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Table 17.3 Revenue (%) Less than $100 million 50 $100 million to less than $500 million 26 $500 million to less than $1 billion 6 More than $1 billion 9 Refused to divulge 9 Source: Hill and Knowlton/Harris Interactive (2001) • 21 per cent were regional CEOs or regional managers Of these respondents, 17 per cent of respondents were members of boards other than that of their own company; and 78 per cent were from private, as compared to public, companies. Revenue from these firms is reported in Table 17.3. The demographic criteria indicate that a widespread response was obtained from board-level personnel. Given the selfdirected nature of response, however, the study can be viewed as exploratory and as a prelude to more in-depth analyses. Research findings Given that the study has been carried out annually, the findings reveal that corporate reputation, its measurement and its management, is high on the agenda of leading companies and executive minds in many countries around the world. Corporate reputation is of significant importance to CEOs in achieving corporate objectives. More and more companies are developing and putting into place formal systems to measure corporate reputation. Table 17.4 indicates that while the importance of corporate reputation has apparently not changed in at least three years, its importance is highlighted by firms as they develop and implement formal reputation Table 17.4 Corporate reputation 1998 1999 2000 Importance of corporate reputation a 94 94 94 Implementation of formal reputation measurement systems (in place) 19 37 42 Source: Hill and Knowlton/Harris Interactive (2001) Note: a The importance of corporate reputation increases with firm turnover measurement systems. What seemed to be carried out on an ad hoc or unsystematic basis in 1998, was far more sophisticated in 2001. Corporate reputation was seen as of great importance relating to the achievement of business objectives in all countries (see Table 17.4). Thus, ‘marketing’ or ‘creating exchanges’ would just be one (albeit extremely important) element in developing and maintaining a sound corporate reputation. A second related element concerns the gathering of research data that monitors and measures corporate reputation on an ongoing basis. A major trend in the 1980s and 1990s was for businesses to augment marketing and latterly corporate communication departments with in-house analytical services (McDaniel and Gates, 1993; Van Riel, 1999). The current measurement devices used in terms of corporate reputation, however, can all be applied informally, rather than structured into business activity in a formalized manner. However ‘custom research’ is invariably ranked first in order of importance, but much greater analysis is needed on a case by case basis to discover what such custom research actually entails and the contribution such research makes. What influences corporate reputation the most The findings from the study indicate © 2004 Sandra Oliver for editorial matter and selection; individual chapters, the contributors
that customers, employees, and the CEO (in that order) are all most highly ranked in terms of maintaining corporate reputation. By nigh on unanimous vote, customers are by far the most important influence on corporate reputation (see Kitchen and Schultz, 2001a). However, this point is not unremarkable in that it has been hammered home in innumerable text books and articles derived from the marketing discipline. Customers are important for at least five marketing reasons as listed by Schultz and Walters (1997), but note however, that each of these terms also has resonance for corporate communication and reputation. 1 Buying rate: a base measure of loyalty which allows the firm share of market, mind and heart. 2 Customer retention, in total and by class: the percentage of customers retained in a specific accounting period. 3 Customer advocacy: increases in customer referrals as a percentage of total customers is also a key indicator of loyalty. 4 Price elasticity: where customers are willing to accept price increases with little or no effect on their behaviour, strong loyalty is presupposed. 5 Customer-switching costs and barriers to competitive entry: where a brand creates customer-switching costs, loyalty is more likely to be achieved. The greater the switching costs the more difficult it is for competitors to ‘pull’ customers away from the brand. The Schultz and Walters range of criteria, however, is supported by a range of measures from the corporate communication literature. For many firms, the brand is not just the product(s) customers learn about, consider, value, purchase, consume, and are loyal to. Customers increasingly want to know about the corporate entity that ostensibly owns the brands in terms of: • What does the parent company do • What doesn’t it do • What values does it personify • Which personalities are running the company • How do they treat employees globally • Are they ‘good’ corporative citizens The issue of how employees are treated can become important media news all round the world. As Nike has found to its cost, it is one thing to subcontract work to factories in Southeast Asia, and quite another to square sweatshop wages