Salvage Wire

Salvage Wire
Helping Automotive recyclers become leaders in their industry

Thursday, 11 November 2010


Reputation is the opinion (more technically, a social evaluation) of the public toward a person, a group of people, or an organization. It is an important factor in many fields, such as education, business, online communities or social status.
Reputation is 'the result of what you do, what you say, and what other people say about you'.
Put in simpler terms a working definition of reputation is: the sum of impressions held by a company's stakeholders.
In other words, reputation is in the "eyes of the beholder". For a company, its reputation is how esteemed it is in the eyes of its employees, customers, investors, talent, prospective candidates, competitors, analysts, regulators and the list goes on.
Firm reputation
Many businesses have public relations departments dedicated to managing their reputation. In addition, many public relations firms describe their expertise in terms of reputation management. The public relations industry is growing due to the demand for companies to build corporate credibility and hence reputation Incidents which damage a company's reputation for honesty or safety may cause serious damage to finances. For example, in 1999 Coca-Cola lost $60 million (by its own estimate) after schoolchildren reported suffering from symptoms like headaches, nausea and shivering after drinking its products.
Building reputation through stakeholder management
The stakeholder theory says corporations should be run for the benefit of all “stakeholders,” not just the shareholders. The stakeholders of a company can be suppliers, consumers, employees, shareholders, financial community, government, and media. Companies must properly manage the relationships between stakeholder groups and consider interest of each stakeholder group carefully. Good reputation enhances profitability because it attracts customers to products, and employees to its jobs. Company’s reputation is an asset and wealth that gives that company a competitive advantage because this kind of a company will be regarded as a reliable, credible, trustworthy and responsible for employees, customers, shareholders and financial markets. In addition, according to MORI’s survey of about 200 managers in the private sector, 99% responded the management of corporate reputation is very (83%) or fairly (16%) important. Reputation is a reflection of companies’ culture and identity. Also, it is the outcome of managers' efforts to prove their success and excellence. It is sustained through acting reliable, credible, trustworthy and responsible in the market. It can be sustained through consistent communication activities both internally and externally with key stakeholder groups.
CEO reputation
Research has shown the reputation of the CEO is inextricably linked to the reputation of the company. CEOs set the tone, define company direction, attract talent, and are the human face of the organization.
Online Reputation
Online reputation is a factor in any online community where trust is important. It affects a pseudonym rather than a person. Examples include eBay. One study found that a good reputation added 7.6% to the price received.
Another way to look at online reputation is how well its being managed. Nearly seven out of 10 global business executives see their reputations online as vulnerable.
An online reputation is the perception that one has on the Internet based on their digital footprint. This is why a merchant on the web having a physical shop (with real name, real address) is usually more trusted than an eBay member with a pseudonym.
Reputation Officers
Despite the rising interest in reputation, few companies have reputation officers. Although many companies will say company reputation is the job of the CEO, managing reputation is a daily function. Some would argue reputation-building and protection is the job of the CEO and not any direct report. Others would say that the CEO has too many responsibilities to focus on reputation.
Reputation Recovery
The convergence of globalization, instantaneous news and online citizen journalism magnifies any corporate wrongdoing or misstep. Barely a day goes by without some company facing new assaults on its reputation. Reputation recovery is the long and arduous path to rebuilding equity in a company's good name. Research by Weber Shandwick has found it takes approximately 3.5 years to fully recover reputation ([Safeguarding Reputation). James C. Collins of Good to Great fame says it takes a company seven years to go from good to great. The path is clearly long. The reason reputation recovery has risen in importance is that the "stumble rate" among companies has risen exponentially over the past five years. In fact, 79% of the world's most admired companies have lost their number one positions in industries in that time period. Companies which were once heralded as invincible, no longer are.

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