ASSIGNMENT 4

Theories and Concepts in the Relations between Business, Government, and Society



Theories and Concepts in the Relations between Business, Government, and Society

Reputation is a powerful concept for business, government, and nonprofit organizations, just as it is for individuals. Executives, administrators, external and internal stakeholders, critics, and supporters of organizations all use the concept of reputation routinely to evaluate and communicate their perceptions about organizations. Students, too, typically pay more attention when their teachers link scholarly theories and empirical studies to an organization's reputation. Despite this high level of interest in reputation in the so-called real world, business and society scholars have not focused much explicit attention on the concept, except forWartick (1992). The applied fields of strategic management (e.g., Fombrun, 1996; Fombrun & Shanley, 1990), marketing (e.g., Bromley, 1993; Dowling, 2001), and communication (e.g., Argenti, 1998; Morley, 1998) have developed conceptual definitions and empirical measures to a much greater extent.

We wondered whether reputation is a relevant and useful construct to integrate more explicitly into theories about business and society relationships. One of the field's central concepts, corporate social performance (Carroll, 1979; Wartick & Cochran, 1985; Wood, 1991), is a source of a firm's reputation, and widespread consensus within the field is that managers should consider the expectations and judgments of various external and internal stakeholders when they make decisions. Many business and society scholars also conduct empirical studies of firm performance that use various sources of data that may reflect some aspects of reputation, such as survey data published in Fortune about the “most admired” corporations and evaluative data from Kinder, Lydenberg, and Domini and the Investor Responsibility Research Center. These studies, reported inWood and Jones (1995) , Margolis andWalsh (2001), and Orlitzky and Benjamin (2001), make occasional reference to reputation but do not explicitly explore the concept. An additional problem relates to limitations in the databases currently used for gathering information about social performance and whether they are adequate and comprehensive measures of a company's reputation (e.g., Baucus, 1995; Brown & Perry, 1994, 1995; Fryxell & Wang, 1994; Logsdon & Wartick, 1995; Sharfman, 1996;

Wartick, 2000).

Brown and Logsdon (1997, 1999) urged a more prominent focus on the concept of reputation in the business and society field in articles that reviewed the nature of corporate reputation and the relationship between an organization's reputation and its identity. They posed the question of whether reputation and identity were “separate concepts or mirror images” (Brown&Logsdon, 1999, p. 169) and concluded that these were indeed separate but related concepts. Reputation is the long-term combination of outsiders' assessments about what the organization is, how well it meets its commitments and conforms to stakeholders'expectations, and howeffectively its overall performance fits with its sociopolitical environment (Brown & Logsdon, 1999). By contrast, organization identity is an internal perception of what the organization does and how it does it (Whetten & Godfrey, 1998). Thus, identity is one influence on reputation but by no means the only one or even the most important ...