The fact that businesses can have good or bad reputations is not a new con- cept, yet corporate reputation is still a relatively new concern among managers. Over the last five years, an increasing amount of research has been carried out on corporate reputation and this subject is attaining new status in business schools. Numerous books and journals have been dedicated to this and several major conferences on the subject now take place annually.
MEASURING CORPORATE REPUTATION
Contrary to popular belief, it is not only marketing people who attend these events. In fact, marketing people are now in the minority, outnumbered by senior professors from leading business schools, from the fields of finance, strategy and organisation behaviour. What has dawned on people is the realisation that there is a link between corporate reputation and shareholder value. No example has driven this point home as strongly as that of Marks & Spencer. For decades this brand seemed to have one of the best reputations in British business, yet now both its good name and share price are in the doldrums. British Airways provides a similar example. Reputations take a long time to build, but they can be wiped out very rapidly. Similar cases exist in the US; for example, Nike. Yet some com- panies take knocks to their reputation and bounce back, for example Microsoft and Shell. Perhaps these latter examples are protected due to a monopoly situ- ation or because their fortunes are very closely linked to scarce assets, such as oil, Whatever the case, there is now more of a need to explain how this link between reputation and shareholder value operates.