Dear Audience, Warren Buffett is reported to have said: “It takes 20 years to build a reputation and 20 minutes to lose it. If you think about this, you will do things differently”. This is one of the most commonly used reputation quotes. But what about reputation recovery after a crisis? Does that also take 20 years? And does this differ if it is a crisis affecting a whole sector like finance – or a corporation specific issue, like Toyota? If a corporation’s reputation consists of perceptions held by others, it would seem clear that reputation cannot be ‘owned’ by the corporation but rather by those assessing it. A corporation therefore cannot control its reputation – it cannot command its different stakeholders to view it in a certain way. But it can influence its reputation – through behaviour and through its engagement strategies with its high status reputation intermediaries.
Rebuilding Reputations | Strategic Management
One helpful starting point is to define reputation, and to distinguish it from other related concepts such as brand, identity, and status. Consider the following questions: Does reputation have to be based on fact, or can it be based on false rumor? Does good corporate behavior automatically translate into a good reputation? Can you market your way to a good reputation? The fact is that reputation consists of perceptions – whether true or false – held by others about you. It differs from brand, which could be defined as what you want to be seen as; identity, which is what is core, distinctive, and unchanging about your organization and its capabilities; or status, which is by its nature a ranking system that places organizations in some form of hierarchy …
