A Review and Critique on the Relation Between Corporate Reputation, Value Creation and Firm Performance - DOI(http://dx.doi.org/10.17800/2238-8893/aos.v3n1p7-26)

Resumo

This paper reviews the literature from the field of corporate reputation, identifies the progress to datein attempts to relate corporate reputation to value creation and financial performance, and contributes to the extant body of knowledge by presenting several avenues for future research on the topic. Threemain research questions drive this study: (a) Can reputations create value, and, if so, how? (b) How can corporate reputation be measured? and (c) Does good corporate reputation have a positive impacton financial performance, and, if so, to what extent? After thoroughly analyzing papers published inimportant journals that frequently discuss these topics, we suggest that there is a strong theoretical andempirical basis on which to conclude that good corporate reputation can be a source of competitive advantage and enhance a firm’s performance, thus creating value (research question “a”). However, there is still a lot to be done to address measurement issues (research question “b”), and especially to assess the size of the effect that good corporate reputation has on financial results, and to find a methodology to calculate the economic value of corporate reputation based on the previously mentioned effect (research question “c”). Future research should address questions such as (1) Which corporate reputation dimensions and/or stakeholder groups are most relevant to economic performance? (2) Do the new multidimensional measures of reputation really provide more effective results compared to widely used rankings that assess the association between reputation and performance? (3) What is the size of the effect of good reputation on financial performance? and (4) What is the economic value of good reputation? Addressing these issues will make relevant contributions in the quest to understand the extent to which corporate reputations are important to organizations’ success.