Reputation Managment - Essay Example

?Topic:  Reputation Management Introduction Reputation is an extremely important aspect of any organization and without it no organization can survive in the market. A good reputation has both tangible and intangible benefits and it is crucial for customers, employers and the client’s .It is not an easy task to build a good reputation for an organization and to manage it is even more difficult. A good reputation is essential for an organization to sustain through difficult and unpredictable situations. A company with better reputation attracts more customers, better clients, worthy candidates for employment, gets free press coverage and attains other benefits which increase its profit share. Reputation increases the actual worth of the company and increases its market value , but most organization does not understand the real value of reputation. Companies need to measure, monitor and manage their reputation to be successful on a long term basis. Most organization does not take initiative to manage reputation because they consider it as an intangible asset. Like any other asset of the company, reputation has its liability side. So the reputation management implemented by a company has to evaluate both the reputation assets and the liabilities. According to Doorley (2007,pg.11)“The very act of having to list their reputational assets and liabilities helps the various units focus on reputation management”. It is extremely important for an organization to have a plan regarding the reputation management. A comprehensive reputation management plan is to be applied to all areas of an organization like finance, human resources, manufacturing, marketing, investor relations and public affairs. Definition of Reputation Reputation is the main identity of an organization on international business platform and to maintain it, a company need to have an ideal reputation management system. A reputation can be defined as the opinion or view of other’s about something. According to Chang(2006,pg.184)“Abdul Rahman and Hailes defined reputation as an expectation about an agent’s behavior based on information about or its past behavior” .Reputation is a context which changes according to the pass of time. Reputation helps us to simplify the complexities of social life and helps in finding trustworthy people. Reputation has a profound value in business world as it enables business partners and consumers to trust the company without concerns. Reputation allows the business partners and customers to carry on business with a company on moral and ethical grounds. Trust and reputation go hand in hand and a company with a good reputation in the business world is deemed to be honest, transparent and reliable in their business dealings. Reputation of a company shows to the outside world the credibility it has in the market and between customers and clients. A company’s reputation depends upon its past performance and the opinion its customer’s and customer’s has based on it. Reputation gives an idea to the outside world about the future behavior of an organization. Reputation is of contagious in nature and word of mouth can enhance or destroy goodwill of the firm. Reputation spread in the market like fire and hence a company should be cautious and calculative in maintaining its prestige and reputation. Development Stages of Corporate Reputation The corporate reputation has evolved through different stages which involves corporate image corporate identity and corporate reputation. The corporate image is the stage where consumer perceives the company through its brand, logo and uniform and theme of office building. Corporate image is not only in the hand of the company but is contributed by media and other external agents. Corporate image can be established by creating graphical theme to the products and also by providing apt products according to the customer needs. Corporate image is the initial stage of reputation development as the quality of product enhances the image of an organization. The second stage is the corporate identity where a company gives importance to the visual aspects of its identity. As per Temporal(2002)“Corporate identity is concerned with the visual aspects of a company's presence. When companies undertake corporate identity exercises, they are usually modernizing their visual image in terms of logo, design, and collaterals”. The Company attempts to change it logo and slogan to create a unique identity for itself in the business world. They change the design of their outlet, consumer’s idea of product quality and service and brand name to enhance their corporate identity. Finally, the stage of corporate reputation arrives where in a company moves forward to create goodwill for itself in the business world. Corporate reputation is the impression created in the minds of its external and internal stake holder, customers and client based upon its past performance. Corporate reputation increases the confidence level as well as the profitability of a company. Measuring Corporate Reputation : Corporate reputation is an intangible asset, which has a tangible effect on the business operation of an organization. It has the capability to reach every aspect of a business firm and destroy the shareholder value and profitability and goodwill of a firm. In his journal Kwamena(2003,pg.45-50)writes that “Reputation plays an important role in assuring product quality in markets where consumers can only imperfectly judge the product quality until after consumption “A company can measure or gauge its reputation as follows : 1) Emotional Value: A person likes a company just because it has an emotional attachment to it .He trusts the company for personal reasons and admires and respects its service and products no matter what. 2) Products and Services: The Company is liked by people for the quality of its products and services. People think that the products sold by the company are innovative, reliable and good value for the money. 