Corporate reputation (CR) is a key element for the stakeholders to make important decisions. For example, the decision of of employees to work for a particular company, the selection of firms for investments by the investors, the customers' decisions to buy the products from, all depends on the reputation of a company. Therefore, it is essential for the firms to work towards the enhancement of CR and compete for higher reputational status.
Definition of CR:
From the past several decades, CR has been a mojor challenge for the organizations. Scholars and researchers are in agreement that people's perception about the companies plays a key role in the success or failure of an organization. Due to this importance, many researcher from diverse fields worked on this notion and defined the term from their own perspective. That is why, an agreement on single definition of CR is still at large and one may come across different definitions from different perspectives. Integrating all the commonalities from different definitions from all the perspectives (economics, strategic management or marketing etc.) Formbrun & van Riel (1997) proposed CR as "a collective representation of a firm's past actions and result that describes the firm's abilities to deliver multiple stakeholders" (pp 10). In a nutshell, it describes a firms' position as compared to the competition (both internally to the employees and externally to other stakeholders).
Benefits of CR:
As explained earlier that their are numerous benefits of CR. A high rate company in CR attract more customers, more talented employees and investors.Whereas, damage to CR of a business due to ethics violations or failure to be a socially responsible firm can substantially reduce the firm's ability to compete in the market and get successful. While estimating the difference corporate reputation makes in the value of an organization, Communication Consulting Worldwide suggests that "if Wal-Mart has reputation of Target, its stock value would increase by 4.9% which will increase their market value by $9.7 billion dollars. Similarly, if Coca-Cola had the reputation of Pepsi, their stock will would rise to 3.3% - an increase of $4 billion dollars" (Cravens & Plercy, 2015, pp. 118).
CSR and CR:
Keeping in view these numerous benefits, organizations need to take strategic decisions in order to enhance their CR. For achieving this aim, maintaining high standards of business ethics and CSR are important foundations which will enhance organization's relationships with its customers, employees and investors etc. Past studies on the this notion suggest that all the positive perceptions about the firm are often triggered by the perception of CR. Similarly, some studies suggest that both CR and CSR are linked with each other in a sense that enhanced social performance (CSR) will lead to enhancement in CR. This enhanced CR will further impact employees' commitment and reduce their turnover intentions. From customers' perspective, the study found that customer perceived value, customers satisfaction and customers loyalty will be enhanced. From the investors point of view, they further found that investors' loyalty and investor satisfaction will be enhanced. Similarly, from behavioral perspective the study found that customers' purchase intentions and investors investment intentions will be enhanced. Realizing the importance of social responsibility, many companies have adopted excellent CSR strategies some of which I explained in my earlier blogs (Click here for further examples).
Therefore, the role of CSR and business ethics important in enhancing the CR of a company. Realizing this fact, companies must adhere to genuine CSR practices and not just a white-wash or green-wash exercises. Some other studies found that CSR practices which are attributed to moral perspective will lead to positive outcomes whereas, those practices which are attributed to instrumental perspective will have negative reactions instead.
Source
Definition of CR:
From the past several decades, CR has been a mojor challenge for the organizations. Scholars and researchers are in agreement that people's perception about the companies plays a key role in the success or failure of an organization. Due to this importance, many researcher from diverse fields worked on this notion and defined the term from their own perspective. That is why, an agreement on single definition of CR is still at large and one may come across different definitions from different perspectives. Integrating all the commonalities from different definitions from all the perspectives (economics, strategic management or marketing etc.) Formbrun & van Riel (1997) proposed CR as "a collective representation of a firm's past actions and result that describes the firm's abilities to deliver multiple stakeholders" (pp 10). In a nutshell, it describes a firms' position as compared to the competition (both internally to the employees and externally to other stakeholders).
Benefits of CR:
As explained earlier that their are numerous benefits of CR. A high rate company in CR attract more customers, more talented employees and investors.Whereas, damage to CR of a business due to ethics violations or failure to be a socially responsible firm can substantially reduce the firm's ability to compete in the market and get successful. While estimating the difference corporate reputation makes in the value of an organization, Communication Consulting Worldwide suggests that "if Wal-Mart has reputation of Target, its stock value would increase by 4.9% which will increase their market value by $9.7 billion dollars. Similarly, if Coca-Cola had the reputation of Pepsi, their stock will would rise to 3.3% - an increase of $4 billion dollars" (Cravens & Plercy, 2015, pp. 118).
CSR and CR:
Keeping in view these numerous benefits, organizations need to take strategic decisions in order to enhance their CR. For achieving this aim, maintaining high standards of business ethics and CSR are important foundations which will enhance organization's relationships with its customers, employees and investors etc. Past studies on the this notion suggest that all the positive perceptions about the firm are often triggered by the perception of CR. Similarly, some studies suggest that both CR and CSR are linked with each other in a sense that enhanced social performance (CSR) will lead to enhancement in CR. This enhanced CR will further impact employees' commitment and reduce their turnover intentions. From customers' perspective, the study found that customer perceived value, customers satisfaction and customers loyalty will be enhanced. From the investors point of view, they further found that investors' loyalty and investor satisfaction will be enhanced. Similarly, from behavioral perspective the study found that customers' purchase intentions and investors investment intentions will be enhanced. Realizing the importance of social responsibility, many companies have adopted excellent CSR strategies some of which I explained in my earlier blogs (Click here for further examples).
Therefore, the role of CSR and business ethics important in enhancing the CR of a company. Realizing this fact, companies must adhere to genuine CSR practices and not just a white-wash or green-wash exercises. Some other studies found that CSR practices which are attributed to moral perspective will lead to positive outcomes whereas, those practices which are attributed to instrumental perspective will have negative reactions instead.
Source
