Recently, operation fraud at Societe study is to explore the proposition that corporate social Generale. Web serve survey6 reveals that 68 per cent of responsibility reporting could be viewed as both an outcome respondents said that data breaches happen when employees of, and part of reputation risk management processes.
They take confidential data with them while leaving company. However, the Reputation Risk Measures in Mutual Fund Industry: organisations that apply universally high standards run the Jensen Model: The measure of portfolio performance risk of becoming bogged down by cost or debilitating rules.
If done properly, a well-executed Reputation Risk Treynor. Management exercise will have spin-off benefits that can, All three models are based on the assumption that 1 all by themselves, massively improve corporate performance investors are averse to risk, and are single period expected and profitability. Take the example of regarding investment opportunities, 3 all investors are able Wal-mart.
Over the last two years, Wal-mart has been the to choose among portfolios solely on the basis of expected subject of negative news coverage on topics ranging from returns and variance of returns, 4 all trans-actions costs and environmental and labor concerns to allegations that taxes are zero, and 5 all assets are infinitely divisible.
Wal-mart has negative net effect on local communities. Zyglidopoulos etal. Goldman Sachs model implies is crucial in determining the prices of risky GS , for example, through its GS Sustain strategy, is assets. Meanwhile, numerous pension funds in Europe the market in proportion to its fraction of the total value of all and the United States are starting to assess investment risk assets in the market.
Thus eq. Particularly under an return on any asset is equal to the risk free rate plus a risk premium given by the product of the systematic risk of the 5 Sowmya Kanthi Gosh, Measures of reputation risk, Dec 8th , asset and the risk premium on the market portfolio.
Y Taking an even closer look at the companies that appeared on the list in , and , there appeared to be a general regression toward the mean: Of the top 25 companies in , six had declined at least a full point by ; of the bottom 25, nine had improved at least a full point by This figure probably underestimates the instability of the reputation measure over those 10 years, given that many of the least successful companies dropped off the list altogether because they became too small to make the list or because they were acquired by stronger companies.
Regarding the categories social responsibility, corporate advertising and industry relations where the correlation between spending and reputation was actually negative, the explanation is unclear. It is possible, however, that those categories of expenditures could be more reactionary in nature in response to corporate problems or crises rather than proactive.
In other words, one theoretical explanation for the findings in Table 3 is that there may be a a strong correlation between reputation and proactive communication spending i. If so, the correlation between reputation and proactive types of communication expenditures may not be readily apparent because they may be offset by some other types of communication expenditures that correlate negatively with repu- tation analogous to a suppressor variable, in statistics.
The role of corporate communications One question in the study asked survey respondents to rank-order a set of eight phrases that described various philosophies of corporate communications, in terms of the overall role of the function within their organization.
Interestingly, companies with certain corporate communication philosophies were more likely to have strong reputations see Table 5.
Another question in the survey asked respondents, directly, what the most important role of corporate communication was in their organization. Certainly, different philosophies may be appropriate for different companies or different industries or different business environments. But if communication professionals cannot come to some sort of consensus about their fundamental role in big corporations, or an understanding of when various philosophies may be appropriate, it seems likely they will continue to have difficulties defining and explaining themselves to top managements and to people in other fields.
Questions and directions for future research In looking to the future, those who advocate reputation management as a guiding philosophy of corporate communications need to address some very hard questions raised by the current study and an analysis of the reputation management literature. If so, how much control do corporate communication departments have over reputation, relative to other cor- porate activities? The claim that public relations departments are in charge of reputation or perception management is even more suspect than it was 10 or 20 years ago, when heads of corporate public relations were much more likely to be in charge of a broader range of communication activities including things like government relations and investor relations.
Conversely, however, if an organization sincerely embraces reputation as a driving force for all of its activities, the head of public relations might elevate himself or herself into a key role of strategic planning and management as the overseer of organizational reputation. An example might be Unisys, which regards reputation as one of the three cornerstones of its corporate mission and culture.
How many other companies would be willing to grant such a role to reputation management and to public relations is debatable. The instability of the Fortune reputation ratings is of very serious concern, from the perspectives of both theory and practice, given that the ratings are probably the most widely cited and analyzed measure of reputation.
Conceptually, there are further problems with the way in which reputation has been defined and operationalized. Specifically, most reputation measures have been operationalized as a combinatory variable. Fortune, for example, defines reputation as the sum of eight individual measures relating to financial performance, product quality, and so forth.
That approach appears to be misguided, in terms of capturing the reality of reputations, which are generally global perceptions not the sum of several individual perceptions that may vary rather dramatically by individual and by stakeholder group.
Researchers could then attempt to identify the antecedents that correlate most strongly with reputation e. An even more appropriate research strategy would be to start with the bottom-line stakeholder behaviors of interest and work backwards, to determine what factors perhaps including reputation corre- late most strongly with those behaviors. Y Is reputation the most relevant concept, from a management perspective?
Is reputation management an enduring concept in the same way that relationships and brands are? In other words, a reputation is generally something an organization has with strangers, but a relationship is generally something an organization has with its friends and associates. Y How central is reputation to the larger issue of accomplishing organizational goals?
Is it the core concept or just a piece of a larger puzzle? Y Should public relations abandon relationships as its central tenet, in favor of reputa- tion, when marketing and other fields are focusing on relationships? It seems very odd, indeed, that public relations seems to be abandoning relationships as its central paradigm, at precisely the time that marketing is largely redefining itself in terms of relationship management.
Curiously, the foray into reputation management is not being led by public relations scholars or theorists, but by scholars from human resources and other fields who appear to know little about public relations and appear to have little respect for the field, but seem to be trying to reinvent public relations under the guise of reputation management. Indeed, Fombrun has essentially ignored or dismissed the body of public relations history and thought in his advocacy of reputation management.
Y In the final analysis, is reputation management really the most appropriate guiding philosophy for the field of public relations? Not a single major textbook in the field defines public relations as reputation management. Indeed, a number of prominent scholars and practitioners in the field have suggested that reputation is not something that can be managed directly, and therefore is not the most appropriate objective of public relations.
Some have argued strongly for alternative philos- ophies or roles for public relations, such as relationship management [21]. Yet reputation management was identified in the current study as the most common role for public relations in the big corporations responding to the survey. The disconnect is not easy to explain. Are public relations scholars simply so out of touch with the business world that they are years behind in their thinking, or are they being inappropriately ignored by practitioners?
Are many heads of corporate public relations simply becoming more enlightened in redefining their role within organizations, or are they latching onto a fad that is taking them down a primrose path? Or is there some altogether different explanation? Centrists believe it represents one role for public relations within organizations, more appropriate to some situations and some organizations than others.
If reputation management is the new face of corporate public relations, the implications for public relations research, education and practice are enormous. Under any scenario, the findings of the current study suggest a tremendous need for discussion, contemplation and debate, given the many conceptual problems with defining and measuring reputation, the disconnect between most public relations literature and the prevailing philosophies of many practitioners, and the wide range of current practitioner philosophies.
Hutton is an associate professor of marketing and communication at Fairleigh Dickinson University FDU and a former director of corporate and financial communications for three major multinational corporations. Michael B. Jill B. Alexander and Christina M. Genest were graduate assistants at FDU when the research was conducted. References [1] C. Fombrun, M. Reputation building and corporate strategy, Academy of Management Journal 33 2 — Davies, L.
Miles, Reputation management: theory versus practice, Corporate Reputation Review 2 1 16 — Ewen, PR! Gordon, Interpreting definitions of public relations: self-assessment and a symbolic interactionism-based alternative, Public Relations Review 1 23 57— 66; M.
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