INTRODUCTION
One of the issues that, due to its importance, stands out on the business management research agenda is, without a doubt, the determination of the origin and foundation of competitive advantages in organizations. Or put another way, what determines that there are differences in the profits obtained by some companies compared to others.
The progressive increasing complexity of the competitive context that organizations have to face today characterized by increasing globalization of markets, sectoral liberalization, the dynamism of new information and communication technologies, the shortening of the life cycles of products and services, the acceleration of business concentration processes, the flexibility and decentralization of management, and the recurrent business crises produced by the transgression of certain ethical principles, especially in large corporations in various parts of the world, have largely determined measure, that this line of research has assumed an even greater relevance than in previous periods.
This combination of transformations in the traditional patterns of competitiveness has given rise to the search for explanatory perspectives of the differences in profitability between companies, which throughout their development have been nourished by different approaches and the use of various methodologies that they have been forming a very extensive theoretical and empirical body. Currently, among the efforts to achieve a greater understanding of the essence of competitive advantage, two perspectives stand out: the Structural Theory and the Theory of Resources and Capacities.
From these points of view, various studies have revealed the special capacity that corporate reputation has for competitive success. However, as has happened previously with other processes of implementation of organizational innovations, the use and abuse of this term, previously little known, has led to cases of its trivialization as well as its application to organizational management. Also to the statements in the sense that such factor is exclusive to large corporations and only they are in a position to handle it. Reputation, or lack thereof, affects any organization regardless of its size, business name or type of ownership.
El creciente atractivo y preocupación de las empresas por la reputación corporativa deviene, entre otros aspectos, de la profundización en los hallazgos del valor de los intangibles como fuente de ventaja competitiva, del papel que en ello juegan las relaciones con los stakeholders o grupos de interés anteriormente no contemplados, las transformaciones en el contexto de los negocios y la acentuación de situaciones empresariales críticas.
Transformations in the environment such as the new legal and voluntary obligations for companies to disseminate information and interact with their stakeholders, the strictest public scrutiny on their operation, the social and ethical criteria that increasingly influence investment decisions of people and institutions, the growing concern about the deterioration of the environment caused by the activity of companies and made transparent more widely than in previous periods by the media and modern information and communication technologies.
Likewise, the consolidation of new agents to control the operation of firms such as civil society organizations and the media, the performance of transnational companies in regulated settings and expansion of their operations in emerging markets where the laws are lax or simply do not exist, the higher expectations of society regarding its participation in solving problems of health, education, housing and social equity; technological innovations that raise complex ethical questions and dilemmas in their application.
Regarding critical business situations, there are those generated, in an outstanding way, by large corporations, especially outside their countries of origin, such as the destruction of the environment and indigenous cultures, industrial accidents of significant proportions, implementation of Inhumane working conditions, employment of child labor and forced labor, creation and operation of clandestine workshops, use of harmful substances in the production of their products, commercialization of goods that, due to their characteristics, are prohibited from being sold in the places of origin of the bidders, support for pressure groups that undermine local political and economic stability in the face of threats of affecting their privileges.
Likewise, the recurring bribery and financial scandals of significant consequences that have negatively affected the economies of both developed and underdeveloped countries, their financial markets and the employees of the companies involved.
DELIMITATION OF THE CONCEPT REPUTATION
The term reputation is a notion that assumes different nuances for different authors and fields of knowledge. Therefore its conceptualization raises at least three problems. The first related to the very substance of the term: what is reputation. Secondly, with regard to its limits, which implies, among other aspects, differentiating it from the notions of image and identity. Finally, regarding a functional question: how to manage reputation.
In a first approach to the term, and from the general point of view, the Royal Spanish Academy defines the concept of reputation with two meanings: as the "opinion or consideration in which someone or something is held" and the "prestige or esteem in that they are had someone or something ”.
Regarding the concept of corporate reputation, Ferruz (2017) defines it as the “intangible resource of the company that is materialized in its behavior and that requires a certain time for its configuration, which is recognized by its public as a generator of value insofar as it adjusts to what they consider to be worthy of it ”. For his part, San Segundo (2012) considers that the “reputation of a company is the recognition that the different stakeholders of a company make of their corporate behavior, based on the fulfillment of their commitments and the satisfaction of their expectations”.
