The Impact of reputational risks on organisational performance

ABSTRACT

Is Reputation a fundamental driver of business performance which has impact on organisational performance?

Reputation is as old as human existence. Organisations create reputation for themselves through their actions. The bizarre part of reputation is that it could be built subconsciously. This encourages increase in awareness of organisational reputation and attendance to stakeholders’ demands. As well-resourced reputations is capable of reflecting the delivery of demonstrable performance criteria reinforced by effective communication with and between stakeholders. This is the motivation of the research topic.

Corporate reputation manipulates the products and services consumers’ purchase, the investments investors make, the job offers prospective and current employees pursue and the regulation regulators make as well as the attraction of groups in a society towards or away from an organisation.

Organisations are striving to achieve positive perception from the various sects in the society to ensure their purposes, on which performances is assessed. Strong reputation can provide reasonable assurance that objectives are achievable as it creates stability and remove doubt.

The objective of research is to assess the impact corporate reputation (using quantitative and qualitative research methods) deduced from public ratings, to provide a basis on which achievement of organisational performance could be enhanced.

It was found out that individuals in a society belongs to at least one group of stakeholders and organisations inability to provide for their interests is likely to results in repulsive actions. Since these are depriver to organisational performance achievement, it could be asserted that corporate reputation ameliorates performance

KEYWORDS: Corporate Reputation, Reputation Management, Organisational performance.

LIST OF ABBREVIATIONS: Reputation Management (RM), Corporate Social Responsibility CSR

CHAPTER ONE: INTRODUCTION

1.1 An Overview

In the field of risk management, various researches have been conducted dealing with measurement and management risks. The same applies to reputational risk, as part of the enterprise risk management of an organisation. A number of researches has confirmed that efficient of all sort of risks ensure reduced losses. However, reputation, highlighted as risks of risks (Economic Intelligence unit, 2005) has limited research in integration of reputation risk into the Enterprise risk management.

As discussed earlier that reputational risk being difficult to measure and quantified should be focused on more with high level of awareness, this is not the case.

The research takes approach through the input it adopted in its questionnaire of seeking the perception of the public on reputation. The lack of this approach by governmental institutions, profit and non-profit oriented organisation in jointly seeking the overall perception of all its stakeholders which prompt this research aiming for the objectives:

To assess the effects of reputation risks on perspectives of organisational stakeholders who could influence performance of entities

It aim to provide an understanding of the structure and requirements of implementing effective reputation management in consistent with recent knowledge in this area.

These objectives are attempted through the following questions:

Is there a relationship between corporate reputation and performance What are the effects of corporate reputation on organizational performance Can these findings be generalized

1.2 Problem Definition

Corporate Reputation of an organisation is ever – existing but not always thought of until an organisation realises it may influence its objectives, which it uses to gauge its performance or could be used to attain competitive advantage. The question that arises is that what constitute reputation and how to manage them to avert their negative impact on an organisationAs stakeholders of an organisation are numerous, it is therefore essential to acknowledge managing corporate reputation from all fronts of its stakeholders. The researcher considers the existence of different groups of stakeholders of an organisation based on sample selected along with their decisions in situations which go along their perspective on organisation reputation.

Essentially, I argue on the side of effective management of stakeholders is capable of influencing the direction an organisation takes, adopting its reputation as a means for such proposition.

1.3 Research Objective

The objective of this research is to assess the effects of reputation risks on perspectives of organisational stakeholders which could influence performance of entities. It also aims to provide an understanding of the structure and requirements of implementing effective reputation management in consistent with recent knowledge in this area.

1.4 Theoretical Framework

Measuring the impact of reputation should be done through the major elements of RM, Although these elements are difficult to measure directly from the sample of the research, these elements are variables which prompts their components or causal characters which were identified as major independent variables; with relation to the dependent variable to be measured.

It should be noted this kind of analysis does not identify the weakness points. Therefore, to locate the major weaknesses that lie within the main elements, the components of those elements; minor independent variables; should be measured in order to locate the exact weakness components.

1.4.1 Dependant Variable

Corporate Reputation

1.4.2 Major Independent Variables

Shareholders

Employees

Customers

Pressure groups

Regulators

1.4.3 Minor Independent Variables

Investment and Share price

Employee Productivity

Media

Social Responsibility

Product Performance

Regulation infringement penalty

Each of the research variables will be measured by a set of statements covering all dimensions of a variable. These statements are demonstrated in the form of a questionnaire, in order to have standardized data allowing easy comparisons, which would also give more control over the research process. Such a strategy in collecting the data will keep the researcher independent. The research included the general public captured through various media which support easy access to suitable individuals needed for the research and who are likely to qualify for one or more of the independent variables.

The statement will be weighted individually depending on the importance of each using a five – point Likert scale where:

1 refers to very likely/ very unlikely 5 refers to very unlikely / very likely

In support of the position of questions in the questionnaire, this could either be positive or negative.

1.5 Research Questions

The research will attempt to find answers to the following questions:

Is there a relationship between corporate reputation and performance What are the effects of corporate reputation on organizational performance Can these findings be generalized

Statement of Hypothesis

Null hypothesis: The level of reputation risks is not directly related to organisational performance.

Alternate hypothesis: The level of reputation risks is directly related to organisational performance.

1.6 Research Methodology

1.6.1 Data Needed

The data for this study will be collected from different sources. A questionnaire is designed for this purpose. The researcher will use specified questions for clarifying any questions that might be misunderstood by respondents, within some questions, to avoid misleading answers, and to provide additional data sources.

1.6.2 Sample Selection

The sample is open to the general public to ensure reasonable response needed for all sections on the questionnaire. The researcher will send out questionnaire to unlimited response from which results will be scrutinised.

1.6.3 Sample Size

The researcher limited the sample size to 600 which he deemed reasonable and for proper data analysis within the short time of the dissertation, for four weeks.

1.6.4 Data Analysis

All data will be analysed through ‘Microsoft Excel’ and simplified as per the needs and specific requirements of this research. The final data is transferred from ‘Microsoft Excel’ after being run through statistical tests to measure the strength of correlation between the independent and dependent variables by applying the chi test square and then the other statistical analysis. These are the minor independent variables, with their major elements. We shall then measure the overall effectiveness of each minor element to detect the weakness points, later measure the overall effectiveness for the major elements, and finally measure the overall effectiveness to the sample in order to represent the population and reach the objective of the research taken.

1.7 Assumptions and Limitations

1.7.1 Assumptions

Organisations are aware that negative actions or occurrence towards any stakeholders will have negative impact on their performance. The respondents of questionnaire belong to at least one of the stakeholders organisations have. Respondents understand terms used in the questionnaire as they attain at least degree level of education.

1.7.2 Limitations

There are numerous limitation faced during the research:

The Questionnaires may not be addressed with full attention and in good faith. As a result, the questionnaire was set so that many different questions would address same result, thus not directly focusing on one element or component. Longer time limit for the duration of the research would have recouped more results, thus better representative sample, reliable data and analysis could have been done. The researcher was faced with restricted resources to assess avenues which could have provided better insight. Other data collection means inaccessible to the researcher will have added value to the quality of result. Chapter one: Introduction: A brief introduction to the background of Corporate Reputation Management. It highlights the research objectives and questions and explains the structure of the research. Chapter two: Literature Review: A discussion and analysis of available research on RM. The literature review sets the research work in the wider context of corporate reputation. Chapter three: Research Methodologies: This chapter discusses different methodologies adopted in this research and the research strategy chosen. It describes the questionnaire made to measure the impact of reputation on organisations including statistical analysis used including the method of testing and validity of instrument used. Chapter Four: Data Collection and Results: Data collected from the questionnaires, are being analysed in this chapter. Chapter Five: Data Analysis: Findings from research are summarised. Attention is again directed at the research objectives, questions and hypothesis. Chapter six: Conclusions and Recommendations: The dissertation ends with a summary and presenting of the final results and a discussion as well as recommendations. It discusses the limitations faced during the research and the contributions and recommendation for future researchers.

1.8 Research Structure

1.9 Conclusion

This chapter set the tone of the other chapters. Its framework focus on the acknowledgment that to achieve research objectives and provide answer to the research questions, an all-inclusive study based theoretical and empirical testing are needed. The details of approach adopted used in this research are later discussed in coming chapters with this chapter pointing to where to find areas of the research reader may be interested.

CHAPTER 2 LITERATURE REVIEW

2.1 Introduction

This chapter is an overview of the concept of reputation management and available research on Corporate Reputation. This will give us an overview of Corporate Reputation, its elements and constituents, its importance to businesses and discussion on its measurements and management.

2.1.1 INTRODUCTION

“Reputation is the opinion generally held of a person or thing” (Collins, 2009). This shows reputation is as old as man. One of the few old inferences of reputation could be traced back to 1961, where (Susan V. Scott, 2005) it was quoted that how an organisation and its products is regarded could influence the personnel it recruits, investors, legislations, adequate customers and relationships in the community it operates. Reputation is a reflection of how well or how badly different groups of interested people – stakeholders – view a commercial name (Larkin, 2003)

Reputation is a socially shared impression, a consensus about how a firm will behave in any given situation. It is based on a set of collectively held beliefs about a company’s ability and willingness to satisfy the interests of various stakeholders (Helm, 2007).

Reputational risk is any risk to an organisation’s reputation that is likely to destroy shareholder value. Reputational risk is one of the risks Basel 2 definition of operational risks excludes (Reputationsl risk, 2011)

Reputational risks range from physical failure (manufacturing fault or accident) to security failure, product/service shortfall, competitor targeting, bad behaviour, unfair employment practices, damage to health, safety or the environment, inconsistency in policies/practices, poor governance/ethics, regulatory intervention, threat of litigation, adverse stakeholder perception and so on. In fact, reputation has always mattered, but the assault on corporate reputation has intensified as a result of some compelling trends that are placing new pressures on companies (Larkin, 2003).

