Editor's note

Citation

Healy, N. (2004), "Editor's note", Journal of Business Strategy, Vol. 25 No. 6. https://doi.org/10.1108/jbs.2004.28825faa.001

Editor's note

Guess who said, we want to "enjoy a reputation for fairness and honesty and ... [be] respected"? It's part of the Enron vision statement, but it's probably not very different from the mission statements of hundreds of companies. When it comes to reputation, words are abundant and cheap, but people are smart enough to know the difference between words and actions. Reputation is not something that exists apart from an organization or that can be created without a point of reference. The three contributors to our special section on corporate reputation know this very well.

When I first met Dick Martin, author of the "Reputational Mythraking" article, he had just turned in the manuscript for Tough Calls, his book about his 32 years in public relations at AT&T. In October 2003, he had published "Gilded and Gelded" in the Harvard Business Review, a hint of what was to come in his book. In both, Martin describes a golden statue of a winged youth on the roof of AT&T's old headquarters. When AT&T lowered the 24-foot-high statue for regilding so that it could be placed in the company's new headquarters, the chairman was shocked to discover that the figure was anatomically correct. So he decreed that it also be gelded. The altered "golden boy" became a metaphor for AT&T's recent embattled history, a cautionary symbol for all companies operating in today's no-holds-barred business environment where perception can be as important as reality. As Martin points out, "leading a great company isn't about creating short-term trading value, but about building a long-lasting institution. And that, in the final analysis, is not simply a matter of managing perception or trumping critics."

Where Dick Martin talks exclusively about reputation and repair at AT&T, Ron Alsop explores the nuances of corporate reputation at companies throughout the US. This Wall Street Journal reporter and editor interviewed senior people at dozens of companies that had experienced reputations crises of one sort or another. In his book, The 18 Immutable Rules of Corporate Reputation, he offers advice on establishing and keeping a good reputation and repairing a damaged reputation. In his article for JBS, Alsop opens with an anecdote of the damage Merrill Lynch sustained to its reputation because of three crises. He notes (in July 2004 when he wrote the article) that Merrill was starting to rebuild its reputation. But Alsop could not have foreseen the front page article in the Sunday New York Times business section of August 22, 2004, where a mother-daughter broker team look somberly at the camera in connection with their claim against Merrill for alleged discrimination against female brokers. So goes corporate reputation. Now Merrill has to start repair work again.

Jeff Resnick takes more of a statistical approach in his article on managing corporate reputation. His company, Ratings Research Corporation, specializes in conducting market research that evaluates and ranks corporate reputations of major companies according to objective criteria. No longer do companies and CEOs have to guess what stakeholders and the public think about them. When the reviews are less than encouraging, companies have the option of trying to change them. It's much more scientific than in the past. Harris-Fombrun, for example, has a corporate reputation quotient with six drivers of reputation and 20 attributes, such as excellent leadership, record of profitability, supports good causes, and treats people well. A number of surveys of CEOs on how they view the importance of reputation in all its dimensions indicate that they are both concerned about their reputations as never before and newly aware of their vulnerability. But corporate reputation rankings seem to be regarded as college rankings are. If a company receives a top score, it's on the front page of the employee publication and it's in the annual report. If the score is disappointing, it is often ignored and the methodology contested.

In the previous issue of JBS we had an article by Nick Carr on "The corrosion of IT advantage." Carr's article in the Harvard Business Review, "IT doesn't matter," followed by his book on the same topic, infuriated many people, especially those involved with IT. Betty Vandenbosch and Kalle Lyytinen, both professors at Case Western Reserve's Weatherhead School of Business, take on Nick Carr in their response to his thesis in this issue. The debate may not be over yet and we invite readers to let us know their opinion.

Bolko von Oetinger continues his series on innovation with a provocative injunction to break the rules that act like many tiny ropes binding us to the status quo.

Roger (Rongxin) Chen shares his research on pricing in Chinese markets with original findings on when it makes sense for multinationals to slash prices and when to maintain price levels.

With holidays to look forward to as the year comes to a close, we wish all our readers a very happy holiday season and new year.

Nanci Healy