Introduction

In this article I try to emphasize the role of communication for corporate reputation. As I describe below, a number of transformations have contributed to reputation depending on the perception of different stakeholders and audiences. Today, this collaboratively achieved corporate reputation is associated with the interdependence between organizations and stakeholders.

Corporate communication

Communicating well and assertively is a skill required of leaders, managers and organizations. Corporate communication is a strategic factor for companies. Notably, in a volatile context of great uncertainty and ambiguity, it is essential that the company communicates its purpose well and acts in accordance with it.

According to the report “Trends in reputation and intangibles management”, “Approaching the Future 2023”, the factors that have gained the most importance on the business agenda are: sustainability, Environment, Social, and Governance (ESG), responsible leadership, reputation and corporate communication. This result suggests that companies can be seen as social, responsible and transformational agents. In Latin American organizations, the most remembered trend is communication, followed by reputation and corporate purpose (Corporate Excellence, 2023, https://www.corporateexcellence.org/).

Communication and corporate reputation

Conceptually, stakeholder theory (Freeman, 1984) points to two-way communication between organizations and their internal and internal interest groups. It reveals that the company’s responsibility is not restricted to responding to the interests of shareholders. This theory marks a marked concern with corporate responsibility, going beyond maximizing results. However, a challenge for companies is to reconcile responsibility, purpose and economic results (Ferrero, 2021).

With the digital transformation, globalization and changes in business, corporate communication is no longer a vertical, centralized and inflexible process, but a networked, decentralized communication with various information flows. This reality means that corporate reputation depends on the judgment of stakeholders. As a result, reputation management has become more complex. This makes communication a key element in building reputation, generating trust and achieving social legitimacy in order to operate.

With regard to a definition of organizational reputation, the literature review carried out by Lange, Lee and Dai (2011) identifies three dominant concepts. The first defines reputation as familiarity with the organization; the second consists of beliefs about what to expect from the organization in the future; and the third refers to impressions about the organization’s favorability.

Recovering corporate reputation

Bearing in mind that reputation is an institutional image that lasts over time, we can say that it is the result not only of what the company says or reports, but also of what the company does. An emblematic attempt to recover corporate reputation is that of the Brazilian mining company Vale S.A., following the disaster in the municipality of Brumadinho, Minas Gerais. In particular, the company’s efforts to respond to the environmental tragedy in 2019(see the analysis of the case here).

The case of Vale S.A. illustrates how corporate reputation is an asset that is sensitive to what happens to its various stakeholders. It also highlights that preventive reputation management is a more assertive corporate practice than remedying its loss. Notably, the case suggests that a crisis of this magnitude influences the organization’s purpose for the coming years. As noted, some substantive environmental responses positively affect reputation (Truong, Mazloomi, & Berrone, 2021).

In conclusion, corporate communication is essential for management, especially when it involves crises and demands from stakeholders. For corporate reputation, it is an essential practice for achieving the organizational purpose. Finally, there must be consistency between what is communicated and what is done. This reputation guided by integrity tends to be beneficial for the company and for society.

References

Corporate Excellence (2023). Approaching the Future 2023. Trends in reputation and intangibles management . Center for Reputation Leadership & CANVAS Sustainable Strategies. Retrieved from <https://www.corporateexcellence.org/ >

Ferrero, I. (2021). Ethics of economic and business activity. Pamplona, Spain: EUNSA.

Freeman, R. E. (1984). Strategic management: a stakeholder approach. Boston: Pitman (Pitman series in business and public policy).

Lange, D., Lee, P. M., & Dai, Y. (2011). Organizational Reputation: A Review. Journal of Management, 37(1), 153-184. https://doi.org/10.1177/0149206310390963

Truong, Y., Mazloomi, H., & Berrone, P. (2021). Understanding the impact of symbolic and substantive environmental actions on organizational reputation. Industrial Marketing Management, 92, 307-320. https://doi.org/10.1016/j.indmarman.2020.05.006