3) Nature of Workplace: One believes that company is a great place to work for and has a sound and secure work environment. The company also has top graded employees which increase the credibility of the employees. 4) Social responsibility: One thinks the company is a morally and ethically obligated identity towards the society and nation. It supports social causes and considers protection of environment and has responsibility to people and local communities. 5) Leadership and Vision: One feels that a company has a strong panel of leadership who has the ability to take the company to prosperity. The company also possess an ideal vision which is transparent and for the betterment of society. 6) Financial status: The Company has a strong financial foundation and has a good future in monetary terms and is not a risky place to invest money Promotion of Reputation of an Organization The reputation of an organization is depended on the customer service and product quality they deliver. The experience of the customer is vital to the reputation of a company. Understanding the needs and demands of the customer is essential to build the goodwill of a firm. There are many factors which determine the reputation of a company and fluctuation in these can affect their credibility. According to Fombrun(2009) “In our work at Reputation Institute, we have found that stakeholders attach importance to seven key indicators of performance: product quality, innovation, financial results, citizenship, leadership, workplace and governance”. Consumers expect increased protection and transparency from the company they trust. However, product quality is of utmost importance to win the trust and confidence of the customers. In order to promote the reputation of an organization it is necessary to maintain a safe and secure work environment for the employees. The company should guarantee a product quality which is uncompromising to the customers in order to gain a good reputation in the market. The corporate organization has to reconsider their priorities and pay attention to the demands of the customers to promote their reputation. A company should also maintain their social corporate responsibility standards to ensure that the values and demands of the local communities and societies are met. The advertisement campaign of the company should also be strengthened to convey to the public about the features of their services and products. PPO Theory and Reputation PPO is a marketing organization which provides services to medical field and their unique feature is their marketing function.PPO helps a hospital in retaining the patients and helps in selling the hospital service in a better way to the clients. The hospitals should be careful while dealing with clients and try to be friendly with the patients in order to retain them. The hospitals should understand their competition and make marketing plans accordingly. In order to stay in competition an organization should be flexible and prove that they have the capability to compete on equal basis. The organization should understand their position in the market and what they need to enhance their position as a competitor. PPO helps in winning contracts for a health service provider and also increases the participation of physician in the medical service. Even networking with other PPOs is necessary to increase the business activity of a medical service provider. (Goldman) “The providers look to the PPO for marketing leadership. Even if your PPO has the dominant position within your market, you must still retain control over providers”. The main aim of the PPO is to increase the market share of the providers and increase their reputation in the market. It essential that while choosing providers, efficient and capable one need to be given preference than the named ones. Resource Based Theory According to resource based theory, the success and reputation of an organization is largely based on the resources it possess. The resource based theory is of the opinion that an organization’s resource determines its sustainability in a competitive market. According to Wang(1999)“The resource based theory suggests that firms resources are the main determinant of sustainable competitive advantage and thus firm performance”. The resources of an organization include its human resources, physical capital resources and organizational capital resources. And reputation is considered as most critical intangible asset of an organization and has the capability to increase the buyer expectation on a long run. Using a resource based theory to study the reputation of an organization is a viable method to assess the reputation value of a concern. Reputation is considered as an information process which takes place between public and corporate. In this theory reputation system is viewed from the cognitive system of human being as human mind is an information process system. Reputation is a long term memory registered in the mind of human being s and is established in the mind of people through word of mouth and advertisement. Reputation can be negative or positive and the corporate image is mostly controlled by the media. However the quality of the product offered by the organization is what really influence the reputation of an n organization. Reputation is the information logged in the memory of public and increase or decrease in reputation is related to advertisement, word of mouth and quality of a products. The idea of PPO PPO is the peak performance organization which aims at maximizing the sustainability of an organization on a long term basis considering the potentiality of its business. It is not possible for an organization to win all