Pekka Aula

Making and breaking sense: an inquiry into the reputation change

Purpose – The purpose of this paper is to expand knowledge of reputation change as a social process and to explore the implications of a social constructivist view of reputation for the challenge of reputation management.Design/methodology/approach – The authors analyze the main characteristics of a social constructivist view of reputation, and study its implications for the task of reputation management by means of an interpretative arena model of reputation change.Findings – The authors build a framework for analyzing reputation change as dialogical interaction between an organization and active stakeholders.Practical implications – The arena model is a tool for analyzing the task of corporate reputation change management across a variety of contexts. The arena model provides a conceptual tool for making sense of the crucial and intricate challenge of strategic reputation management, which places organizations engaging in struggles and collaborations with the stakeholders in symbolic environments.Origin...

Evidence-Based Reputation Management

Reputation management today must be based on evidence. Without evidence, a company is like a log drifting down the rocky rapids of reputation. If a company is not aware of its own reputation, it cannot manage it. However, the ability of the decision-maker to interpret and distill the information is equally important. This is because good information is heavily outweighed by poor quality information dressed up as research data. Indeed, in terms of management, this bogus information can be detrimental and lead a company in the wrong direction. Business leaders must be able to discern between valuable and worthless information, just as they do between good and bad argumentation, high-quality and low-quality journalism, and meaningful and meaningless communications.

The Reputable Firm

Communication and media are digitalized, and this is revolutionizing reputation management. Reputable firm has to be accountable for its decisions and the good cause, and to the stakeholders; it needs to live a good public life and have a clear shared and communicated corporate purpose and nurture cultural pluralism where organization culture is successfully extended outside the company’s physical and thus artificial boundaries. In addition, and as the fifth driver, we presented the dynamics of reputation risks. If a company can build and manage these drivers, a good reputation will be within reach. Reputation and reputation risk management should concern the C-suite. In some cases, reputation capital accounts for more than half of a company’s market value, so it would be quite absurd—and contrary to the interests of shareholders—if nothing were done to maximize reputation capital.

Towards an Accountable Firm

The digitalization of communication in terms of social media and networking services is adding an interesting twist to the discussion about corporate social responsibility (CSR). Social media, as well as other new forms of digital communication, is a powerful tool for stakeholders to monitor and debate and raise the sustainability issues to the wider debate. The digitalized media sphere has repressed firms under incessant public scrutiny. Indeed, to put it in a more extreme way, digitalized media and communication might indicate the end of corporate social responsibility as we know it. To be reputable, it is not enough to be environmentally enlightened, invest in corporate social responsibility projects, or be responsible for environmental effects and other sustainability issues. To turn the courses of more firms towards genuine sustainable trade, we need more accountable firms and business leaders.

The Power of Corporate Purpose

Since the financial crisis, many business leaders and organizational researchers have begun in earnest to ponder the question of “corporate purpose.” This re-evaluation of the raison d’etre of companies has culminated in the question of whether companies have any other purpose than to generate money for their owners. Although the debate is not new in management research and literature, it is certainly enjoying a renaissance. In fact, pondering the purpose of a company could be much more relevant in terms of its reputation and success than previously thought. When a company communicates its purpose well and systematically, it also helps the company to stand out from the competition while reducing reputation risks and ultimately creating better financial performance. If a company’s raison d’etre is clear in the minds of its stakeholders, it simultaneously legitimizes the company’s activities.

Risk of Risks

Reputation risk can be defined as a situation or series of events affecting a company that can either strengthen or weaken the company’s credibility and the trust of stakeholders in the company. The manifestation of reputation risk can cause direct business losses and weaken significantly a company’s legitimacy. Reputation risks typically involve considerable negative publicity. What is essential is that the creation of reputation risk is not dependent on the real state of affairs but rather on the views of stakeholders regarding the situation. In the era of digital communications, crisis management skills play a guiding role in navigating companies through a sea of reputation threats. Mistakes, accidents, and failures happen to all companies. It is not so important what caused the situation, but rather how the situation is resolved and how the acute crisis is managed.

Digital Revolution of Communication

Our communications landscape has changed significantly over the past two decades. What was once quite a local offline world is now global and online 24/7. This change also affects organizations, as their communications landscape is being redrawn each day. Although we can find technology-savvy firms that have successfully integrated the latest innovations with their communication mix and practices, never before have companies been so out of touch with their communications than now. Legacy media is being shaken up by digitalization, new web technologies, and online services that enable social media and the creation of social networks. As a result, the manner in which the reputation of companies is created, lost, and revived in the public environments has changed considerably.

Online News and Corporate Reputation A Neurophysiological Investigation

We examined emotional, motivational, and evaluative responses to positively and negatively valenced online news messages about companies with a good or bad corporate reputation; the valence of read ...

Communicating Connections: Social Networks and Innovation Diffusion

The role of social networks in promoting the diffusion of innovations is widely recognised, but networks are used more as a vague metaphor than an analytic concept. In this chapter, we study the possibilities that social network analysis (SNA) offers to promote the diffusion of innovations. In addition, we investigate the roles of opinion leaders and opinion brokers in the networks of innovation diffusion. We base our findings on a case study of a food industry organisation. We conclude with some remarks on how the study of innovation diffusion might benefit from adapting the methods of social network analysis.