In brief, “Reputations reflect behaviour an organisation exhibits day in and day out through a hundred small things. The way it manages reputation is by always thinking and trying to do the right thing every day”. Reputation risk can be considered in terms of corporate reputation (Larkin, 2003).

2.2 DEVELOPMENT OF REPUTATION

Until the turn of this century, after which the gathered momentum regarding reputation culminated into series of books, conferences and institutional ratings and legislations – a view which could be supported by the recent texts (Matteo Tonello, 2007) on the topic(mostly less than twenty years), recent establishment of reputation institute in 1999 which followed the quarterly Corporate Review Journal in answer to “demands by practitioners for answers to questions about how reputations affect competitive positioning, about how to examine and value corporate reputations” (Fombrun, 1999), corporate reputation is modestly regarded in risk management.

2.2.1 GRADUAL EVENTS SUPPORTING FOUNDATION OF REPUTATION

The abrasion of traditional authority

The respect in the judgement of experts has plummeted to a very low level. People don’t longer hold on to comments of doctor, accountant, lawyer or priest. Industrialized societies are experiencing low levels of confidence in spite of recent stable economic and political conditions. Surveys suggested that trust in government is at an all time low, characterized by a pervasive decline in deference to authority. Economic growth over the last few decades was supported by the good modern welfare state, have resulted to economic security. Authority has shifted away from religion and the state and has moved to individuals, with growing preoccupation with the quality of lifestyles, opinions, values own autonomy (Larkin, 2003).

Nowadays, conventional authority is rejected, and people prefer to believe in their own sense of identity and individuality where as everyone has view and opinion believed to hold the same weight, regardless of the credibility of its source which is capable of prompting claims of discrimination or exclusion, when reinforced through the media and consumer action (Larkin, 2003).

Decline in trust

There is great concern about the human impact on the environment, as the growth of material consumption and population generate greater pollution and resource degradation. The economic and political structures of global and national development are, in some people’s minds, starting to develop doubt and encourage inequality (Larkin, 2003).

A decline in the reputation of science

Lack of trust has generated motions that : The perceived purpose of science is crucial to public response, people now question all levels of authority, including scientific authority, people place more trust in science which is seen to be ‘independent and there is a culture of institutional secrecy which invites suspicion (Larkin,2003).

Government policies have been increasingly oriented towards identifying and protecting victims, or potential victims, in the form of new ‘rights’. Recently, the right to compensation and the recognition of a formal complaint was given an emotional dimension by a growing concern about the needs of victims. It has become the norm to form a victim’s group, not only for compensation purposes, but to carry the mantle of demands for better safety and associated regulation (Larkin, 2003).

Organisations who do not appreciate the social and political status accorded to victims exposed themselves to reputation risks.

Corporate social responsibility agenda

The relationship between business and society has benefits, but also attracting new risks which will determine prosperity or extinction. Some of these impact on the environment, and on society in general and have created new challenges with implication for financial and reputation performance (Larkin, 2003).

Corporate social responsibility is based on the belief that trade brings obligations and that companies should be accountable for their use of resources. It covers a number of issues:

Employment – workforce diversity and appropriate workplace conditions and practices.

Environment – limiting environmental impact from any stage throughout product and process lifecycles.

Human rights – Respect for human rights anywhere a company operates.

Communities –Involvement in community activities of a company location.

Commercial relationships – dealing fairly with customers, partners and suppliers;

Numerous influential accreditation schemes relating to some or all of the above issues have emerged in relation to CSR performance and reporting. Achieving a balance between commercial success, environmental quality and social justice means that the stakes are becoming much higher for companies in their dealings with the outside world. Society expects more from business. Transparency and accountability have become the watchwords of modern business, and external perception of the way in which companies are seen to be behaving now has material consequences for corporate reputation(Larkin,2003).

Governance and liability

The pursuit for better institutional and business accountability, in response to a perceived decline in trust, has affected human existence. This is in the form of detailed and costly controls via extensive legislation and regulation. These new pressures for transparency and accountability are increasingly becoming enshrined in corporate governance guidelines and disclosure legislation (Larkin, 2003).

2.3 WHAT IS CORPORATE REPUTATION?

There is certainly no single or dominant definition or theory of corporate reputation. Part of the problem is that the academic research in this area of knowledge is still in its infancy, also reputation overlaps various disciplines of knowledge, each with a distinct perspective and research approach (Larkin, 2003). The lack of systematic attention to corporate reputations can be traced to the diversity of relevant academic and practitioner literatures that explore different facets of the construct (Fombrun, 1999).

Corporate reputation is defined as a collective representation of a firm’s past actions and results that describes the firm’s ability to deliver valued outcomes to multiple stakeholders (Fombrun, 1999). Corporate reputation is a set of attributes ascribed to a firm, inferred from the firm’s past actions (Keith Weigelt, 1988).

2.4 CREATION OF REPUTATION

Reputations are viewed as having some basis in organisations’ actions, (providing a quality good/service, for example) as well as being constructed by others via their perceptions of those activities (Schweizer and Wijnberg, 1999, p. 251).

It is created through various media of information on a country, industry and corporation. This could be through word of mouth, personal contact of experience, direct mail, advertising, product design, price attractiveness, advertising, news, weblogs etc (Manchester Business School, 2002).

Information could be directly passed through interactions with an organization or mediated reports about an organisation to stakeholders. Majority of the information stakeholders receive about organisations is derived from the news media – reason media coverage is an important feature of reputation management (The Reputation Paradigm, 2001).

Reputation behaviour is strategically important in incomplete settings, for example where all players in an industry are not equally informed about parameters that define pay-off functions and possible strategies. An instance is when a player has private information which other players lack, giving the player a reputation (Keith Weigelt, 1988).Such

information could be the firm’s cost functions, plant capacity and location, managerial ability, marketing plans, R&D expenditures top management values and so on (Keith Weigelt, 1988)

2.5 Elements of reputation

A company reputation is expected to reflect some elements that improve its corporate image in the public place for company performance. These element are related to knowledge and skills endowed in the company; emotion attached from the consumers; leadership, vision & desire of the stakeholders; quality of goods and services offered; financial, social and environmental credibility (Brady, 2005).

Knowledge & skills: A company reputation is as good as its employees and application of knowledge and skills, which are the major determinant of current and future success. As drivers of innovation, the optimum use of employees’ talent is paramount to growth.

Emotional connections: Consumers attach emotions to services and products of different companies; without this emotional connection many companies would be alike. It includes the perceived values and culture of different companies, and how these link with those of its stakeholders (Brady, 2005).

Leadership, vision & desire: Most Stakeholders attach a high value to companies that are perceived to be led by a group of people who have vision and desire. It’s not enough to have vision, the company must be perceived as being able to realize its visions. This element refers to perceptions concerning motivated and visionary leadership; it equally refers to governance style and practice.

Quality: A company is seen to be meeting customer’s requirements when the product or service concern is of high quality, that is, not just once but consistently. This element concerns historical reliability and examines whether the company has a consistently supplied products and services of unrivalled quality.

Financial credibility: In the process of building credibility, a company should consider have a strong historical and contemporary record for generating better than average returns for shareholders. This is traditional means by which a company’s performance is judged (Brady, 2005).

Social credibility: The element of social credibility is related to the company’s position in society, and it examines whether the company is perceived as being a valuable actor in society, acting as a “good citizen” and adding to social equity, therefore earning a “license to operate.” It can be clearly separated from environmental credibility, primarily because the two are so often in direct conflict. Society’s demands are as often aligned with financial performance as they are with environmental responsibility (Brady, 2005).

Environmental credibility: Businesses need to ensure that they aren’t perceived to be adding to the negative legacy that we leave for future generations. Not only should this, but to create maximum value the business strive to create environmental value, thereby offsetting the actions of less responsible organizations (Brady, 2005).

2.6 ROLE OF REPUTATION

Past research suggests that corporate reputation is a determinant of initial investment decisions, possibly leading to detrimental stock choices. It has effect on established investor relationships, namely investor satisfaction and loyalty (Helm, 2007).

Reputation signals publics about how a company product quality, service, employment characteristics, strategies, and prospects are compare to those of competitors. Often corporate and public audiences rely on a company’s reputation in making investment decisions, career decisions, and product choices.

A corporate reputation assists in attracting good people and good partners; a poor reputation can undermine motivation within a company. A Firm that develop reputations for attending to employee welfare make themselves in a good bargaining positions in labour markets, attracting better quality applicants and achieving lower costs or higher productivity.

Other potentially favourable consequences include the ability to crystallize a company status within an industrial social system. Signalling product quality and service allows companies to charge premium prices. Firms do not strategize in isolation. Instead, they take strategic action with a view towards competitors’ behaviour and the importance of signals they provide to stakeholders concerning product and employment attributes (Irene Devine, 2001).

In summary corporate reputation has a role in stakeholder decision making process (Puncheva, 2008).

