Corporate Reputation: Early Warning System

Do corporations do enough to protect themselves from unexpected damage to their reputations?

Not according to Jeffrey T. Resnick, Executive Vice President and Managing Director of Opinion Research Corporation.

Resnick believes companies will be at risk until executives actively manage perceptions.  He warns that executive management needs to treat corporate reputation as the significant business risk it is, not just as a public relations campaign.

“A company’s reputation is the external manifestation of its people, internal practices, culture, management talent, and overall competitiveness,” says Resnick.

Writing in the Journal of Business Strategy, Resnick argues that companies need an “early warning system” that monitors reputation and provides the intelligence for managers to take corrective action.  They key is to identify and fix reputational weaknesses before they distract the company from its core mission. (Resnick, Jeffrey. "Managing Corporate Reputation: Applying Rigorous Measures to a Key Asset." Journal of Business Strategy 25(2004): 30-38.)

But few organizations have the tools and information base necessary to effectively manage their reputation, says Resnick.  The basic – and obvious – step is for companies to learn how their relevant publics perceive them.

He points to a multi-stakeholder measurement approach; what he calls the Stakeholder Reputation Matrix.  This matrix, much like the Linkage Model, helps identify company stakeholders.

Stakeholders’ opinions are critical in driving reputation, but perceptions of the company can vary among key constituencies.  The task is for a company to achieve positive alignment across all stakeholder groups, says Resnick.

According to Resnick, future CEOs will be judged not only on how they manage their business infrastructure, “but also the degrees to which they build and use corporate reputation as a competitive weapon.”

Resnick’s article is available by registering (free) with Opinion Research Corporation.

I plan to interview Resnick for an upcoming podcast, and I’ll have more details on when that show will be available later this week.

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Corporate Reputation:  Links and Resources

Corporate Reputation:  Events and Conferences

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