From the above definitions, it can be inferred that, like people, companies have a certain reputation formed in the long term by the perceptions of stakeholders or interest groups about it. By way of conclusion, it can be said that corporate reputation is the set of perceptions of an eminently intangible nature that stakeholders or interest groups have about a given company in relation to the degree of compliance with the commitments assumed with them. The foregoing refers to both the internal groups of the company and the external groups and perceptions that are a result of their behavior over time and of the harmony achieved between the corporate image and identity.
Image, identity and corporate reputation
The corporate image, understood as the mental structure that the public forms of the organization as a result of the processing of all the information disseminated by the organization (Costa, 2010), can be considered as a notion close to corporate reputation since when a The company maintains a positive image before its public for a long period, such image leads to a better reputation. However, there are also differences between these terms, such as the lasting effects of reputation in the face of the conjunctural nature and ephemeral incidence of the image; reputation is the result of corporate behavior and the image is created by marketing and communication experts using relationships,advertising campaigns and other promotional means to suggest an attractive mental picture that generates public interest in the company and its commercial offer.
Likewise, the image is built outside the organization while the reputation is forged within it; the image projects the corporate personality and the reputation is a result of the recognition of the behavior; the image generates expectations associated with the offer and reputation is the value derived from this result.
Unlike reputation and corporate image, corporate identity is made up of the coordinated set of visual signs by means of which public opinion instantly recognizes and memorizes an organization as an institution. Identity is therefore the intrinsic sum of being and its form, self-expressed in the set of particular features that differentiate a company from all others. The signs of corporate identity are of a different nature:
- Linguistics. The company name is an element of verbal designation that the designer converts into a different spelling, a unique way of writing called a logo. Iconic. It refers to the graphic brand or figurative distinctive of the company. The brand crystallizes a symbol, a conventional sign that carries meaning. Chromatic. It consists of the color or colors that the company adopts as an emblematic distinctive.
It is precisely the systematic use of corporate identity signs, their repetition that achieves the effect of constancy in the memory of the market, a greater presence that increases the notoriety of the company in the public mind. Thus, due to accumulation and sedimentation in people's memory, identity surpasses its immediate function and becomes an intangible creator of value (Costa, 2010).
Based on the foregoing, it can be stated that the concepts of corporate identity and image are interdependent; there is no image without identity, since what is communicated is necessarily anchored in reality; and at the same time, there is no possible representation of identity if it is not through the image that constitutes its best expression.
REPUTATION AS A SOURCE OF VALUE
One of the most outstanding purposes of corporate reputation management as a source of value is to contribute to the achievement and maintenance of a superior competitive position that allows improving the financial performance of the company. The foregoing in a framework in which the concerns and interests of its stakeholders are taken into account, collaboration links are established in solving problems and depending on the availability of resources, the company tries to respond to the demands it deems as most significant.
Their contribution to the creation of value is associated with issues such as their contributions to greater customer acquisition and loyalty that leads to increased sales, increased potential to attract new investors, attract and retain qualified personnel, facilitate the making of alliances or joint ventures with other companies due to the attractiveness that the possession of a recognized reputation means for the negotiating parties and the increase in the market value of the company and in the price of the shares on the stock market. On the other hand, the systematic development of collaborative relationships between the company and its stakeholders leads to an exchange of information and points of view on topics of interest that generally lead to improvements in the operation of different areas of the company.
MANAGEMENT OF THE REPUTATION
Among the essential activities to develop to manage reputation are the following:
- Integrate a committee made up of personnel from different areas of the company whose functions include the coordination of the management tasks of the corporate reputation model Align the strategic objectives of the corporate reputation management model with the purpose and strategic objectives of the company so that reputational actions are properly synchronized and contribute to their achievement. Define the categories and groups of strategic stakeholders; of those that significantly affect or are affected by the company and its activities and therefore, will have the greatest impact on the achievement of reputational objectives.
In this regard, it should be noted that the stakeholders to be included are not exactly the same for all companies, derived from the differences in the development achieved, their internal characteristics and the environment in which they operate. Among their general categories are investors, shareholders, clients, suppliers, distributors, employees, creditors, media, unions, opinion leaders, local, academic and scientific communities; government and regulators, NGOs and pressure groups, competitors / partners, sponsors and international institutions.
