diminished public confidence, elevating the importance of corporate reputation among CEO priorities.

The Korn/Ferry International “2003 Corporate Reputation Watch Survey,” prepared in conjunction with elite public relations firm Hill & Knowlton, noted that CEOs claim reputation to be more important than ever before. An environmental prism was used in Sharon Beder’s study of corporate reputation – she observed reputation management becoming another significant aspect of the traditional conduct of business. Similarly, in Great Britain the Turnbull Report concluded that reputation was as financially meaningful as any other capital asset in determining corporate net value.

The primacy of ethics in reputation perception was quantified in 2003 by the Hill & Knowlton annual corporate reputation survey. In response to the query, “What affects reputation?” the answer given nearly ninety per cent of the time was customer perceptions and ethical behavior.

Public interest watchdog organizations (state Public Interest Research Groups, for instance) target individual and organizational unethical behavior then communicate this information publicly. These groups provide public education concerning unethical organizational behavior and recommend companies to patronize and avoid. Responding to public interest organizations, corporate concerns about ethics and reputation are becoming increasingly commonplace throughout the business world.

Reputation Management

Reputation management involves creating and defending positive public perceptions. The mature contemporary reputation management industry includes a professional institute, academic journal and numerous competing commercial concerns. The underlying premise of reputation management, that reputation is created and/or altered through stakeholder engagement, has elicited repeated empirical corroboration.

The Reputation Institute, although not an educational institution, provides basic training sessions and advanced seminars for the acquisition and dissemination of reliable reputation management knowledge. It organizes periodic academic meetings and conferences, publishing Corporate Reputation Review (a quarterly refereed periodical examining reputation-related topics) since 1997.

Other professional associations have provided similar services. The International Association of Business Communicators conducted the “2006 Corporate Reputation Summit” in April of 2006. Later that same year The Conference Board produced the “Corporate Reputation and Communication Conference” in September, 2006.

One reputation management firm guaranteed its reputation management system, claiming it most effectively discerned emerging opportunities and developing threats while still amenable to influence. Another firm identified, categorized and quantified reputational comments to discern potential problems, and help clients interpret data and prepare contingency plans to avert specific threats to corporate reputation. Stephen Abbott of Abbott Public Relations concluded optimistically that significantly damaged reputations can be rehabilitated through carefully planned and effectively implemented reputation improvement programs.

Reputation management requires on-going, regular corporate functional status and not merely ad hoc, episodic, knee-jerk crisis responses. Reputation risk management succeeds only when operating holistically, not in the form of sporadic reactive procedures activated exclusively during emergencies but through ongoing influence upon corporate actions, behavior and public communication. Reputation management measures necessitate rehearsal and practice followed by plan refinement and revision prior to another rehearsal and revision cycle. According to Alice Dykeman, APR, a PRSA Fellow and proprietor of Dykeman Associates in Dallas, “Image is for celebrities, an external look that shows only the outer façade and doesn’t let people know the real you. Think in terms of reputation,” she asserted (Guiniven, 2004). Dykeman recommends a reputation audit for all organizations, followed by a second after a year.

Public Relations & Reputation

Internal and external communication policies determine positive and negative news distribution channels internally and to other organizations, the public and the media. Public relations professionals represent the organizational resource from which the media typically derives information resulting in ‘news.’ Given this opportunity, organizational public relations practitioners should find themselves uniquely positioned to assist in manufacturing or rehabilitating organizational reputation.

Positive ethical strategies and moral obligation are extremely important in molding perspectives through which people view organizations. Three primary considerations for effective reputation public relations include:

* Do not prevaricate. When conveying a message, honesty necessarily always receives emphasis. Even slight variations from the truth are considered false information, which ultimately destroys positive reputations.

* Practice loyalty, integrity and strong values. Without these components, truth and honesty will not characterize a reputation.

* Check sources. Emphasizing the importance of accuracy is vital to portraying reputation. False or otherwise incomplete information disseminated on behalf of an organization, even unintentionally, suggests dishonesty.

American and Western European public relations firms did not ignore the reputation aspect of their trade, or the potential clientele. Various public relations firms referred to and marketed their reputation management services differently. Opinion Research Corporation diagnostics measured reputation strength and developed ongoing reputation measurement infrastructure and systems. Morrissey & Co. developed The Reputation Audit, consisting of five questions:

* What are the key publics?

* How do you wish to be perceived by each public?

* How does each public view you now?

* Why is there a ‘reputation gap?’

* Can you plan a strategic blueprint to guide reputation restoration and rehabilitation?

The GfK NOP Corporate Reputation Scorecard substantially resembled The Communication Audit. The Scorecard provided four reputation enhancement services:

* Measured a corporation’s reputation vs. the competition

* Provided consistent comparative assessment of reputation with key constituencies

* Offered market-based guidance for reputation communication campaign planning

* Created benchmarks useful as pre-test data in the future.

References

Abbott, S. (2006). Image and reputation: What’s the difference?

Alsop, R. (2004). Corporate reputation: Anything but superficial – The deep but fragile nature of corporate reputation. Journal of Business Strategy 25.

Beder, S. (2002, Spring). Environmentalists help manage corporate reputations: Changing perceptions not behavior. Ecopolitics 4.

Copozzi, L. (2005). Corporate reputation: Our role in sustaining and building a valuable asset. Journal of Advertising Research 45.

Corporate Diagnostics. (2006). Reputation reputation.

h Accessed on October 26, 2006.

Guiniven, J. (2004, November). Building and preserving your company’s reputation. Public Relations Tactics.

Harris Interactive. (2006). Corporate reputation.

Accessed on October 26, 2006.

Korn/Ferry International. (2003, October 1-3). 2003 Corporate Reputation Watch Survey. Forbes CEO Forum.

Morrissey & Co. (1997-2003). Expertise: Reputation audit.

Accessed on October 26, 2006.

Opinion Reserach Corporation. (2004). Corporation reputation management.

Accessed on October 26, 2006.

Dirk C. Gibson, Ph.D. is an Associate Professor, Department of Communication and Journalism at the University of New Mexico. He has done extensive research in product recalls, Hispanic advertising, Japanese public relations, litagation public relations, public relations education, and public information. He is also a nationally renown researcher of serial murders. dirkcgib@unm.edu

Jerra Leigh Gonzales is a public relations student, and also majoring in Spanish, at The University of New Mexico. She is involved in many student organizations, including PRSSA, and A+ Public Relations. She works as the Marketing Coordinator for the College Enrichment Program at UNM and earned an award for Outstanding Service and Commitment from the program last year. She plans to pursue graduate school.

Jaclynn Castanon is a senior at The University of New Mexico majoring in Journalism and Mass Communication with an emphasis in Public Relations and English with a concentration in Liberal Arts. She is treasurer of PRSSA and an active staff member of A+ Public Relations, the UNM accredited student run PR firm. After graduation, Jaclynn plans to continue her education in graduate or law school.

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