Corporate Reputation Pcr, Compulsory Question Working

Subject: Management Priorities
Pages: 8
Words: 3979
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Study level: PhD

Sports & Lifestyle


Corporate Reputation (CR) is a multidisciplinary rich, dynamic and complex to concept to have a unified definition and quantification. The subject of corporate reputation has attracted interest among marketing academics and practitioners for the last four decades (John, Balmer, Stephen, Greyser, 2006). However, despite the increasing number of studies published in this area, there is no unambiguous, generally accepted definition for the term “corporate reputation”. In addition, sometimes the concept of CR is seen as synonymous of corporate image (Dowling, 1993). What must be understood is that a company’s corporate reputation helps to enamor it to customers in that through its actions and methods of doing business with public and private entities, this in effect enables it to distinguish itself from its competitors. On the other hand various studies have explained that a corporate reputation can also be utilized to popularize a company among a particular consumer demographic in that through the uniqueness of the company’s reputation a consumer continues to remember the company and its brand long after the initial consumption of a product or use of a service from that company. As such, it is recommended for any company, newly established or not, to develop a corporate reputation that appeals to the market segment they are targeting so as to facilitate a greater market share for the company. Manto Alan and Wilson (2001) concluded that “a corporate reputation is a stakeholder’s overall evaluation of a company over time. This evaluation is based on the stakeholder’s direct experiences with the company, any other form of communication and symbolism that provides information about the firm’s actions and/or a comparison with the actions of other leading rivals”(p.29).

Models of Measuring Corporate Reputation

A review of existing models of corporate reputation reveals a relatively small number of widely used models, the most prominent of which seem to be variations of Fortune’s Most Admired Companies List (MAC), the Reputation Quotient (RQ) (Fombrun and Van Riel 2004, Fombrun 1996), the Corporate Personality Scale (Davies et al. 2003) and the Emotion, Feeling, Intention Model (SPIRIT, MacMillan et al. 2004).

Methodological Choice

In attempting to quantify reputation, the literature highlights the existence of different approaches: qualitative and quantitative. Qualitative models, mainly focused on assessing corporate reputation, they are used as preventive measurement tools to support the minimization of the causes of reputational risk namely, Reputation Quotient; Reputation Index; Fortune’s Most Admired Companies; RepTrack. Quantitative models utilized to measure the risk and effects of reputation losses, namely, Intellectual Capital approach, Accounting approach and Marketing approach.

Recently Paola (2011) proposed a third methodological contribution from statistical perspective. In the approach, a parametric statistical model whose estimation allows not only to describe and rank reputation, but also to predict and, therefore to prevent, reputational risks was proposed.

Models and Measurement Evaluation

The limits of quantitative models are due, above all, to the partiality and the lack of shared criteria for the determination of the reputational value that is “immaterial” for its nature (Trotta, A and Cavallaro, 2012). The reputational results achieved are limited to be representative only of the historical moment in which they are processed. These models differ considerably in terms of their underlying approach, who they survey and what they measure. Qualitative models are also subject to several criticisms, concerning: sample size, dimensions, methodologies, variables and stakeholders involved. They concentrated on some groups of stakeholders. The analysis seems to highlight that the multidimensional nature of reputation finds a better representation in the qualitative models because they are more focused on the relationships between the company and the key internal and external stakeholders. Therefore, Rep Track as a qualitative measurement tool will be suggested in the next sections.

Corporate Reputation Measurements

Corporate reputations are intangible assets that provide organizations with sustainable competitive advantage in the marketplace (Boyd, Bergh and Ketchen , 2010 ). Consequently, many studies attempts to validate measurements of CR (Caruana, 1997). While corporate reputation benefits are known and lauded, its measurement remains elusive. A numerous of applied measurement tools have been introduced that purport to measure corporate reputations (Ponzi, Fombrun and Gardberg , 2011).

The most familiar is probably Fortune’s popular study of the most admired companies released annually by the magazine since 1982. This measurement, which is based on ratings of companies obtained from invited managers and analysts, has been heavily criticized for lacking in methodological rigor and for demonstrating sample bias.