2.7 IMPORTANCE OF REPUTATION

The importance of reputation has been a low volume theme in organisational literature. Organisations are increasingly viewed and assessed against aesthetic component of reputation (identity, image, culture, and corporate brand), social responsibility and business ethics. They are now answerable to a wide range of stakeholders (staff, customers, interest groups, government and regulators) on burgeoning issues (e.g. trans-fatty acids, environmental protection, genetic modification, money laundering). They are obligated to address debates surrounding social consequences over which they have little or no direct control. (Susan V, Scott and Walsham, 2005)

Reputation is a valuable asset which can affect financial performance and provide a source of competitive advantage. If it is properly integrated into human resource management and implemented across the organization, reputation is an effective driver of high performance (Larkin, 2003). A firm’s reputation is an asset that can generate future rents (Keith Weigelt, 1988)

It is much easier to make the case for valuing reputation by pointing to the costs associated with major mismanagement and/or communication failure. Companies that have been the subject of crisis situations, perceived to be either badly handled or the result of significant operational failure – particularly where the result has been loss of life, injury, large-scale environmental damage or asset reduction – have experienced share premium erosion, market share loss, debt-rating decline, litigation and unwanted regulatory costs. And where organizations have failed to communicate effectively in the immediate aftermath of a crisis, research indicates that the consequences of adverse public perception, media scrutiny and pressure for tougher regulation means that the degree of financial loss can be greater, longer and more difficult to recover from(Larkin, 2003)

These losses include expectations of future clean-up costs, litigation and reparation costs, as well as the impact of more restrictive legislation which can affect whole industries. The costs also include negative perception and loss of regard in the eyes of customers, investors, employees and communities (Larkin, 2003)

Consequences could be intense as core business performance; credit rating and market position are affected resulting to loss of allegiance from stakeholders and vulnerability to hostile take – over. Regulatory pressure also increases to integrate reputational risk management as part of corporate governance and a comprehensive risk management system (Kaiser, 2009).

Stressing the importance more, corporate reputation is the, most important intangible asset held by a company as it represents the extent to which the organization is meeting the expectations of its various constituents (Matteo Tonello, 2007). Also, Reputation is the strongest determinant of any corporation’s sustainability. Stock price can always come back. Business strategies can always be changed. But when an organization’s reputation is gravely injured, its recovery is difficult, long-term, and uncertain. A risk to its reputation is a threat to the survival of the enterprise (Firestein, 2006).

2.8 IMPACT OF REPUTATION

Impact is defined as the measure of the tangible and intangible effects (consequences) of one thing’s or entity’s action or influence upon another (businessdictionary.com, 2011).

It was argued that the ability of an organisation to command premium price over competitors increases with its level of organisation (Tomasz Obloj, 2010). A good reputation has an impact on the bottom line, it allows firms to hire and hold onto talented workers (Laura ,2005), attract investors, customers and partners, launch successful products and win market share– all factors that affect financial performance(Larkin, 2003).

A loss of reputation can affect the future actions of stakeholders toward an organisation (Keith Weigelt, 1988). As mentioned earlier, corporate reputation influences the products and services we buy, the investments we make and the job offers we pursue (Larkin, 2003). A loss of reputation can affect the future actions of competitors in an industry towards a firm (Keith Weigelt, 1988); this also applies to its stakeholders.

“In today’s turbulent economic times, a fine reputation is arguably more important than ever before” (Larkin, 2003). It could be a tool used to reduce tension between business, its shareholders and customers. In addition, to reduce barriers to competition and market development, creation of conducive environment for investment and access to capital, attract the best recruits, suppliers and partners, reduce share price and market volatility, minimize the threat of increased regulation or litigation, reduce the potential for crises and establish trust and credibility with stakeholders (Larkin,2003). As (Laura, 2005) mentioned, a good reputation can solve crisis.

The increasing value of corporate reputation as a source of differential advantage in the global market (Laura Tucker, 2005) is important for gaining competitive advantage. It takes careful thought, meticulous planning and constant hard work over years to build and maintain reputation and it can be lost overnight(Larkin,2003).

The financial impact of reputation loss can be catastrophic, it could be through decline in revenue as a result of a product boycott or failure, asset value depletion from a brand collapse, resource diversion from fixing problems, increased cost of capital as a result of share premium erosion, exposure to predatory takeover, costlier compliance through regulatory intervention or bankruptcy (Larkin, 2003).

In conclusion, reputation is one of the most intangible but fundamental drivers of business performance (Kaiser, 2009).

2.9 REPUTATIONAL RISK

Having mentioned reputation as a combination of different ideas, it comes down to the essence of a corporation which it seeks to achieve through strategy. As strategy involves complex constituents, consideration of internal and external part of an organisation to assure its continued success and adapt its operations to environmental changes in the long term (Jan Bebbington, 2007) is the reason the strategic perspective of reputation risk management is the suitable definition of the subject matter here.

Reputation is crucial to rebuilding a successful corporate strategy and a foundation for future success (Kaiser, 2009). However, reputation risk is complex as it is managed directly as it depends on creating a sustainable connection between target characteristics of features such as quality, price and service and external perceptions via responsibilities of marketing, public relations and external communications (Kaiser, 2009).

Reputational risk management concentrates on detecting impending threats to the desired reputation (HONG KONG MONETARY AUTHORITY, 2008) – whether objectively justified by company performance or not – and either preventing their occurrence or mitigating their consequences (Kaiser, 2009).

The challenge is that quantifying reputational risk is harder than quantifying other forms of risk. Reputational risk is qualitatively distinct, and is managed in a subtle and judgmental way, rather than according to a mechanical framework. For instance, eliciting the desired attitudes and behaviour among staff can be more successful against the background of an explanatory, qualitative perspective than a set of numerical targets (Kaiser, 2009).

Successful reputational risk management is determined by effective cooperation and communication between senior management who determines the target reputation and the overall risk strategy, the centralized risk management functions who undertakes the methodologies and processes for any risk management framework among which, is the reputational risk, the corporate communications function which plays an important role in identifying, assessing and mitigating reputational risk and lastly the business operations which generate risk, for example by designing flawed products, but can also mitigate it through careful analysis and proper communication with customers (Kaiser, 2009).

The major aim is a reputational risk management framework which support with the institution’s strategic objectives and applies on a company-wide basis. Such a system will be capable of monitoring and controlling the overall condition and effectiveness of company-wide reputational risk management. In this, it will realize the benefit of generating real value for the business rather than simply ensuring compliance with regulatory requirements

In determining the oversight of reputational risk of an organisation, focus should be on:

The attitude of local communities in which the company operates;

The evaluation by judges and juries hearing a lawsuit involving the company;

The satisfaction and fidelity of customers;

The ability of the organization to recruit and retain talented employees and access crucial operating resources;

The policy-making decisions of regulators and legislators;

The ability of the organization to establish strategic relationships with third parties (i.e., supply agreements, joint ventures, etc.);

The ability of the organization to raise capital and finance acquisitions;

The positive inclination of media towards the company (Matteo Tonello, 2007);

Ineffective reputational risk management leads to negative publicity, loss of revenue, litigation, loss of clients and partners, exit of key employees, share price decline, difficulty in recruiting talent (Reputationsl risk, 2011).

Finally, reputational risk can arise from almost any business failure. As such, it is too important and wider-ranging to belong to any individual or department. It is harder to recover from a reputation failure than to build and maintain reputation. It takes approximately three-and-a-half years for a company to recover from a reputation failure (Matteo Tonello, 2007).

2.10 MEASURING OR EVALUATING REPUTATION

One of the biggest challenges for managing reputation is the means to measure it. There is vagueness among most publicised measures for reputation, although they are helpful in providing useful criteria for developing reputation risk management strategies.

The criteria used to gauge a company’s reputation vary depending on the population, interested monitor seeks, nevertheless, there similarities of criteria of assessment (Fombrum, 1998). Selection criteria are not particularly robust, depending on opinion rather than a formal evidence base (Weber Shandwick and Fombrum, 2001).

Assessment of reputation involves subjective collective assessments of the trustworthiness and reliability of firms as it emerges indirectly from various arms of the organisations. Therefore reputation unfolds through external reflections of internal “sense making” activities conducted within firms which develop from prior activities and prior assessments of performance by diverse evaluators and as such comprise multiple assessments of firms (Jan Bebbington, 2007).

Evaluators of reputation ranking studies (e.g. Fortune, Management Today,

Financial Times) focus on five elements of reputation:

(1) Financial performance;

(2) Quality of management;

(3) Social and environmental responsibility performance;

(4) Employee quality; and

(5) The quality of the goods/services provided (Jan Bebbington, 2007).

Hence, reputations are viewed as having some basis in organisations’ actions, (providing a quality good/service, for example) as well as being constructed by others via their perceptions of those activities (Schweizer and Wijnberg, 1999, p. 251).

Some reputational ratings are deemed to be biased. As their focus on particular companies, industries, countries or sample is supported with convincing evidence. They also target financial indicators. In arriving at their assessment of, reputational data is sourced from:

Media ratings Ratings in Specialised Publications Ratings by Social Monitors (Fombrum, 1998)

The data in this research falls under the last category.

Recent research suggests that people make their judgements about corporate reputation according to attributes within six categories – emotional appeal, calibre of products and services, financial performance, workplace environment in terms of quality of management and employees, and commitment to being a good corporate citizen, referred to as corporate social responsibility(Larkin,2003).

Despite the variety of techniques now available to quantify reputation risk

(e.g., Reputation Quotient, ID test, Personification Metaphor, etc.), companies and investors still do not agree on a common set of metrics (Matteo Tonello, 2007). It was stated that “there is no general agreement on how to measure it, but there is a general agreement that it is important” (Schwaiger, 2004).

2.11 REPUTATION MANAGEMENT

Reputation is harder to manage than other types of risks, due to its “amorphous” nature as the risk of risks (Matteo Tonello, 2007)

Reputation risk management remains to be uncared for as a central part of operational management. It is not adequately recognized as a valuable intangible asset and it is not managed in a way that concedes that reputation risks can and do emerge from across the business.

