A GOOD corporate reputation is vital for an organisation to perform well. In this present and highly competitive world of work, organisations that stand the test of time are those that are capable of building strong relations with their publics as well as sustaining them. There are many advantages attached to building strong corporate reputation, especially in this era where competition is stiff. Corporate reputation is one concept which is of growing importance for business management in this dynamic environment today. The reputation of the corporation is the most important ingredien in gaining a competitive advantage for most organisations and it’s an ongoing process.
By Emmanuel Zvada
Corporate reputation is a collective assessment of a company’s attractiveness to a specific group of stakeholders, relative to a reference group of companies with which the company competes. A company’s corporate reputation is the sum of all the views and beliefs held about the company, based on its history and its future prospects, in comparison to close competitors. In other words, it can also be referred to as how positively, or negatively, an organisation is perceived by its publics. Although reputation is an intangible concept, it increases corporate worth and provides sustained competitive advantage. A business can achieve its objectives more easily if it has a good reputation among its stakeholders, especially key stakeholders such as its largest customers and potential employees.
If your organisation is well regarded by your main customers, they will prefer to deal with you ahead of others. And these people will influence other potential customers by word of mouth. Suppliers will be more inclined to trust in your organisation’s ability to pay and to provide fair trading terms. If any problems occur in their trading relationship with you, your suppliers will be more inclined to give you the benefit of the doubt when you have a reputation for fair dealing. If an organisation has a good reputation in the marketplace, consumers may prefer that company even if there are similar businesses offering the same products or services for different prices. The reputation of an organisation enables a company to distinguish its product in highly competitive markets so as to patronise the business over another.
Likewise, government regulators will trust you more if you have a good reputation, and they will be less inclined to punish you if you trip up along the way. And clearly, a potential employee will be more likely to sign up with you if you have a good reputation for your treatment of staff compared with an employer who may have an equivocal reputation. In time of a crises, a good corporate reputation can shield the company from criticism and blame, and can help the company communicate its own point of view more easily to audiences that are willing to listen.
When an organisation wants to build its reputation, it is important to identify the organisation’s publics which are the community, employees, distributors, customers, suppliers, among others. The reason is that the strategies you will come up with, will affect your stakeholders as a company. Building anything has to come up from a foundation, therefore, even on reputation, the culture of the organisation is the basis on which the reputation should be built upon and it should be flexible enough to enable it to. Culture, which is how things are done, also helps in building the reputation of organisations. It encompasses the company’s vision, mission and ethics, among others. Managing culture properly is imperative since good reputation comes from an organisation with a good culture.
Corporate reputation is important to firms, because it can provide a variety of benefits, including reduced financing, advertising and supplier costs, as well as increased access to new strategic opportunities. The other way of building corporate reputation in identifying employees who interact daily with the external publics. The impression they make on the publics is another major image builder, in the same way staff such as the receptionist, messengers and sales persons have the greatest interaction with the outside world, hence the dressing of these employees also has a huge impact on the organisation’s publics, in return benefiting the company.
Taking care of those who take care of the publics (internal employees) is one way of ensuring that corporate reputation remains intact. If employees are managed well, they will also take care of prospective customers. Sustaining a good reputation is vital because attaining reputation today is not a guarantee of having it tomorrow; failure to sustain may also mean loss of customers. If an organisation starts building on its reputation, various indicators of success will start to show up, either through increased customers or profits. As a result the organisation will gain competitive advantage. One thing to be sure about is that an organisation will never reach a stage when it is satisfied by its corporate reputation, so they will find strategies to sustain it.
Since reputation is intangible, many companies find it difficult to manage their reputation. Also, reputation is hard to manage because it is how the company is perceived, based on past actions and treatment of other businesses. Even if a company is good at taking care of its existing customers, a business may not notice the possibility of more business if its reputation was managed well, so building and sustaining corporate reputation remains key in organisations.