Many studied have proposed corporate reputation measures as well (see for example, Helm, 2005; Walsh and Beatty, 2007). For instance, Helm (2005) developed a ten-item corporate reputation scale in Germany. Her sample consisted of consumers, employees and investors evaluating an international consumer goods producer. Walsh and Beatty (2007) developed a 28-item customer-based reputation (CBR) measure.

Range of tools for measuring corporate Reputations

There are a number of designed measurement tools that assess corporate reputation within the organizations:

America’s Most Admired – Created in 1982 by Fortune Magazine, AMAC (America’s Most Admired Companies) is one of the most accessible and commonly utilized tool in benchmarking corporate reputations at the present (Fisher 2008, pp. 65-67). The primarily tool utilized in this particular method of evaluation consists of survey sent out to 10,000 executives, directors and analysts from which they rank various companies within their respective industries in terms of value, quality of products, HR practices, management practices, level of innovation etc (Fisher 2008, pp. 65-67). Unfortunately, due to issues involving answer bias, the fact that the questionnaires are geared more towards commercial performance rather than actual reputation and the fact that the scope of data is fairly narrow makes this particular corporate reputation measurement tool a seemingly ineffective method of true reputation evaluation (Fisher 2008, pp. 65-67).

Brand Power (Core Brand) – this particular method of corporate reputation analysis focuses primarily on the power, valuation and effectiveness of a particular brand within the consumer market that it is targeting (Batra, Ahuvia & Bagozzi 2012, pp. 1-16). It so by specifically tracking up to 1,200 companies within 47 industries and determining consumer reactions to certain types of brands such as their general level of familiarity with the brand and their level of favorability towards it when compared to other brands within the same product category (Batra, Ahuvia & Bagozzi 2012, pp. 1-16). The primary tools utilized in this particular case consist of survey data which measure percentile data related to familiarity and favorability, communications expenditure data which relates to advertising and lastly financial performance data which relates to the impact of the strength of a brand on a company’s share price (Batra, Ahuvia & Bagozzi 2012, pp. 1-16). Overall, this particular method of examination is an effective tool for examining large corporations given its use of factors related to familiarity and favorability, however, the methods utilized in evaluating the strength of a brand utilizing Brand Power are questionable given that they lack sufficient academic veracity in the methodology behind their evaluation process (Batra, Ahuvia & Bagozzi 2012, pp. 1-16).

Brand Asset Valuator (BAV) – Created by the marketing agency Young and Rubicam, this particular method of corporate reputation evaluation focuses on the use of various studies spread out over 51 countries entailing nearly 16 years worth of data encompassing 42,700 brands (Mizik & Jacobson 2008, pp. 15-32). It is one of the most comprehensive methods of corporate reputation evaluation out there based on the size and the veracity of its database alone (Mizik & Jacobson 2008, pp. 15-32). The main tool utilized by this particular method of evaluation comes in the form of the BAV model which utilized four key pillars composed of the following factors: energized differentiation, relevance, esteem and knowledge. Utilizing these four pillars, the BAV model attempts to determine the relevancy of a brand across various consumer markets and its relative level of strength when compared to other brands within the same competitive market (Mizik & Jacobson 2008, pp. 15-32). It should be noted though that there are several issues when utilizing this particular method of evaluation, the least of which is the general vagueness of the research model utilized and the fact that unlike the AMAC the data collected is limited only to clients of Young and Rubicam.

Brand Z – This corporate measurement tool claims to be the largest brand equity study in terms of the sheer amount of respondents it utilizes (based on current estimates by the company it is currently at 1 million) (Collins 2009, p. 140). Brand Z combines various aspects related to financial data, product data and finally consumer responses in order to create a factual “image” of a particular brand within the market that it operates in. It does so by utilizing its proprietary brand pyramid as a means of evaluating the correlated data (Collins 2009, p. 140). This pyramid consists of the concepts of bonding, advantage and performance at the very top while relevance and presence are situated at the bottom of the pyramid. By combining these elements, the company is able to determine the relative strength of a local brand and the rate of consumer patronage. It should be noted though that similar to the case of AMAC, this method of evaluation places a considerable degree of emphasis on financial and market performance rather than actual public perception regarding the reputation of the company. As such, it may not necessarily be the most ideal instrument in monitoring a company’s corporate reputation.