There are various procedures for identifying stakeholders. The AccountAbility organization and the Global Reporting Initiative suggest doing this through the analysis of dimensions such as the following (Strandberg, 2010):
Responsibility: stakeholders with whom there are or will have financial and operational responsibilities derived from regulations, contracts, policies or current practices.
Influence: stakeholders who have or will have the possibility of influencing the company's ability to achieve its goals through actions that promote or limit its performance, with informal influence or with formal decision-making power.
Proximity: stakeholders with whom the company interacts during its operation and those who live near its facilities.
Dependency: stakeholders who depend directly or indirectly on the company, its activities, products, services or its performance.
Representation: stakeholders who, through regulatory or traditional cultural structures, represent other people.
Of course, this identification is based on the premise that every organization has limited resources that force it to select or prioritize the most significant stakeholders in such a way that these scarce resources can generate the greatest possible impact both at the company level in its set and the stakeholders to whom they are directed.
The following table includes an example of categories and stakeholder groups for a pharmaceutical company.
Stakeholders of a pharmaceutical company
Source: Manual for the practice of relations with stakeholders, Instituto Nóos and Telefónica.
- Determine the reputational issues and expectations that are important to stakeholders. The foregoing derived from an in-depth analysis of their concerns, affectations, needs, interests, expectations, appreciations about the company's operation and exchange of ideas.
For example, topics of interest and expectations may correspond to issues such as working conditions, work environment, incentives, staff development, hiring workers, risk prevention, products and services, distribution channels, customer service, health and safety. of consumers, innovation and technological development, relationships with suppliers, strategic alliances, collaboration agreements, environmental protection, support to the community and civil organizations, access and dissemination of information, information transparency, compliance with laws, rules and regulations; human rights, certifications, publicity and codes of conduct or ethics.
- Specify the formal commitments that senior management will assume with the stakeholders on topics of interest selected in terms of value propositions, the benefits that it undertakes to offer them Formulate the Reputational Improvement Plan which is constituted by the mission, the specific objectives pursued, the actions to be implemented taking into account the risks that can significantly affect the reputation of the company, the procedures to be followed, the resources required, the scheduling of tasks and the control of the progress and results achieved in the improvement of relationships with selected audiences A reputational management model must necessarily include the approach of a rigorous communication program which may include aspects such as those described below:
- Determination of the company's reputational positioning Preparation of progress reports and results of the reputational improvement plan Communication program with shareholders Communication program with evaluation and certification bodies Employee awareness program Permanent information to the media
The communication activities to develop according to the different audiences are the following:
Shareholders: it is recommended to include in the communication program the publication, in the annual reports for shareholders, of a triple balance sheet that measures business results in relation to economic, environmental and social criteria.
Bodies prescribing corporate reputation: effective and systematic communication with assessment and certification bodies, especially with those with public monitors on aspects such as sustainability, reputation, responsible investment, trust and transparency and risk prevention, is of vital importance to maintain them aware of the achievements of the company in such areas and to be considered in its ranking.
Employees: strengthening the awareness of employees through internal communication so that they become aware of the importance of actions in matters of reputation. Some of the actions that it is advisable to carry out for this are organizing informative seminars related to reputation management, preparing internal documents related to the situation of the same and the results of its application and maintaining a constant dialogue between the managers in charge. of this task and the staff of the company.
Media: taking into account that there are a large number of media, it is vitally important to establish a reputational external communication program, identifying those that are key to reaching external stakeholders. The information that the company deems convenient to transmit can be done through participation in events that allow it to make known to external audiences the advances in reputational management, through notes and press conferences or company-specific documentation such as: reports, brochures and company magazines; permanent contact with the journalists responsible for the section on economy, culture, and society.
- It is essential to carry out continuous measurement of corporate reputation as this will allow us to move forward and respond to stakeholders effectively, to rectify if necessary and continue to improve over time and further enhance the value that a company provides. good reputation to the company. There are mainly two methods for measuring corporate reputation: the corporate reputation audit and reputational monitors.
