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The following is an excerpt from a paper entitled “Reputation Management, Measurement and Monitoring.” It was written as part of the PR program at Ryerson University. If you would like to read the rest of it, you can find it here. Please feel free to comment and discuss below.

Reputation influences everything an organization does. It shapes and influences the perceptions and relationships of each interested stakeholder, and impacts every interaction as a result. Reputations are intangible, but they have a considerable effect on organizations and publics alike. Utilizing reputation management, public relations practitioners can shape and build positive reputations that are an immense benefit to their organizations. By guiding interactions with stakeholders and understanding the perceptions that surround these interactions, PR practitioners work to foster positive reputations and beneficial relationships for everyone involved.

Reputation

Reputation is one of the most important focuses in public relations. The potential impact of a reputation can cause exponential growth, or total ruin. In order to understand the importance of reputation, and be able to affect it, one must be able to define it. Definitions of reputation can vary among practitioners, but there are similar themes within each idea.

One straightforward definition posits that good performance plus effective communication equals a good reputation. In this framework, the opposite also holds true, poor performance or ineffective communication can lead to a negative reputation. This definition provides a solid foundation for considering reputation, but leans heavily on an organization’s performance. Reputation is impacted not only by performance, but by how that performance was achieved. Ethics and social responsibility must be considered. When adding this factor, reputation is often defined as behaviour plus performance, multiplied by communication. This definition includes everything an organization may do itself, but still lacks any external influence. It is a linear equation, and does not account for the stakeholders that collectively possess the reputation itself. To include this element, reputation can be defined as the intersection of how an organization behaves and stakeholder perception. Presumably, communication would be a part of that intersection, as would any connection between an organization and its stakeholders.

Truly, reputation is a combination of all these things, and more. Reputation is the sum of all conversations about an organization. Reputations are collectively shared. They are only created, held, and affected through interaction between interested stakeholders. Some of these stakeholders may be a part of the organization, some may not. Regardless, these interactions will still contribute to the overall whole. A reputation is a collection of all pervasive thought about an organization. It is amorphous and intangible, but its impact on an organization is substantial. The key to determining and evaluating an organization’s reputation is understanding the conversations about it.

The cyclical nature of reputation

At its core, reputation is a dialogue between an organization and its stakeholders. It is a cyclical process where each side of the dialogue has significant impact on the other. Reputation is more than just an intersection of stakeholder beliefs and an organization’s behaviour. It is an ongoing discourse between the two, with influence flowing to and from each side.

An example of this discourse can be seen in an organization’s performance. Performance is a key factor that contributes to reputation. A consistently strong fiscal performance will benefit a company’s reputation. It will influence stakeholders to believe that the company will continue to be successful. In a linear sense, this reputation of strong performance will attract potential investors, create customer loyalty, and will increase the company’s business success beyond what it would be without its reputation assets. However, as mentioned before, reputation is a sum of all conversations, not just those of performance. External factors will also influence a company’s reputation, which will then impact performance. For example, let’s say this company achieves its strong fiscal performance by mistreating its workers. Its interaction with those stakeholders will create a negative belief about the company. As that belief spreads, it too becomes part of the reputation. That reputation can influence consumers to boycott products, employees to leave the company, and stricter legislation to be enforced. Suddenly, the company’s performance decreases dramatically, as a result of a negative reputation.

Reputation is a multi-directional dialogue, permeable from all sides. It is a collection of beliefs, created by interactions. What stakeholders believe about an organization is of the highest value, because it will influence every interaction shared between the two. From transactions to job postings, legislation to an organization’s existence, reputation plays a role in all these things. Therefore, it is imperative for every organization to manage its reputation. As a sum of conversations, reputation is best managed by an organization through its interaction with stakeholders and by understanding the interactions that surround it.