Managing reputation on the risks and opportunities fronts is such a valuable asset as it affects all parts of the organization. As a result, risks to reputation must, therefore, be fully acknowledged at the highest level of the organisation as an integral part of the overall risk management process and as a catalyst for protecting and enhancing customer, employee and shareholder value (Larkin, 2003)

In adopting a stakeholder approach to reputation management, executives should first identify the key stakeholder relations for the company. The following relations should be considered:

Enabling relations with shareholders, bondholders, banks, institutional investors, suppliers, and employees are key stakeholders because they provide and control resources enabling the organization to exist and operate.

Customer relations with customers as key stakeholders because they provide demand for business output.

Normative relations with professional associations, trade unions, legislatures, governmental agencies, financial analysts, rating agencies, and other self-regulatory organizations may be key stakeholders as they function as standard-setters and determine the boundaries of the company’s business activities.

Peer relations with other business organizations (including competitors), probably key stakeholders if they participate in a joint venture, a non-compete agreement, or other strategic relationships with the company.

Special interest relations with local communities and a number of activist groups (such as social and environmental organizations) could be important stakeholders as they have diffused interest in and claims on the company.

Once key stakeholder relations have been identified and categorized, management should analyze them from a situational and contextual point of view, so as to prioritize groups of stakeholders based on criteria including: their actual influence; the criticality, rationality, and urgency of their claims; their access to and control of key business resources; and the likelihood of their taking supporting action.

Ironically, it could occurred from this analysis that a company might even conclude a relation with a certain group of stakeholders should be weakened or severed rather than strengthened because the association with that group would, in fact, damage corporate reputation.

There are three distinct tasks to managing reputational risk: establishing reputation to begin with, maintaining it through the rough and tumble of business operations, and restoring it when it has been damaged. The latter two, especially, call for very different actions (and actors). Whereas establishing and maintaining reputation may be considered a matter of successful risk control in other areas, reputational repair clearly cannot ( Economist Intelligence Unit, 2005)

Developing a strategy for enhancing and protecting corporate reputation requires a cautious resource allocation decision, which should be made in light of the organizational and industry context in which the firm operates. If it is correctly implemented, a stakeholder approach functions as a feedback system for the purpose of forming or revisiting the core identity of the firm (Matteo Tonello, 2007).

Numerous institutions also seek to minimize and manage these reputational risks through formal risk and crisis management procedures (Judy Larkin, 2003).

Fombrum also suggests that companies which manage their relationships with stakeholders invoke a number of core principles that contribute to effective reputation management (Larkin, 2003). These include:

A sense of distinctiveness in the minds of stakeholders. A tendency on the part of successful companies to focus on a core theme. A perception of consistency in performance and communication. A focus on integrity and authenticity in the contact and communication between an organization and its stakeholders. A commitment to transparency as a prerequisite for effective financial and social performance which encourages contact with and support from stakeholders.

The following are the guiding principles for towards effective reputation risk management (Larkin, 2003):

Acknowledgement that reputation is a valuable intangible asset and needs to be actively managed by the board of directors;

Become a listening company by developing finely tuned radar that can scan for icebergs and track individuals, groups and organizations which may have an interest – positive, neutral or negative – in a business presently afterwards.

Integration of clear and robust reputation management systems with routine risk management procedures

Creation of own code of good behaviour through CSR to assure licence to operate (Larkin, 2003)

Treating stakeholders intelligently with respect and give them the information and options they need to decide.

Working as though everything said and done is public Understanding and acknowledge potential risks to reputation. Establish early warning and monitoring systems and considering the ways to improve operational and organizational Processes. Establishment of clear process for policy development and Communication, and Identification of stakeholder groups and establishes their information needs. Utilize third party allies to build credibility.

High responsiveness and communication in relation to differing concerns of each stakeholder group and Building separately, investment, product and service benefits from the risks.

Finally, Constant Monitoring and evaluation of all parts of organisational operations for risk management.

2.12 OVERVIEW OF RESEARCH IN CORPORATE REPUTATION

Research into reputation risk provokes literature from several knowledge areas which are needed to shed more light on the established relationships existing between these disciples and limitations among them.

Fombrun, 1999, identified six dinstinctive views of Corporation Reputation; these are the economic, strategic, marketing, organisational, sociological and accounting views with only the last mentioned view unable to positively address reputation through expending (internally- generated) reputational building activities of R&D rather than capitalisation as assets. The other views did not agree (Larkin, 2003).

Studies in this field have tended to fall under the two main umbrella headings of economic/strategic management informed perspective that views reputation as a resource, to a sociologically informed perspective that sees reputation as the outcome of shared socially constructed impressions of a firm (Scott and Walsham, 2005).

Under the strategic perspective, reputations is believed to “produce tangible benefits: premium prices for products, lower costs for capital and labour, improved loyalty from employees, greater latitude in decision making, and a shield of goodwill during crises (Jan Bebbington, Carlos Larrinaga and Jose M. Moneva, 2007)

The sociological view, however, focuses on how reputation widens and how it can be defined and measured (Jan Bebbington, Carlos Larrinaga and Jose M. Moneva, 2007).

Many academic disciplines have made contributions to the reputation literature from both empirical and theoretical perspectives. As demonstrated below, some theoretical studies have used concepts closely related to implicit claims whereas others addressed issues that do not distinguish between implicit and explicit claims. In some situations, it is difficult to see the link between reputation and shareholder value. The blurring of explicit and implicit claims is most frequently observed in empirical literature where shareholder wealth reductions are related to specific events that attack a company’s reputation (Irene Devine, 2001)

The vast majority of reputation risks stem from what companies produce or provide, how their staff behave, how the company behaves and what its guiding principles are. According to the research made, there is a strong correlation between an organization’s reputation and its ability to successfully market to consumers as cost-effectiveness is achieved through willingness of consumers to try products marketed under a trusted company’s corporate brand which enables the organization to have a greater ability to charge its customers a premium. Marketing effectiveness is the bridge between corporate reputation and Return on Investment. (ERM Academy, 2009). This illustrates another area of corporate reputation along with its effects and impacts.

In 2006, Robert Inglis, Clive Morley, and Paul Sammut, in their research on “Corporate reputation and organisational performance: an Australian study, could not establish any relationship between corporate reputation and financial performance. They admitted that this could not be the same in other continent of the world. Reputation risk has led to the collapse of several companies in the past which has prompted various attempts to minimise reputation risk.

In a similar context, Jason Perry and Patrick De Fontnouvelle (2005) concluded that no simple correlation can be established between corporate social performance and corporate financial performance. The activities that generate CSP do not directly impact the company’s financial performance, but instead affect the bottom line via its reputation capital.

Furthermore, Deborah L. Murphy, Ronald E. Shrieves and Samuel L. Tibbs (2007) in their work: Understanding the Penalties Associated with Corporate Misconduct: An Empirical Examination of Earnings and Risk focused on profitability measured as reported earnings and analysts ‘earnings forecasts. Using announced allegations of corporate misconduct appearing in The Wall Street Journal Index between 1982 and 1996. they investigated related party and third party allegation which they deemed suggested ambiguity on their different impact of on future cash flows due to legal costs or adverse consequences from customers, suppliers, investors, employees, or other related parties changing the terms with which they are willing to trade with the offending firm. This links up with idea of reputational risk management of assessing stakeholders’ perceptions.

It was concluded that no definitive link between allegation-related wealth losses and changes in financial performance has yet been established and the importance of reputational penalties is underscored by analysis of the association between allegation-related changes in firm value and changes in earnings and risk (Deborah L. Murphy et al., 2007).

The closest research and literature to the research topic was by Sung-Un Yang and James E. Grunig, (2005). Their work was an effective one as model and hypothesis were formed and they researched their work into performance except for that it was outward looking only and the internal contributions of different corporations from different industries they worked on were not mentioned. Recent Scholars has stated the way to value reputation risk is through its contribution to different aspect of both internal and external parts of an organisation using an outside- in strategic approach.

Markus Eberl, and Manfred Schwaiger, (2005) stated that prior research on reputational risk has adopted bias basis, they suggested distinct reputational components which are hypothesised as affecting financial performance differently and they concluded that two research approaches of the cognitive and the affective reputational dimension significantly influence future financial performance after controlling for past performance.

The pressure to generate short-term financial returns that is placed upon companies by some shareholders and financial research analysts must be balanced against fundamental choices about the type of recognition the company wants to receive from present and future generations. At times, strengthening or even simply cultivating a relationship with all stakeholders might be impossible. This is where the company should realize the strategic opportunity of corporate reputation and reputation risk management and choose to invest on enhancing its relations with those stakeholders whose support is crucial to the business’ long term objectives (Matteo Tonello, 2007).

Stakeholders of an organisation base their behaviour on perceptions of a company’s soundness, reliability and performance on their past and present activities. Damage to corporate reputation can arise from adverse trends in core financial performance to poor customer service, excessive customer complaints and regulatory infraction (Kaiser, 2009).

Understanding how different aspects of an organisation’s activities impinge on stakeholder perceptions is therefore a vital aspect of protecting a company’s reputation ( Economist Intelligence Unit, 2005).