The audit is a highly effective procedure because it naturally adapts to the structure of the company and allows obtaining highly objective results; The second method consists of submitting to the analysis of the reputational monitors. However, these monitors have the disadvantage of standardizing the analyzes, limiting themselves to certain variables for all companies regardless of the characteristics and particular structures of each one of them (Luján, 2008).
CORPORATE REPUTATION MONITORS
There are a number of monitors in the world that evaluate companies by calculating reputational indices. Among them are those described below.
World's Most Admired Companies
Each year, Fortune magazine publishes a report of the world's 25 most admired US and non-US companies. For this, surveys are carried out to managers, analysts and experts that value them by sectors based on nine variables: ability to attract and retain talented people, quality of management, social responsibility towards the community and the environment, innovation, quality of products / services, use of corporate assets, financial strength, long-term investments and effectiveness to do business globally (Fortune, 2017).
Global RepTrak Pulse
The Global RepTrak Pulse is a project developed by the Reputation Institute which is an international organization founded in the United States in 1997 by Charles Fombrun and Cees van Riel, among whose central tasks are to assess the reputation of the largest companies in the world and identify those best perceived. In its global version, this body prepares an annual report which is based on a survey conducted in more than 50 countries with 100,000 consumers to measure the corporate reputation of up to 7,000 companies belonging to more than 25 sectors of economic activity.
The determination of the reputation level of a company is based on the qualitative and quantitative analysis of a set of attributes grouped around seven dimensions: supply, innovation, work, integrity, citizenship, leadership and finances. Likewise, it prepares reports at the country level, including for the case of Mexico (Reputation Institute, 2017).
Business Monitor of Corporate Reputation
The Corporate Reputation Business Monitor (Merco) emerged at the end of the nineties of the last century as a university research project attached to the chair of Professor J. Villafañe, at the Complutense University of Madrid, and was specified in 2001 in what It is today the first Spanish reputation monitor. Merco annually evaluates six rankings: Merco Empresas, Merco leaders, Merco Responsibility and Corporate Governance, Merco Talento, Merco Consumption and MRS and has a presence in eleven countries, one of these being Mexico.
The Merco evaluation process includes, among its stages, a survey of company executives, expert evaluations, certified technicians and the general population on seven dimensions: economic-financial results, quality of the commercial offer, internal reputation, ethics and corporate social responsibility., international dimension of the company and innovation (merco, 2017).
FINAL THOUGHTS
Corporate reputation is part of the new business models in which the different interest groups, the so-called stakeholders, become the center of attention of organizational management and a source of collaboration and demand for compliance with economic, social, and legal commitments., environmental, communication, etc. In other words, not only of the obligations with the shareholders.
The future of reputation and its consolidation will also depend on the ability of companies to systematically incorporate it into their business practice, as an essential part of corporate routines. However, the positions critical to this practice warn about the excesses and deviations that can sometimes be reached by inappropriately exaggerating the benefits of corporate reputation or using it only for the purposes of superficial marketing or as a means to contribute to the legitimization of the neoliberal capitalist model with an apparently less economistic and more humanistic orientation.
DOCUMENTARY SOURCES
- Costa, J., (2010). Corporate image. In: taller5a.files.wordpress.com/2010/02/imagen-corporativa-por-joan-costa.pdf (Consulted: 04/18/2017). Ferruz, SA (2017). "Conceptualization of corporate reputation, new approach and proposal" Journal of the Spanish Association for Communication Research, vol. 4, No. 7, pp. 130-137 Fortune (2017). World's Most Admired Companies. In: fortune.com/worlds-mostadmired-companies/ (Consulted 06/12/2017).Luján, D., (2008). The management of corporate reputation. A differential value for the company, Universidad Abat Oliva CEU, Spain, Merco (2017). What is merco. In: www.merco.info/mx/que-es-merco Consulted (06/15/2017). Reputation Institute (2017). Global Reptrak 100. At: www.reputationinstitute.com/Home(Consulted 06/14/2017) San Segundo, JM (2012). Corporate Reputation Panel. Reputation Monitors. In: octavioislas.files.wordpress.com/2013/09/presentacic2a6nmc2aexico-monitores-de-reputacion-jmsse-sept-12-corregida-copia.pdf (Consulted 05/12/2017). Strandberg, L. (2010). Commitment to Stakeholders, IESE Business School University of Navarra, Spain.
