A company's reputation is the public perception of the company and its operation. This includes the public's opinions about the company's products or services or about the way the company treats its employees. Reputation can be positive or negative, and it can change over time. Executives know the importance of the reputation of their companies.
Companies with a strong and positive reputation attract better people. They are perceived to offer more value, which often allows them to charge a premium. Your customers are more loyal and buy wider ranges of products and services. Because the market believes that these companies will generate sustained profits and future growth, they have price-benefit multiples and higher market values and lower capital costs.
In addition, in an economy where between 70 and 80% of market value comes from intangible assets that are difficult to assess, such as brand value, intellectual capital and good will, organizations are especially vulnerable to anything that damages their reputation. Your reputation depends on how people perceive your business. All correspondence, whether it's emails, letters, voicemails, or any other method of communication, should always be polite, informative, professional and grammatically correct. However, most companies do not properly manage their reputation in general and the risks to their reputation in particular.
In addition, companies with a strong and positive reputation attract better talent and are perceived to offer more value in their products and services, often allowing them to charge a premium. Regulators, industry groups, consultants and individual companies have developed guidelines developed over the years to assess and manage risks in a wide range of areas, from commodity prices to control systems, supply chains, political instability and natural disasters. While most well-managed companies conduct these types of surveys, few take the additional step of considering whether the data suggests that the gap between reputation and reality is materializing or widening. This level of importance and high risk means that companies must be very attentive to what drives the company's reputation.
Regulators, industry groups, consultants and individual companies have developed guidelines developed over the years to assess and manage risks in a wide range of areas, from commodity prices to natural disasters. This process will help managers to better assess existing and potential threats to the reputation of their companies and to decide whether to accept a particular risk or take steps to avoid or mitigate it. Contingency plans for crisis management are the closest thing that most large and medium-sized companies are to managing reputational risk. Given this lack of common standards, even sophisticated companies have only a fuzzy idea of how to manage reputational risk.