Furthermore, strategy assesses all stakeholders, integrates corporation activities and relates a corporation’s resources and competences to the environment (Paper P3 “Business Analysis”, 2008) which makes it sensible that the constituents of reputation, namely: Products and services, workplace environment, social responsibility, vision and leadership and financial performance are the purpose of strategy to ensure every part of the organisation participates in reputation management (Larkin, 2003). Corporate reputation oversight represents a formidable strategic opportunity to strengthen stakeholders’ relations that pertain to the company’s long term business objectives (Matteo Tonello, 2007)

A survey of risk managers resulted to findings that: reputational risk emerged as the most significant threat to business, risks to their companies’ reputation had recently increased significantly. It also emerged that companies struggle to categorise and quantify reputational risk, compliance failures are the biggest source of reputational risk. SMEs lag behind on reputational risk, The CEO is the principal guardian of corporate reputation, Good communication is vital to protecting against—and repairing—reputational damage and finally, it emerged that reputation is a prized, and highly vulnerable, corporate asset ( Economist Intelligence Unit, 2005).

The link between corporate reputation and the company’s constituencies reveals the long-term strategic value of the reputation (Matteo Tonello, 2007).

Even after the reputation of a firm has come under scrutiny, there is a problem of perpetual reputation harm, business risks could have spill over effects on the public’s perception of the company (Matteo Tonello, 2007). Companies usually address this issue through efficient PR, advertising and CSR. These influence the media and with a solid legal services usually reminding newspaper companies to be aware of what they write after they were exonerated of a crime or might find themselves in a law suit with them.

Despite the recent surge in research and interest, corporate reputation remains a highly disjointed field of study. The existing literature is primarily management-focused, and there is still very little discussion among scholars and experts (Matteo Tonello, 2007).

Corporate reputation is related to individual expectations, aspirations and needs as consumers, and to our beliefs as citizens. It describes the rational and emotional attachments that stakeholders form with a company, which is why perception is the driving force behind management success or failure (J.Lerakin, 2003).

In conclusion, the idea that any organisation’s reputation is derives from a mix of the rational and emotional attachments that stakeholders form with it. Unlike image, which is a more immediate external perception of an organisation and may be one element of reputation, reputation is built up over a longer period and is about the integrity of an organisation. It is the result of a collection of memories, perceptions and opinions, influenced by every event, contact, public statement, media reference, rumour or leak about that organisation. It is as much about impressions, beliefs and feelings as about experiences and knowledge. But perception strongly influences – or can become – reality (Turner, 2011). This is what the research is based on as it attempts to seek perceptions.

As discussed earlier on, under the headings – What has changed -the demand for CSR and social accounting is becoming prevalent among organisations; firms are now acting responsibly in relation to their major or minor stakeholders. As a result of this, reputation risk awareness is on the rise and emerging negative issues on reputation has led to introduction of image restoration framework to assist in the understanding of corporate social responsibility reporting to emphasise social accounting. Reputation was investigated using reputation lens in achieving this.

As most previous study in reputation risk has focused immensely on numerical impact despite the fact various ranking institution adopt more than financial criteria, the identifiable link is integration of financial and non-financial measures in relation to reputation risk based on target setting and their assessment.

As mentioned earlier, reputational risk depends on many areas of knowledge, ranging from Audit, PR, Corporate governance, CSR and most important, operational risks. As a result, the research limits examination of past research to closely related ones to the research topic.

It could be established, the young state of reputation risk, as few can identify and provide well-reasoned and defensible answers to questions about corporate reputation and reputational dynamics. Although corporate reputations are ubiquitous, they remain relatively understudied, as a result, awareness and management in corporations are sometimes at minimum until a reputation-threatening issue or event arises (Fombrun, 1999).

2. 13 GAPS IN THE LITERATURE

Majority of research relating to corporate reputation have been done by experts in application of theories and model. Unfortunately, these researches have not directly related with groups of stakeholders which form the foundations, reputation are made of. As a result, this research contributes to the awareness in such areas to increase the awareness and importance of reputation, not just among experts but also among the society as reputation risk is being thought of, mostly among risk managers but not among stakeholders of organisation.

The achievement of such level of awareness among people in the society will increase the input of stakeholders in society towards reputation management. Although such improvement will bring about storming at the beginning, it will eventually get to a stage of where corporate reputation will no longer be one-sided on the part of organisations and experts, but will reach a level where its integration into other areas (branding, CSR, marketing and so on) surrounding reputation will be thought of more.

Summary of chapter

This chapter has discussed the core part of reputation management under important headings for better insight. It has also discussed some researches in the subject area and identification of the malign aspect this research could endeavour to add to the field of knowledge in that area. The methods of going about the research are discussed in the next chapter.

CHAPTER 3: RESEARCH DESIGN AND METHODOLOGY

3. 01 INTRODUCTION

This chapter explains the research methodology used in this research. An overview of the approach is presented and the theoretical foundation of this study. The research design and the method of data collection are explained including detail of implementation method for the population and sample selection and size. Also the web based survey used, the response rate, data analysis adopted and the testing and the validity and data testing were also discussed.

3.02 APPROACH TO RESEARCH STUDY

This research attempted the problem statement after establishing the theoretical framework, selecting a research design, data collection means to be used, implementation of the data collection and data analysis.

Theoretical framework

The sets of literature discussed in chapter two were used to buttress the concept of both risk management of reputation and to provide detail understanding on corporate reputation, this is so far a descriptive study. The research could move further to the stage to test the hypotheses coming up from the literature using quantitative results from questionnaire results to verify the hypotheses.

3.03 Research design

A web questionnaire survey was adopted in order to seek perception on factors relating to organisational reputation which can affect its performance.

The questionnaire was chosen as it was the only reasonable, convenient and cheap means to collect data as part of the gap, reputation risk literature needs to uncover. Collection of data from respondents, who are at least 16 years (Larkin, 2003) in support of the idea of similar public opinion done in the past as well as them possessing university degree level of education as majority of respondents are from the researcher’s university in consideration that the questions would have been easy to understand and convenient to respond. The respondents to the questionnaire, with their identity unknown could have helped increase the accuracy of information provided in the survey.

The researcher used a web based survey as it yield high response rate in comparison to paper based questionnaire. The problematic part is that finding and selecting a reasonable representative sample area.

3.04 Data collection method

The questionnaire involves qualitative and quantitative aspects to provide detailed information, although the qualitative response is less useful for the hypotheses testing of variables as it is usually generalised ideas in an attempt to answer the generalisation part of the research questions.

The quantitative means is well structured to allow the research a better insight of the study. Although the research attempt testing the hypothesis via a generalised set of findings which are useful for statistical analysis which is fairly reliable. As a result the concentration of quantitative aspect of the questionnaire being focused on

The quantitative method was adopted in support of theoretical foundation identified in the research. Moreover, qualitative aspect of the questionnaire helped to gather additional information from respondents to strengthen the opinions given in the questionnaire.

3.05 Implementation

The population in the research is identifiable based on the objectives and problem in the research. The population available for the researcher were the general public, some of which the researcher encounters in his past dealings. Most of the population are not personally known to the researcher and respondents’ identification is unknown or not provided in the course of the data collection process. Collecting data from all these people would have been very difficult, inefficient and time consuming. For this reason, the reason, the sample of the research was not restricted, but it was an attempt to ensure reasonable response would be received.

3.06 Sampling frame

The sampling frame was focused on adults whom the researcher believes could have known directly or indirectly the issues raised in the questionnaire.

3.07 Sample size

As mentioned earlier, sample size in the research was not a fixed one. It was difficult to ascertain a perfect one considering the time and resources at the disposal of the researcher. The response rate was very low (19%).

The sample chosen included approximately 200 phone contacts, 200 e-mail contacts and another 200 social network contacts.

3.08 Questionnaire development

One of the major tasks of researches or in a dissertation is the development of questions which integrate the purpose of the research. In order to achieve a reasonable good questionnaire, careful wording of the questions in clear simple and straightforward is required of the researcher.

Questionnaire by past researchers in the reputation management field of study gave some insight into developing the one used for this research. Most importantly, the focus to achieve the research theoretical framework was focussed on,

The questionnaire developed in this research consisted of 5 sections: Section One – Employees, Section Two – Investor (shareholder), Section Three – Pressure groups Section Four – Consumers and Section Five – About you section:

Section One – Employees

This area of the questionnaire focused on the relationship of an organisation employee based on the reputation of the employer.

Section Two – Investor (shareholder)

Shareholders are considered the most relevant stakeholders of an organisation as they were deemed the owners of the business since they are the one that put their monetary resource into the business in expectancy of returns, profit or appreciation of the investment. As they consider so many aspects of a business before investing in a business, the research attempted to seek the insight on their investment based on reputation risks. This is the focus of the questionnaire, with the belief that respondents position being assumed as this group will provide criteria exhibiting the relationship based on reputation.

Section Three – Pressure groups

The increase in pressures from peripheral group calling for claims secondary to organisational objectives can impact on reputation as discussed in the second chapter of this research. The researcher seeks to identify among respondents of the questionnaire, the relationship on the pressure groups they tend to support and the reputation of the organisation.

Section Four – Consumer

Consumers are deemed to be a major stakeholder of an organisation and as mentioned under the literature in second chapter, there are have been positive relationship between efficient reputation risk management and consumers. The research seeks to confirm this relationship.

Section Five – About you

The section analyses the qualitative aspect of the research focussing on the bringing out level of interest of respondents to reputation matters in organisation.

Respondents were asked questions to rate statement on a five point Likert scale on each section, taking the position of the stakeholders for each section, the research focused on. The scale ranged from 1 to 5 with 1 = Very likely. 2 = likely, 3 = Not sure/May be, 4 = unlikely and 5 = very unlikely.

3.09 Pilot testing

In order to ensure the feasibility of the questionnaire, the pilot testing on the questionnaire was checking by lecturers at the university. The researcher sought questions on the length and the sequence of questions. The feedback given was the rectification wordings of the questionnaire to improve its outlook.