EquiTrend – This particular method of corporate reputation analysis is actually quite similar to that of Brand Z, Brand Power and the Brand Asset Valuator since that it utilizes consumer input to analyze up to a 1,000 brands in over 35 categories (EquiTrend Study Key 2004, p. 18). The main difference though between this particular method of analysis is that it focuses on what it terms as the “big picture perspective” which focuses on understanding a brand’s wide appeal among the general market population as well as compares its status with that of other brands within the same market (EquiTrend Study Key 2004, p. 18). The main elements of this particular type of analysis consists of the level of familiarity a population has with a brand, their perception of its quality, their likelihood of consumer patronage, their general expectations regarding the brand, how the brand distinguishes itself from others within the same market, the level of trust they have towards the brand as well as the general equity consumers associate with it (EquiTrend Study Key 2004, p. 18).

Reputation Quotient – Utilizing a method of examination that is distinct from the others mentioned so far, the reputation quotient analysis model utilizes a multi-faceted approach when it comes to analysis wherein it focuses on a wide range of criteria and stakeholders during analysis (Gardberg & Fombrun 2002, p. 303). In this particular case, the model implements a method of analysis that utilizes elements of social responsibility, workplace environment, products and services dimensions as well as consumer responses in order to determine the overall reputation of a company within the public eye (Gardberg & Fombrun 2002, p. 303). The advantage of the this particular method as compared to the others that have been mentioned so far is that it does not focus on financial and market performance, rather it focuses on the perception of the general public towards the company based on social factors (i.e. good relationships with employees, ethical business dealings, socially responsible etc.) As such, this makes it a far better method of evaluation as compared to the other tools of corporate reputation analysis that have been mentioned so far (Gardberg & Fombrun 2002, p. 303).

RepTrak – It is interesting to note that the RepTrak system is actually the successor to the RQ model. The main elements of the RepTrack system consist of corporate performance indicators encompassing 23 key performance indicators which are set under seven distinct dimensions, namely: products & Services, innovation, Workplace, Governance, Citizenship, Leadership, and Performance (Of good repute 2012, p.25).

Other Measurement Tools

Political Economy Measure – this particular method of measuring a company’s reputation was actually adopted from various surveys that originally dealt with the general attitude people perceived certain businesses had towards the government (Halle 2011, pp. 473-477). As such, this method of measurement focuses on aspects related to trust, interests and influence which were not present in the other measurement tools cited. In this case trust refers to the level by which the general public trusts a company’s input on issues of public policy (Halle 2011, pp. 473-477). Interests on the other hand refer to whether or not a company would pursue policy recommendations that would be good for the country as a whole than just for the company. Lastly, influence refers to a ranking system by which the general public evaluates the amount of influence a corporation should have on public policy issues given its track record (Halle 2011, pp. 473-477).

Limitation of Corporate Reputation Measurement tools

Fortune’s Most Admired Companies (AMAC) – the main problems associated with the AMAC measuring tool is the fact that there is a significant degree of stockholder bias when focusing on the financial aspect of the company, there is an insufficient level of examination related to social responsibility and there is a distinct lack of theory behind attributes utilized in the selection process (Fisher 2008, pp. 65-67). What you have to understand when it comes to the AMAC tool is that it inclined more towards financial performance than actually positive feedback from consumers (Fisher 2008, pp. 65-67). For example, while Apple has received numerous accolades as a reputable company, the fact that its workers in China are underpaid and in deplorable conditions casts a negative light on the company’s reputation which has distinctly impacted the views of consumers regarding the company (Fisher 2008, pp. 65-67).