with premium prices in western markets. Bennis (1997) makes the claim that for corporate vision to be meaningful it has to be shared at all organizational levels. Sharing a vision implies a sense of belonging, support given to corporate goals and positive behaviour and word of mouth. Fombrun (1996) indicated that corporations that employees would like to work for promote trust, empower people and inspire pride. It is remarkable how few organizations are able to achieve these seemingly simple objectives. In a wider international context, corporate reputation plays an important role in terms of generating sales in new overseas markets. But, Dunning (1993) considers that reputation extends well beyond sales performance. From a multinational enterprise context he asks: • Is its impact on economic welfare a good thing • If it is (already) good, how can it be made even better (brackets added) • Do we wish our country to be tied to an international division of labour fashioned or influenced by foreign MNE activity © 2004 Sandra Oliver for editorial matter and selection; individual chapters, the contributors
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Table 17.3 Revenue (%)<br />
Less than $100 million 50<br />
$100 million to less than $500 million 26<br />
$500 million to less than $1 billion 6<br />
More than $1 billion 9<br />
Refused to divulge 9<br />
Source: Hill <strong>and</strong> Knowlton/Harris Interactive (2001)<br />
• 21 per cent were regional CEOs or<br />
regional managers<br />
Of these respondents, 17 per cent <strong>of</strong> respondents<br />
were members <strong>of</strong> boards other than<br />
that <strong>of</strong> their own company; <strong>and</strong> 78 per cent<br />
were from private, as compared to public,<br />
companies.<br />
Revenue from these firms is reported in<br />
Table 17.3. The demographic criteria indicate<br />
that a widespread response was obtained<br />
from board-level personnel. Given the selfdirected<br />
nature <strong>of</strong> response, however, the<br />
study can be viewed as exploratory <strong>and</strong> as a<br />
prelude to more in-depth analyses.<br />
Research findings<br />
Given that the study has been carried out<br />
annually, the findings reveal that corporate<br />
reputation, its measurement <strong>and</strong> its management,<br />
is high on the agenda <strong>of</strong> leading companies<br />
<strong>and</strong> executive minds in many countries<br />
around the world. <strong>Corporate</strong> reputation is <strong>of</strong><br />
significant importance to CEOs in achieving<br />
corporate objectives. More <strong>and</strong> more companies<br />
are developing <strong>and</strong> putting into place<br />
formal systems to measure corporate reputation.<br />
Table 17.4 indicates that while the<br />
importance <strong>of</strong> corporate reputation has<br />
apparently not changed in at least three years,<br />
its importance is highlighted by firms as they<br />
develop <strong>and</strong> implement formal reputation<br />
Table 17.4 <strong>Corporate</strong> reputation<br />
1998 1999 2000<br />
Importance <strong>of</strong> corporate<br />
reputation a 94 94 94<br />
Implementation <strong>of</strong> formal<br />
reputation measurement<br />
systems (in place) 19 37 42<br />
Source: Hill <strong>and</strong> Knowlton/Harris Interactive (2001)<br />
Note: a The importance <strong>of</strong> corporate reputation increases with firm<br />
turnover<br />
measurement systems. What seemed to be<br />
carried out on an ad hoc or unsystematic basis<br />
in 1998, was far more sophisticated in 2001.<br />
<strong>Corporate</strong> reputation was seen as <strong>of</strong> great<br />
importance relating to the achievement <strong>of</strong><br />
business objectives in all countries (see Table<br />
17.4). Thus, ‘marketing’ or ‘creating exchanges’<br />
would just be one (albeit extremely<br />
important) element in developing <strong>and</strong> maintaining<br />
a sound corporate reputation. A<br />
second related element concerns the gathering<br />
<strong>of</strong> research data that monitors <strong>and</strong> measures<br />
corporate reputation on an ongoing<br />
basis.<br />
A major trend in the 1980s <strong>and</strong> 1990s<br />
was for businesses to augment marketing<br />
<strong>and</strong> latterly corporate communication departments<br />
with in-house analytical services<br />
(McDaniel <strong>and</strong> Gates, 1993; Van Riel, 1999).<br />
The current measurement devices used in<br />
terms <strong>of</strong> corporate reputation, however, can<br />
all be applied informally, rather than structured<br />
into business activity in a formalized<br />
manner. However ‘custom research’ is invariably<br />
ranked first in order <strong>of</strong> importance, but<br />
much greater analysis is needed on a case by<br />
case basis to discover what such custom<br />
research actually entails <strong>and</strong> the contribution<br />
such research makes.<br />
What influences corporate reputation the<br />
most The findings from the study indicate<br />
© 2004 S<strong>and</strong>ra Oliver for editorial matter <strong>and</strong> selection;<br />
individual chapters, the contributors