After alterations, the questionnaire was e-mailed to the researcher e-mail contacts; phone sent to phone contacts as text message and posted on social network friends with notice (Facebook). A total of 114 respondents filled the questionnaire, a response rate of 19%.

Researchers supported that approximate 7% of sample is required (Sapford R, 2006). Therefore, the respondents were enough to conduct the reliability test. The chi square was adopted to verify the hypotheses of the research.

3.1 Web based survey

The email containing the URL link of the online survey was mailed to 200 contacts on contacts on the research e-mail, another 200 to Facebook friends and the last 200 to contacts on the phone.

The content of the information sent explained the purpose of the research and the tope it relates with suggestions to pass on the URL link to friends and relatives

3. 11 Response rate improvement

The researcher attempted to increase the response rate by sending a reminder to all contact after two weeks which yield a better response as response increase from 62 to 114.

A total of 89 (78.1%) 89/114 questionnaire were fully completed returned. All questionnaire filled were considered as part of the analysis. Skipped questions were not used as part of the analysis.

3.12 Analysis of data.

The four sections focussed on in this research are undoubtedly groups considered when reputation levels are considered by expert, which verifies their importance and verification as part the research objectives.

Each of the research variables were measured by a set of statements covering all dimensions of a variable. These statements were demonstrated in the form of questionnaire that was distributed to respondents.

The statements were weighted individually, depending on the importance of each within a five point Likert scale:

1 refers to Very likely or very unlikely

5 refer to very unlikely /very likely, depending on the positivity/ negativity of the question in relation to the research objectives.

The research questions was regrouped under the major independent variables and tested whether the hypothesis should be rejected or accepted, using chi square statistics analysis tool on Microsoft Excel.

Although previous researchers considers the major independent variables in similar research to this research but this wouldn’t be feasible within the time and resources at the disposal of the researcher. As a result in pursuit of testing of the research hypothesis and research questions, the researcher has tested the minor independent variable to confirm this.

3.13 Validity and Reliability

Validity focuses on whether findings are about what they seem to be. Questionnaire being distributed to individuals who are definitely be one the stakeholders of an organisation assures the validity of the findings in the research (R Sapford, 2006).

Reliability is about the extent to which the measurement results can produce consistently. Reliability of data could be threatened by the participant error because of not taking time to complete the questionnaire carefully, and not being honest(R Sapford, 2006).

The research methodology is a well structured questionnaire that needs to be answered upon the existence of the facts mentioned in the questionnaire and doesn’t need any opinions that are affected by the time manner which leads to reliable findings. The methodology is suitable to collect data and for good analysis on a quantitative basis.

It has to be said that integrating theory and research findings into a perspective for better business practices is a difficult task that requires cross fertilisation of ideas from several disciples (Keith Weigelt, 1988). The researcher hoped that the research would have achieves some reasonable conclusion at the end of the research.

3.14 PROBLEM DEFINITION

Corporate reputation of an organisation influences its objectives, which it uses to gauge its organisational performance. The constituents of reputation could have negative impact on an organisation. Stakeholders of an organisation are numerous, and understanding their perception is a quality inputs in assessing level of reputation. It is therefore essential to acknowledge managing corporate reputation from all fronts of its stakeholders. The researcher considers the existence of different groups of stakeholders of an organisation based on sample selected along with their decisions in situations which go along their perspective on organisation reputation.

3.15 RESEARCH OBJECTIVE

The objective of this research is to assess the effects of reputation risks on perspectives of organisational stakeholders which could influence performance of entities. It also aims to provide an understanding of the structure and requirements of implementing effective reputation management in consistent with recent knowledge in this area.

3.16 DEPENDENT VARIABLE

Corporate Reputation

3.17 INDEPENDENT VARIABLE (Major)

Shareholders

Employees

Customers

Pressure groups

Regulators

3.18 MINOR INDEPENDENT VARIABLES

Investment and Share price

Employee Productivity

Media

Social Responsibility

Product Performance

Regulation infringement penalty

3.19 RESEARCH QUESTION AND HYPOTHESES

Research Questions

Is there a relationship between corporate reputation and performance What are the effects of corporate reputation on organizational performance Can these findings be generalized

3.2 Hypothesis

Null hypothesis: The level of reputation risks is not directly related to organisational performance.

Alternate hypothesis: The level of reputation risks is directly related to organisational performance.

3.21 DATA COLLECTION INSTRUMENT AND SOURCE

The use of web-based survey by survey monkey, a renowned survey organisation was used. The questions frame was already available and the research manipulated the template to the structure shown in the appendix.

3.22 ETHICAL CONSIDERATION

Only one resource used in this research insisted on permission to be taken, before it is quoted. The researcher contacted the author via e-mail who later gave permission. All other materials permit usage as long as it is referenced and the not full resource is reproduced. The researcher endeavour these are complied with.

3.23 DATA ANALYSIS METHOD

Test of hypothesis

In order to formulate research question and making a platform for testing fact of the statement, the related assumptions to the statement was put forward. The statement was believed to be true, which form as a basis for argument, but has not been proved.

Setting up and testing statement of hypothesis, the objective of this research is to assess the effects of reputation risks on perspectives of organisational stakeholders which could influence performance of entities. This forms an essential part of statistical inference for the study.

3.24 Statement of Hypothesis

Null hypothesis: The level of reputation risks is not directly related to organisational performance.

Alternate hypothesis: The level of reputation risks is directly related to organisational performance.

A chi square test statistics was run on Microsoft excel based on the data extract for analysis. This is done in order to establish testing whether observed data are representative of a particular distribution and identify consistency of results, which provide a platform upon which conclusions reached were made. This includes t-Test of chi square using contingency table with Yate correction at 5% significant level to the statement of hypothesis.

Formula= ? (O – E)2

E

Where O = Observation Frequency

E = Expected Frequency

This is discussed in depth in the next chapter along the results of the survey.

Summary of chapter

Based on the literature review in the previous chapter, this chapter discussed the methods to be used in this research. Sample issues and others areas of the theoretical framework like the research propositions and hypothesis of the research were presented. The next chapter exhibits the research findings and discuss in depth statistical analysis the research hypotheses were tested on.

CHAPTER 4: DATA ANALYSIS AND FINDINGS AND DISCUSSION

4.01 INTRODUCTION:

This chapter presents the results of this research survey. It describes the respondents, addresses reliability of respondents and response time. It also presents research hypotheses analysis result and the general conclusion gathered from this survey.

4.02 RESPONSE RATE AND RESPONSE TIME

The response rate was 19% out of questionnaires sent in four weeks

4.03 Characteristics of respondents

The study focused on the general public where an unrestricted sample is focused. A URL link of the web-based questionnaire was emailed to 600 individuals. About 5% were not received or returned by the proposed contacts which reduced the sample further. A total 114 questionnaire was filled. This resulted to 20.7% (114/550). This included the follow-up with reminder of e-mails and texts which increased the number of respondents. The results (descriptive statistics) of this study was analysed by survey monkey website and the rest through the use Microsoft Excel and Inferential Statistics website.

4.04 QUESTIONNAIRE REPORTS – TABLES AND GRAPHS

The following are the information on the questionnaire and the responses:

Section One – Employees

Q1. Will you aspire to work for a company with damaged reputation?

Very UnlikelyUnlikelyMay beLikelyVery LikelyAverage Rating A company operations represents its reputation. 2.0% (2)8.8% (9)15.7%(16)

50.0%(51)

23.5%(24)

3.84

Section Five – About you

13. Please rate the strength of your answers in order of importance to you: (note 1 means most important and 5 least important.)

54321Average Rating Pressure group group22.2%(20)

23.3%(2116.7%(15)

25.6%(23)

12.2% 2.82 Investor

16.7%(15)32.2%(29)

28.9%(26)

11.1%(10)

11.1%(10)

2.68 Employees 10.0% (9)16.7%(15)

43.3%(39)

18.9%(17)

11.1%(10)

3.04 Consumers 24.4%(22)

22.2%(20)

5.6% (5)37.8%(34)

10.0% (9)2.87 Equal priority26.7%(24)5.6% (5)5.6% (5)6.7% (6)55.6%(50)

3.59

14. Please state the closest match to your role in your organisation:

ResponsePercentResponseCount

Floor member.33.3%30 Supervisor37.8%34 Departmental/ Branch Head21.1%19421.1%19 Board Member3.3%3 CEO/ Chairperson 4.4%4

15. In your own words, please state your occupation, industry and your view on the research topic – the impact of reputational risk on a company. (Optional)

Response Count =34

Answered question= 34

Skipped question=80

ANALYSIS

The researcher took a positive view towards the research questions and responses of respondents.

The last section was mainly used to identify characteristics of respondents as well gain an insight through additional information provided by respondents.

The researcher provided definite values to mid answers depending on the approach of the questionnaire being it positive or negative questions requiring same perception of reputation in support of the research.

Questions widely agreed to enhance reputation, hence organisational performance are given the ‘yes’ value while the ‘no’ is given to questions exhibiting practices accepted widely, coulddamage corporate reputation and organisation performance.

The following is the aggregation of results towards the statistics analysis of chi square in verification of the research hypothesis.

It is up to the researcher to either eliminate or include mid-point responses or exclude them (R. Sapsford, 2006). Skipped questions were not included in the analysis as part of efficient data management process in support of reliability and validity.

