The following is an excerpt from:
LEAD Magazine Volume 3 Issue 2
The following is an excerpt from:
LEAD Magazine Volume 3 Issue 2
What makes us view some companies favorably and others with disdain? While many reasons may exist, the apparent one is corporate reputation.This relatively new business discipline is receiving more and more attention recently as company executives realize the significance, but even more so, the necessity of managing their reputations. To further explore and study this business discipline, Drexel University's LeBow College of Business established a Center for Corporate Reputation Management.
"Our faculty members would say that corporate reputation is a phenomenon, and, as a company, you have one whether you want it or not," says Dr. Elliot Schreiber, director of the Center. "It really is people's perception of how you as a company stand against your competitors, so every organization is judged a certain way. Because we are a business school, the way we're looking at reputation is not whether a company or companies are liked or disliked, but whether they are differentiated in away that makes them more valuable.
Elliot Schreiber, Ph.D.
Executive Director
Trina Andras, Ph.D.
Chair
"Why companies want a reputation is that they want to attract some kind of reputation capital--[defined by] talent, money, customers or however--so that's why, from a business standpoint, this is really an interdisciplinary approach," he says.
While corporate reputation management as a business principle is relatively new in the United States, European business schools have been studying it for some time, according to Dr. Schreiber. He credits the new interest in the study, both in the academic and public sectors, to the ramifications corporate executives are experiencing due to Americans' meltdown of trust in corporations.
He offers this example: "A few years ago, AON performed a study and found out that the number one concern for CEOs, more than product tampering or something similar, was their corporate reputation. It is a great concern, because reputation is extremely difficult to manage. If you lead a huge company, chances are you're going to have a problem.So you need to know how you are going to deal with it. I liken it to fire prevention.You may have a fire, but if you are well prepared for the fire, and everyone knows how to put it out really quickly, then it's manageable. Otherwise, everyone goes crazy screaming 'fire.'"
According to Dr. Trina Andras, LeBow's marketing department head and chair of the Center's advisory council, the Center will focus on three basic components "First, we want to actively engage the global business community to identify best practices in reputation," she begins. "We also want our faculty and research fellows to produce applied research with regard to corporate reputation, and we want to address how reputation can promote business objectives."
Upon establishing the Center, one of the first responsibilities for Drs. Schreiber and Andras was creating an advisory council comprising both LeBow faculty and industry executives. This group participates by developing a related curriculum with relevant coursework, hosting events with panel and case discussions for students and the business community, and providing and supporting the overall direction of the Center.
“Corporate reputation is a phenomenon, and, as a company, you have one whether you want it or not. ”
"Our primary goal is to connect university research with the business community," Dr. Andras says, "and because Drexel is more about applied research, we think about research with regard to how the business community canuse it.We want to sponsor a number of forums to bring in CEOs to discuss the challenges of corporate management and faculty members to discuss academic research.
"We're also in the process of developing a curriculum with an opportunity for students to earn a certificate, and Dr. Schreiber has already developed two new courses--one at the undergraduate and the other at the graduate level--focused on corporate reputation management," she continues. "Our advisory council has already advised that, at the undergraduate level,we really should focus more on branding, and at the graduate level, the class should be taught more from a corporate reputation standpoint. Because MBAs are becoming more like general managers,we want to address what corporate reputation management means from a generalmanagement standpoint."
The Center focuses its study on a wide range of organizations, including for profit, nonprofit, and the public sector, as well as on cities, states, and nations. It also addresses how reputation enhances the business objectives of organizations, including their financial performance, attraction and retention of talent, and relationships with stakeholders. The Center employs a holistic approach, looking at reputation from the perspective of all disciplines and functions in the enterprise. Both Drs. Andras and Schreiber contend that there are many disciplinary components to corporate reputation, such as management, marketing, organizational strengths and weaknesses, and finance, among others.
"From an academic standpoint, it really is interdisciplinary,"Dr. Andras continues. "Marketing touches on it, sociology touches on it, even psychology. When you read journals on the subject, the expertise of the contributors covers a variety of academic disciplines."
"The largest component tends to be tactical," Dr. Schreiber explains. "Some people say corporate reputation is really corporate management or social responsibility, and people also tend to look at it as a competitive advantage. We look at it as both a marketing strategy and a management discipline. The way a business school should look at it is that if you're an executive of a company, what does this mean to you, and how are you managing it? You need to remember that every day that your employees leave your offices, they He offers have the reputation of the company in their hands."
“Every day that your employees leave your offices, they have the reputation of the company in their hands.”
More recently, corporate reputation has become even more complicated to manage because of globalization and technology, and specifically, the proliferation of social networking sites.
"The world is much more technologically linked," Dr. Andras explains. "In the past, if you had a bad experience with a company, you would probably tell a handful of friends or co-workers.Now, you can write about it, take a video with your phone, post it onYouTube orTwitter, and in minutes thousands of people know about it. It's viral. Company executives are actually attending conferences and hiring experts to learn how to deal with Twitter. It's that powerful."
Probably the greatest reason that corporate reputation matters, according to Dr. Schreiber, is that consumers continuously make business choices based on it. "As consumers, we decide what we will buy, and as potential employees, what companies we will join and be employed by," he says. "There has been a lot of research in that employees stay with companies they're proud of, and the best employees leave companies that they are not proud of. That is a measure of reputation. And, of course, investors choose where they will invest based on a company's reputation. It has very real business consequences."