Core Brand’s “Brand Power” – the main limitation associated with this particular measurement tool is the lack of empirical academic data to backup the results of the practice Batra, Ahuvia & Bagozzi 2012, pp. 1-16). As such, this makes the results questionable due to the overall lack of sufficient validity to justify the tracking results created by the tool Batra, Ahuvia & Bagozzi 2012, pp. 1-16).

Brand Asset Valuator “BAV” – While the BAV has proven itself to be an effective tool in examining customer ratings of well-known brands, the fact that its examination model is relatively unknown due to its proprietary nature and the fact that data can only be accessed by Y&R clients makes the results of this tool highly questionable given the lack of external examination and limited access (Mizik & Jacobson 2008, pp. 15-32).

Brand Z – The main problem with the Brand Z method of evaluation is that the “Brand Dynamic Pyramid” it utilizes is limited to aspects related to Bonding, Adventure, Performance, Relevance, and Presence (Collins 2009, p. 140). While such aspects are effective evaluators of the popularity of certain brands, the fact remains that it is still an incomplete method of examination since there are other aspects related to corporate reputation such as financial performance, customer service, treatment of staff, social responsibility and other such factors which the brand pyramid fails to take into consideration (Collins 2009, p. 140).

EquiTrend – an examination of Equitrend reveals that while it is indeed and excellent method of measurement when it comes to numerous brands throughout the world, the fact remains that it is an insufficient method of analysis when it comes to examining local brands especially those from small to medium scale enterprises (EquiTrend Study Key 2004, p. 18). As such, while it would be an effective method of analysis for large corporate brands, it is believed that it would not suit the current company being analyzed (EquiTrend Study Key 2004, p. 18).

Reputation Quotient – one examining the inherent limitations of the RQ system, it can be seen that the main disadvantages take the form of issues related to the overall validity of the attributes utilized for examination as well as whether the results sufficiently scale on an international level (Gardberg & Fombrun 2002, p. 303). These concerns are actually quite valid given that the assessment of a company locally may significantly differ from how it is viewed internationally as well as the fact that the various dimensions categorized may not properly reflect sufficient public opinions regarding a company’s reputation (Gardberg & Fombrun 2002, p. 303).

RepTrak System: aside from doubts regarding its international scalability due to its focus on individual consumer opinions, the RepTrak system seems to be a great method by which a company can evaluate current public perceptions regarding its reputation (Of good repute 2012, p.25).

Considerations in Choosing Tools of Measuring Corporate Reputation

When it comes to choosing a particular tool for measuring corporate reputation it is important to take the following into consideration:

  1. the impact of the company on local or international markets
  2. the proliferation of its products
  3. the market demographic it is targeting
  4. the overall size of the company itself

The reason such factors need to be taken into consideration is due to the fact that measurement tools such as AMAC, Brand Z, and Equitrend all focus on company’s with a significant level of operations within local and international markets. Relatively small to medium scale companies are normally not even listed nor taken into consideration and, as such, even attempting to utilize such tools would be a useless venture. It should also be noted that considerations into choosing the proper tool should also consist of what aspects related to measurement a company is attempting to measure (Cravens, Goad Oliver, & Ramamoorti 2003, p. 201). As seen in the case of the reputation quotient system and RepTrak each measures different aspects related to corporate reputation and, as such, the end result would vary. Before attempting any form of examination it is important for a company to determine what specific factors related to its reputation are needed to be examined and how this will be utilized in order to further improve the company’s reputation (Cravens, Goad Oliver, & Ramamoorti 2003, p. 201).

Reputation Audit

Conducting reputational audit is a vital step in order to diagnose the current corporate reputation situation at Matjar Alwatany. Reputation audit includes: Audit objective, Audit Purpose, Audit Scope, Selecting Measurement Tools, Implementing Measurement Tools, Diagnose Current Reputational Status, and Opportunities and Improvement.

Audit Objective

For the study at hand, the general objective is to evaluate the perceived reputation of the Matjar Alwatany corporate over the past year. Based on a recent examination, it has been determined that no such reputation audit or reputation measurement has been conducted or implemented since the company has been established.