its customers and remain always top in the market .But an organization should consistently look forward winning and be the best in the market. Let us take an example of a sporting industry and how they can remain successful in a competitive environment. It is necessary to look for in each sport the successful team and concentrate on sports person who are famous on international platform and align the characteristic of the organization with them. From the sports team it can be analyzed that their passion to win is the main agenda for their success. The sports participant is enthusiastic and had a deep passion for the game and wanted to win at any cost. Every player was excited to win the game and had a good sense on the personal performance level. Everybody had an ethical standard and responsibility to play professionally and achieve success. A PPO in order to be successful need to have utmost flexibility and should be adapting themselves to the changing situations. Team play is also crucial to win a game as the right coordination and support from team members lead to the success of the team. As per Roberts(1998,pg.894-899) “Team play was seen as of the essence; genuine team play where sacrificial plays (on and off the ball, on and off the field/arena) and making space for others are the accepted norm’. Public Relation and Reputation Management The companies all over the world contribute much time, effort and money on promoting their product and company. Public relation is important because it enhances the communication process between the company and its customers and clients. A company has a target audience and in order to appeal to them, they need to formulate a proper public relation agenda. Since the technology has reached new heights customer are capable of commenting negatively about products and companies with less effort in web articles and forums. Public relation and reputation management is intricately connected even though their functions are different in nature. Public relation is more concerned with the area of public affairs, media relations, crisis management, and branding and event management. Reputation management is holistic in nature and is related to all employees of an organization. Public relation mainly focuses on media and attempts to communicate with stakeholders and to present the best image of company to outside world. Since public relation is a communication link between company and public, it should aim at delivering a best image of the company and its product to the outside world. A poor public relation practice can affect the company in a negative manner and bring financial loss and bad reputation to a firm. In his book Butterick(2011,pg54) states that“It is the function of the PR practitioners to try and control comment and opinion about a company/organization, responding when negative comments appear”. The public relation of any company should be honest to the public about their activities and mission in order to maintain their reputation in the market. Conclusion Reputation is an intangible asset which should be managed by a company like any other asset in a strategic manner. It is remarkable, but very less organization approach reputation in a comprehensive way. Many organizations do not understand the real worth of their company’s reputation. The corporate professional should understand the value of its reputation and methods to support, enhance and measure it. The ethical practice of communication has a tangible affect on reputation. For organization in order to build a solid and sustainable reputation must concentrate both on organizational performance and communication simultaneously. The organizational communication and performance should be proficient and ethical. A company can develop its reputation by building a good corporate image and identity. Companies need to make sure that they constantly measure, monitor and manage the reputation of their firm in order to remain competitive in the market. In his book Griffin(2008,pg.6)“It seems that companies are under attack and under the reputation spotlight more now that before”. S o a need of a comprehensive reputation management plan is more essential now. A reputation management plan should include internal and external audit plans, measure of reputational capital, potential challenges and problems in the unit of organization and organization message strategies. Reputation of a company is more important that it’s financial performance and customer and employee satisfaction. Bibliography Butterick, K, 2011. Introducing Public Relations: Theory and Practice. 1st ed. London: Sage publication Ltd Chang, E., 2006. Trust and reputation for service-oriented environments . 1st ed. West Sussex: John Wiley & Sons. Doorley, J., 2007. Reputation management: the key to successful public relations and corporate communication. 1st ed. New York: Taylor & Francis. Fombrun,C. 2009. How To Restore Your Company's Reputation. [ONLINE] Available at: http://www.forbes.com/2009/05/05/brand-reputation-company-leadership-restore.html. [Accessed 24 August 11]. Goldman pdf. From your instruction upload. I cannot download it so please make the citation yourself. Griffin, A., 2008. New strategies for reputation management: gaining control of issues, . 1st ed. London: Kogan Page Publishers Kwamena, K., 2003. A latent structure approach to measuring reputation.. Southern Economic Journal, 69/4, 45-50 Roberts, K., 1998. Peak Performing Organisations. Elsevier, 31/6, 894-899 Temporal,P. 2002. Corporate Identity, Brand Identity, and Brand Image . [ONLINE] Available at: http://www.brandingasia.com/columns/temporal10.htm. [Accessed 24 August 11]. Wang.S. 1999. Dynamic Modelling of Corporate Reputation Management Process. [ONLINE] Available at: www.systemdynamics.org/conferences/1999/PAPERS/PARA228.PDF [Accessed 24 August 11] Read More