Section One – Employees

Will you aspire to work for a company with damaged reputation Very UnlikelyUnlikelyMay beLikelyVery LikelyAverage Rating I will work.36.8%(42)24.6%(28)

28.1%(32)5.3% (6)5.3% (6) 2.18

Results summary:

Yes = 70

No plus Midpoint = 44

2. Does working for a company say something of employees’ reputation?

Very UnlikelyUnlikelyMay beLikelyVery LikelyAverage Rating Yes, it does say something of their reputation.2.6% (3) 9.6% (11)23.7%(27)

40.4%(46)

23.7%(27)

3.73

Results summary:

Yes +Midpoint = 100

No = 14

3. Does a company reputation affect performance of employees?

Very UnlikelyUnlikelyMay beLikelyVery LikelyAverage Rating Performance is influenced due to reputation of employer.2.6% (3) 6.1% (7)20.2%(23)

47.4%(54)

23.7%(27)

3.83

Results summary:

Yes + Midpoint = 104

No =10

Section Two – Investor (shareholder)

4. By how much will you prefer your investment in a company of damaged reputation?

Very UnlikelyUnlikelyNot sureLikelyVery LikelyAverage Rating I will invest anywhere, reputation is nothing.52.8%(57)

28.7%(31)

12.0%(13)

5.6%(6)

0.9% (1)4.27

Answered question 108

Skipped question 6

Results summary:

Yes = 88

No +Midpoint = 19

Question 5 Does how much returns on your investment says how reputable (Highly regarded) a company is?

Very UnlikelyUnlikelyMay beLikelyVery LikelyAverage Rating Returns means high reputation6.7% (7) 11.5%(12)

32.7%(34)

33.7%(35)

15.4%(16)

3.39

Answered question 104

skipped question 10

Results summary:

Yes +Midpoint = 85

No = 19

Q6. Corporate social responsibility(CSR) is the consideration of a company, regarding needs and interests of others who may be affected by its decisions, looking beyond economic and technical(official) interests (Carroll, 1999). For examples, pollution control, non-animal testing, recycling, etcetera.

Will you invest in a firm with bad reputation towards corporate social responsibility (CSR)?

Very UnlikelyUnlikelyMay beLikelyVery LikelyAverage Rating CSR is not important. 32.1%(34)

34.9%(37)

23.6%(25)

6.6% (7)2.8% (3)3.87

Answered question=106

Skipped question=8

Results summary:

Yes = 71

No +Midpoint = 35

Section Three – pressure groups

7. Does a company supporting your interest poses to you as having good reputation?

Very UnlikelyUnlikelyMay beLikelyVery LikelyAverage Rating Yes, supporting my interest enhances company’s reputation. 6.9% (7) 11.8%(12)

31.4%(32)

43.1%(44)

6.9% (7)3.31

Answered question102

Skipped question12

Results summary: Yes +Midpoint = 83

No = 19

8. Will you be motivated to pressurise regulators (governments) to favour or impede a company with poor/high CSR activities?

Very UnlikelyUnlikelyMay beLikelyVery LikelyAverage Rating I will make effort to support my interest like pressure groups. 2.0% (2)

17.6%(18)

31.4%(32)

48.0%(49)

1.0% (1)3.28

Answered question102

Skipped question12

Results summary:

Yes +Midpoint = 82

No =20

9. Does how a firm operates in relation to the community and environment represent its level of reputation?

Very UnlikelyUnlikelyNot sureLikelyVery LikelyAverage Rating Public relations dictates reputation 1.0% (1) 9.8% (10) 17.6% (18) 43.1%(44)

28.4%(29)

3.88

Answered question102

Skipped question12

Results summary:

Yes = 72

No + Midpoint = 29

Section Four – Consumers

10. Will you be inclined to buy products of a company with product-related reputational issues?

Very UnlikelyUnlikelyMay beLikelyVery LikelyAverage Rating I will be inclined to buy products ofa company with product-related reputational issues?

17.6%(18)

36.3%(37)

23.5%(24)

17.6%(18)

4.9% (5)3.44

Answered question102

Skipped question12

Results summary:

Interpreted as:

Yes +Midpoint = 55

No = 47

Q11. Do media reports on a company influence the attractiveness (view) of the company or its products?

Very UnlikelyUnlikelyMay beLikelyVery LikelyAverage Rating Media reports do influence my purchase.4.9% (5)6.9% (7) 15.7%(16)

43.1%(44)

29.4%(30)

3.85

Answered question102

Skipped question12

Results summary:

Interpreted as:

Yes +Midpoint = 90

No = 12

Q12. Does how a firm provide its products and services represent its level of reputation?

Very UnlikelyUnlikelyMay beLikelyVery LikelyAverage Rating A company operations represents its reputation. 2.0% (2)8.8% (9)15.7%(16)

50.0%(51)

23.5%(24)

3.84

Answered question102

Skipped question12

Results summary:

Yes = 91

No +Midpoint11

Aggregate results from the above come down to:

AnswerEmployeesShareholdersPressure groupsConsumers Yes70+100+104=27488+85+71=24483+82+72 =23755+90+91=236 No44+14+10=6819+19+35=7319+20+29=6847+12+11=70

These above figures totalled below was used in the second part chi square analysis, discussed in below:

EmployeesShareholdersPressure groupsConsumers Yes274244237236 No68736870

4.05 Test Statistics

The test statistics below are quantity calculated from our sample of data extracted based on the period under study. The value was used to decide whether or not the null hypothesis should be rejected in our hypothesis test. The choice of a test statistic was dependent on the assumed probability model and the hypotheses under question.

A chi square test statistics was run on Microsoft excel based on the data extract for analysis. This is done in order to establish testing whether observed data are representative of a particular distribution and identify consistency of results, which provide a platform upon which conclusions reached were made. This includes t-Test of chi square using contingency table with Yate correction at 5% significant level to the statement of hypothesis.

Formula= ? (O – E)2

E

Where O = Observation Frequency

E = Expected Frequency

Output results of Test Statistics

CHI SQUARE TABLE CALCULATION QuestionsOE(O-)^2/EOE(O-E)^2/ETTAL 1

10

15.50924

1.957009345

81

75.49076

0.4020589

91

2

19

11.930185

4.189565184

51

58.069815

0.8607275

70

3

20

11.930185

5.458584116

50

58.069815

1.1214418

70

4

11

14.316222

0.768172426

73

69.683778

0.1578176

84

5

12

14.657084

0.481684917

74

71.342916

0.09896

86

6

11

14.657084

0.912477857

75

71.342916

0.1874645

86

83

83

13.76749384

404

404

2.8284703

487

The result shows that t-stat has same figure of 16.596 by summation of square of difference of observations and expected values divided by expected values. The test statistics for this method fall outside the critical region based 5% level of significance.

Based on the contingency table used for calculating t-stat, the degree of freedom is 5 and the critical value is 11.07. This is extracted from statistical table for chi square with the consideration of 5% significance level and degree of freedom.

The critical value for the hypothesis test had depended on the significance level at which the test is carried out, and using one sided test of significance. The critical value(s) for a hypothesis test is a threshold to which the value of the test statistic in a sample is compared to determine whether or not the null hypothesis is rejected. (Easton and Mc Coll, 1997)

I had to make the significance level to be as small as possible in order to protect the null hypothesis and to prevent, as far as possible. The significance level was chosen to be 0.05 (or equivalently, 5%).

Rule of critical region for testing hypothesis

The sample space (critical region) for the test statistic is partitioned into two regions; one region (the critical region) will lead us to reject the null hypothesis H0, the other will not. So, if the observed value of the test statistic is a member of the critical region, we conclude “Reject H0”; if it is not a member of the critical region then we conclude “Do not reject H0”. (Easton and Mc Coll, 1997)

4.06 DATA ANALYSIS – The other trial

It was also attempted using aggregate of results from the results as shown in the other in next chapter using Microsoft excel with consideration of most questions from questionnaire except the last section which was considered as the qualitative aspects of the questionnaire.

The following is the results:

ObservedEmployeesShareholdersPressure groupsConsumersTotals Yes274

244

237

236

991

No68

73

68

70

279

342

317

305

306

1270

Chi squareExpected 267

247

238

239

75

70

67

67

2.97242827

The same observed figure was also inserted on the automatic inferential statistics tool.

Below is the result:

B1

B2

B3

B4

B5

Totals

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ResetCalculate

Chi-Square

df

P

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Cramer’s V =

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Percentage deviations

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Standardized Residuals B1

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Lambda for predictingStandard Error

.95 CI Limits

Lower

Upper

A from B:

B from A:

Estimated Probability of Correct Prediction

when Predicting: A without knowledge of B

A from B

B without knowledge of A

B from A

Comments on the figures – Source: Inferential Statistics website (http://faculty.vassar.edu/lowry/newcs.html)

Percentage deviation and standardized residual are both measures of the degree to which an observed chi-square cell frequency differs from the value that would be expected on the basis of the null hypotheses

For each cell, percentage deviation is calculated as

Xxx

observed — expected

expected

x 100

Thus, a percentage deviation of +15% within a cell indicates that the observed frequency is 15% greater than the expected; while a percentage deviation of -15% indicates that the observed frequency is 15% smaller than the expected.

In the special case of df=1, the calculation of percentage deviation incorporates a correction for continuity’s

Xxx

|observed — expected| —0.5

expected

x 100

The resulting value is then given a positive sign if observed>expected and a negative sign if observed

The standardized residual for a cell in a chi-square table is a version of the standard normal deviate, z, calculated as

Xxx

z =

observed — expected

sqrt[expected]

In the special case of df=1, the calculation of the standardized residual incorporates a correction for continuity:Q

Xxx

z =

|observed — expected| —0.5

sqrt[expected]

The resulting value of z is then given a positive sign if observed>expected and a negative sign if observed

The chi-square value that results from a chi-square analysis is equal to the sum of the squares of the standardized residuals.