Audit Purpose

To diagnose the existing corporate reputation practices for Matjar Alwatany

To assess how corporate reputation is viewed by Matjar Alwatany where giving the necessary strategic measures to build its corporate reputation.

To determine what measures need to be implemented by the company in order to improve its corporate reputation

Audit Scope

A total of four employees were selected and interviewed across the managers lines.The sample of the interviewee was broadly represent the senior level as few managers represent Matjar Alwatany ( see organization chart in company 2 page section)

Selecting Measurement Tools

RepTrak is the first measurement tool selected to measure the corporate reputation at Matjar Alwatany. By looking at its enhanced attributes and dimensions, RepTrak is th the best choice to measure Matjar Alwatany reputation due to the comprehensiveness of its system that will lead to reliable results and due to its ability to gain a better evaluation of the current reputation situation. Moreover, it can detect the most influential dimensions that drive Matjar Alwatany reputation and therefore reaching to pragmatic improvements.

The second measurement choice is ………………………………………………………………

Implementing Measurement Tools

Implementing RepTrak Measurement

After selecting the appropriate measures for the study at hand, questions were developed according to the RepTrak attributes grouped under seven dimensions(see appendix D). When developing the questions, there was a careful consideration about the nature of business at Matjar Alwatany that results in nine general questions. (See appendix E). A face to face interview method was selected due to the availability of few senior employees and the difficulties to use other methods such as questionnaire or focus groups as well as the fact that the researcher had insufficient connections to corporations with a large number of employees. Finally, the interview was conducted and the answers were analyzed in the next sections.


(Second measurement) ……………………

Overall Results chosen reputation measurement

RepTrak Results

In analyzing the interview, results shows that there are common views on specific areas which are related to few dimensions namely:

Focus on Quality

As evidenced by the results of the interview, one of the most important factors in creating and maintaining a successful company reputation is a focus on quality and ensuring that any product bought by a customer is not the result of inferior production or workmanship. What must be understood is that customers tend to patronize businesses that shows that they care about their customer by ensuring that the strictest measures are followed in product quality. The individuals interviewed stressed that in instances where a company has failed to live up to the expectations of consumers regarding the overall quality of a product, it is often seen that such companies tend to lose customers in droves due to the development of a negative reputation. Surprisingly, some of the individuals that were interviewed pointed to similar examples in various technology companies such as Dell that neglected to implement proper quality control measures on its motherboards resulting in several computers being sold whose motherboards leaked chemicals when overheated. Such a fiasco was a nightmare for Dell and ruined its reputation with several of its customers in effect sending them to other companies as a result. It is based on this that it can be seen through the interviews that a focus on quality is an important aspect for any company to follow in order to grow and maintain its reputation.

Adapting to Changes in Business Environments

Based on the interviews, another factor that businesses should take into consideration when it comes to their corporate reputation is adapting to changes within local business environments. What must be understood is that businesses do not operate within a vacuum and, as such, it becomes necessary to observe that it occurs within local business environments and responds accordingly. As stated by the interviewees, this can come in the form of expanding during times of economic prosperity or cutting back and outsourcing specific aspects of the company’s operations during lean economic times. Not only that, companies should be prepared to respond to changing consumer trends in order to stay relevant lest they fall into obscurity and stagnation. It was unanimous among those interviewed that ensuring that products continued to meet consumer needs, entering into new product markets and ensuring that product lineups change based on demand was a necessary factor in developing a corporate reputation of “relevancy”. Relevancy from their perspective means that a company continues to be a relevant place where people shop since it has the products they need. If a company does not focus on this, it is likely that it will develop a company reputation of irrelevancy and it would be likely that customers would not even visit the store. Such a situation occurred in the U.S. between Netflix and Blockbuster wherein Blockbuster continued to stick to its original business model despite changing consumer habits involving the internet. The result was that Blockbuster in effect lost its dominant market position to Netflix and has been plummeting in value ever since. It is based on this and the responses from the interviews that the necessity of observing and responding to change shows its importance for any company that wishes to stay relevant in its chosen market since relevancy is inherently connected to a company’s reputation.


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