By unpacking the idea of a good or bad reputation into a profile of what the media says about their company, executives and public relations managers can understand and then influence their corporate reputation — and with it, their company’s real performance.
An important but often overlooked aspect of executive leadership is the creation of a good corporate reputation and the use of this asset to enhance organizational performance. There is accumulating evidence that a company’s reputation influences both its operational and financial performance.1 Because corporate reputations reside in the heads of people rather than as tangible assets, one of the key factors determining the various reputations of a company is the coverage it receives in the media.2 The power of the media comes from its reach and prominence, its role in certifying some companies as legitimate and important players in the market and people’s beliefs that it has superior access to information and expertise in evaluating companies. In this way, what the media says has a real impact on the business fortunes of companies.
Over time, media coverage defines what is important for people to believe about companies and what aspects of their character and performance should be used to evaluate them. These parameters form the basis of a company’s reputation presented by the media. However, the sheer volume of media information circulating about so many companies makes it difficult to summarize this coverage and present a meaningful profile of an organization’s media reputation. To help with this task, a corporate ratings industry has emerged that produces public scorecards of business performance. More than 50 different scorecards of corporate reputations are published in print media around the world.3 Many companies track the overall tone of their media coverage, but relatively few analyze the basis of the coverage to inform executives about the drivers of their company’s media reputation. More typically, executives simply accept the factors used in corporate scorecards as the key aspects of their reputation profile. The ratings agencies that compile scorecards also select a set of peer companies for evaluation. More often than not, these are a disparate collection of well-known companies rather than a set of industry competitors. Thus, it is not surprising that many executives consider scorecard rankings of corporate reputation to be little more than beauty contests.