Corporate reputation is subject to many complex dynamics, with diverse stakeholder groups evaluating the organization from differing perspectives. Reputation management requires understanding and measuring these dynamics in order to direct PR, media relations, and other stakeholder-specific activities.
According to a study by Markus Renner, a visiting professor at Henley Business School “A ‘one-size-fits-all’ approach to measuring reputation does not make any sense.” - the right kind of information needs to be targeted towards relevant groups as positive engagement with stakeholders is a critical factor.
These three questions formed the basis for Renner’s study:
- How would you describe the impact of your organization’s reputation on overall business performance?
- Trust may play a big part in building that reputation, but how closely are trust and reputation linked to better earnings?
- To what degree does your corporate reputation drive the behaviours (recommending, purchasing, investing etc.) of your firm’s main stakeholder groups?
The study which has at its heart the development of a ‘reputation dimension’ causal analytic model that reflects the links between corporate reputation, stakeholder trust and future behaviours. It was conducted with 600 physicians and representatives of patient advocacy groups in key markets in order to identify the most influential reputational factors on the business performance of eight of the world’s highest-grossing pharmaceutical companies.
The study’s findings showed that the reputation dimension ‘Quality of Products and Services’ had a major influence on the trust and recommendation behaviour of both doctors and patient groups but that ‘Innovativeness’ was of major importance to doctors only, not patient groups. For the latter, the assessment of a pharmaceutical company as an ‘Attractive Employer’ was an important driver of recommendation. However, certain dimensions – ‘Management Quality’, ‘Ethical Business Practice’, ‘Social Responsibility’ and ‘Transparency’ – had little impact on either group. These latter dimensions would be likely to hold more interest for other stakeholder groups such as employees, investors, NGOs, health policy makers or regulatory authorities.
On the basis of these formative indicators, the model suggests that companies can identify specific business drivers relevant for the recommendation behaviours of stakeholder groups, and see why certain factors lead to one dimension being stronger than the other. For example, in the case of ‘quality of products and services’ the analysis shows that for doctors, the key drivers are drug safety, quality of product information, and continuous improvement of medicines. For patient groups, the drivers are ease of use of drugs, training on how to use them, and a good price/performance ratio.
According to the model, the reputation of any stakeholder group of any organization can be captured by a maximum of nine reputation dimensions, as set out below:
- Quality of Products and Services
- Business Performance
- Ethical Business Practice
- Marketing and Sales Effectiveness
- Management Quality
- Employer Attractiveness
- Social Responsibility
The weight that different stakeholder groups attach to each of the dimensions will obviously depend on their specific interests and expectations for the company. For example, Richard Branson’s reputation – which can be measured by the Management Quality dimension – is key to Virgin’s overall reputation, but one dimension is not enough to build reputation. Virgin’s reputation is also founded on other dimensions, not least its Quality of Products and Services or its Marketing and Sales Effectiveness.
Access the research papers:
Gute Reputation – gute Geschäfte. Markus Renner. Pharma Marketing Journal (April 2012).
Generating Trust via Corporate Reputation. The Influence of Pharmaceutical Companies’ Reputation on the Recommendation Behaviors of Physicians and Patient Organizations. Markus Renner. wvb Wissenschaftlicher Verlag Berlin (2011).