Assuming the null hypothesis to be true, and providing that the expected value for a cell is at least 5, values of the standardized residual belong to a normally distributed sampling distribution with a mean of zero and a standard deviation of ±1.0.

Source: Inferential Statistics website – (http://faculty.vassar.edu/lowry/newcs.html)

In addition to the above, the following comment is also quoted:

The higher the chi squared value, the more significant the difference between proportions for a given table size (which is what the df is about). The important figure is not the chi squared itself, but p, the probability that the groups are really from the same population.

The p figure of <0.0001 means less than one chance in 10,000. That’s a very high level of certainty. Most analysts don’t consider a result worth bothering about unless the p figure is less than .05. We often use a criterion of .01, to avoid getting excited about too many false positives. When the p figure is less than .01, it shows there’s a very low chance that the two groups are really the same. But it doesn’t necessarily mean there’s a strong relationship between the groups, because it the sample size is large enough, even the tiniest difference can be statistically significant. If you want to look at the size of the difference, it’s better to use a measure like Cramer’s V, which the Vassar page above calculates at the same time as chi squared. So chi squared measures whether two (or more) sets of figures are really different, while Cramer’s V measures how different they are.

Source: Audience dialogue – http://www.audiencedialogue.net/excel5.html

In conclusion, since chi squared figures in the versions are small 2.9 and 1.24 and the p value being 0.7434 more than 0.1, is an evidence the groups have a higher chance of being the same.

Finally, the null is not accepted and the test hypothesis is accepted.

Conclusion from the test of hypothesis

Based on the result from the first calculated test statistics and the rule for determining whether to accept or reject the null hypothesis, it is clear that the null hypothesis is true and should not be rejected. This exhibit that The level of reputation risks is not directly related to organisational performance as shown the first chi calculation and that the alternative hypothesis should be rejected.

However, the remaining aspects of the statistics, which consider the whole sample shows relatively low chi square meaning that on the result from the calculated test statistics and the rule for determining whether to accept or reject the null hypothesis, it is clear that the null hypothesis is not accepted. This means that the level of reputation risks is directly related to organisational performance that the alternative hypothesis should be accepted.

4.08 Summary of chapter

This chapter has presented the results from the survey conducted on the sample of the research. The analysis results reveal that there was a significant perception that organizations reputation will be at risk when they do not administer issues of perception with their stakeholders.

It also revealed that all stakeholders are important and organization should consider the right balance at all times. The research moves on to the last chapter which discusses other issues from the results along with some recommendations.

CHAPTER 5: CONCLUSION AND RECOMMENDATIONS

5.1 INTRODUCTION

This chapter provide a summary of this research, its conclusion, some recommendation for further research and a brief evaluation.

The basic confirmation of the research results is that reputation declines when experience of an organisation falls short of expectation ( Economist Intelligence Unit, 2005).

In an attempt to remove doubt on the methodology adopted in this survey, It is important to state that reputation surveys is well regarded in business publications and are commonly seen to provide a good sense of which corporations are admired by opinion formers and management peer groups(Larkin, 2003). This is a justification for the use of survey in this research.

5.2 A brief Summary of the research

In the field of risk management, various researches have been conducted dealing with measurement and management risks. The same applies to reputational risk, as part of the enterprise risk management of an organisation. A number of researches has confirmed that efficient of all sort to of risks ensure reduced losses. However, reputation, highlighted as risks of risks (Economic Intelligence unit, 2005) has limited research in integration of reputation risk into the Enterprise risk management.

As discussed earlier that reputational risk being difficult to measure and quantified should be focused on more with high level of awareness, this is not the case.

The research takes approach through the input it adopted in its questionnaire of seeking the perception of the public on reputation. The lack of this approach by governmental institutions, profit and non-profit oriented organisation in jointly seeking the overall perception of all its stakeholders which prompt this research aiming for the objectives:

To assess the effects of reputation risks on perspectives of organisational stakeholders who could influence performance of entities

It aim to provide an understanding of the structure and requirements of implementing effective reputation management in consistent with recent knowledge in this area.

These objectives are attempted through the following questions:

Is there a relationship between corporate reputation and performance What are the effects of corporate reputation of on organizational performance Can these findings be generalized

600 questionnaires were sent via URL link from survey monkey to respondent which yield 114 (19%) response. Descriptive and inferential statistics were done on the questionnaires after assurance on the reliability and validity of the sample.

The statistics aspect tested the following hypotheses:

Null hypothesis: The level of reputation risks is not directly related to organisational performance.

Alternate hypothesis the level of reputation risks is directly related to organisational performance.

It was reached that the null hypotheses is not accepted and alternative hypothesis being accepted which is translated as significant of difference among variables is quite low. A further analysis of the data could be said to reveal the response to research questions.

5.03 CONCLUSION – ANSWERS TO RESEARCH QUESTIONS

As every organisation is considered as systems consisting of people products, processes, culture etc that interacts to produce synergies by employing a set of functions and activities to achieve its goals and objectives. This is supported by the various sections of the questionnaire bringing up mostly positive answers, meaning every stakeholders of an organisation is important as they all their perception.

As reputational risk continue to pose a difficult aspect to risk management despite it being accepted as being difficult to quantify including the impacts, its mismanagement could lead to. There is no standard framework of measuring and managing reputational risk despite its influence on organisation performance, meaning that organisation will once again consider all aspects of its business as part of its Enterprise risk management.

Performance measurement of a firm is deemed too shallow if being done based only on financial aspects and as a result of the process being done along with adoption qualitative measures, the researcher has attempted to find out the level of perception of stakeholders influence on organisational objectives through different sections of the questionnaire relating to various aspects of an organisation.

A question comes up is: what is the right balance of managing them to trigger positive reaction from them based on what they perceive of an organisationThis is an area beyond the research, suggested to organisations to constantly seek and for further research.

Furthermore, the pressure to generate short-term financial returns placed upon companies by some shareholders requires financial research analysts to weigh against fundamental choices about the type of recognition the company wants to receive from present and future generations.

Strengthening or cultivating relationship with all stakeholders might be impossible. This poses to organisations to realize the challenge and strategic opportunity of corporate reputation could pose to them. This could be addressed through an efficient reputation risk management that help achieve enhancing its relations with those stakeholders whose support is crucial to the business in the pursuit of long term objectives. This research support this that organisation should consider all stakeholders.

The research calls for organisation to analyse and approach the organisation reputation via a comprehensive analysis of the business constituencies and ensure that the organization does not neglect its key stakeholder relations. The concept of corporate reputation is about considering a comprehensive analysis of the firm’s stakeholder base. Corporate reputation oversight represents a formidable strategic opportunity to strengthen stakeholders’ relations that pertain to the company’s long term business objectives.

“Reputation” is the perception of the corporation by the public, and it is a function of triggering events that reveal to the public a previously unknown corporate practice or a new fact regarding products and services sold by the firm (Matteo Tonello, 2007). The fact that there is no triggering events (good or bad) as part of the issues considered bring up the situation that respondents could have behaved differently in filling up the questionnaire and decrease the value of conclusion revealed by the analysis. This also suggests an area of reputation risk research analyst should consider.

Furthermore, corporate reputation affects stakeholders’ inclination to be engaged with a certain company (through a supply relationship, a customer relationship, an employment relationship) and a company’s public support in times of crisis (Matteo Tonello, 2007).

Since reputation is subject to changes in perception by a variety of stakeholders, corporate reputation is a vibrant concept likely to be difficult to capture. Another diminishing issue to this research issue.

For instance, news on a company may be judged differently by different stakeholders (individuals or institutions), according to their moral values, business culture and relationship with the firm (Matteo Tonello, 2007). For this reason, expectations can shift, thus the different perception of different category of respondents in the questionnaire, which combine the aggregate perceptions of these interested groups on an organisation.

Although there is a rationale for prioritizing stakeholder relations with selected relations being instrumental in achieving the company’s long objectives, this can bring up reputational damage on the part of some stakeholders. The research calls the attention of organisation to be aware of avoiding this situation.

In order to arrive at a strong position of opinion variables in research needs to understand the nature of reputation risk as an effect of certain business operational incidents, not as a separate and distinct category of uncertainties (Matteo Tonello, 2007) – A diminishing factor on the quality of response in the research.

It was also stated,(Matteo Tonello, 2007) that directors should consider support the establishment of a dedicated organizational platform to address reputation risk, as it would conflict with current risk management integration best practices and retard the development of a full-fledged enterprise risk management (ERM) program. This shows the dynamism of reputation risk as being difficult to manage, hence the research in this area.

In the real world, assuming a focus on an organisation or industry, a path of the research suggested for the future, the answers to the questionnaire would create new challenges for the management of the organisation or industry, if at a time, the results of this research questionnaire is the state of its four groups stakeholders as identified in the questionnaire

5.04 GENERALISATION

The study results are generalised, meaning it is applicable to other research within the same realm of knowledge as the sample was selected from different groups of the members of the public. Apart from the low response and the ratio of respondents in comparison to the population, which brings up concern of extent, the findings could be generalised as a basis of research in reputational studies.

5.05 RECOMMENDATIONS AND SUGGESTIONS FOR FURTHER RESEARCH

A case study approach on an organisation or industry would have provided better insight into the research.

The use of sophisticated research tools like the SPSS package would have even provided better analysis opportunity of the data.

Organisations must endeavour to embed reputation risk into ERM could lead to inefficiencies and disparities in the company’s response to risk events; in addition, it could undermine the firm’s ability to foster a cohesive culture of risk awareness.

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