Reputation

Building intangible resources: The stickiness of reputation

Ang SH, Wight AM. 2005, Business Policy and Strategy Division, Academy of Management Annual Meetings, August, Hawaii, USA.

The notion that reputation takes significant time and effort to build is well recognized by researchers in the field. This study tests the effects of consistency and change in relative financial performance on subsequent firm reputation. Based on reputation data from Fortune magazine’s annual survey of corporate reputation, we find that firms that perform relatively better tend to have better reputation. In addition, firms that perform consistently better also have better reputation than those that are less consistent in their superior performance. Conversely, firms that perform consistently worse have worse reputations than those that are less consistent in their inferior relative performance. Finally, the change in reputation as a result of a change in positive performance follows an exponential rather than a linear function. These results suggest the sticky nature of reputation and have implications for firms attempting to build intangible resources for competitive advantage.

Building reputations: The role of alliances in the European Business School scene

Baden-fuller C, Ang SH. 2001, Long Range Planning, 34(6): 741-755. (This paper was publicized in the Financial Times – highlighting the competitiveness of European business schools).

How should businesses best choose foreign partners as they seek to internationalise? We use reputation theory to examine this question. Building reputation is a key aim on the European Business School scene, and this article starts by using more than 2,000 articles written by European academics in top quality journals to update the LRP research reputation rankings of European Schools. We then look at the way international research collaboration takes place, and find that alliances between schools are far from random. It seems that academics from US and European schools are strongly attracted to form alliances with one another, and the choice process appears to be consistent with reputation theory that suggests US schools seek out the most reputable foreign partners. Moreover, the “charmed circle” of high-reputation partners appears to be defined on a country-to-country basis rather than from a whole-Europe perspective. The lessons for managers in internationalising industries are that international alliance choice must include a reputation perspective, with great care being paid to the exact nature of the foreign partner’s achievements.