Importance Of Actively Managing Corporate Reputation

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Dankotuwa Porcelain PLC is one of the best porcelain manufacturers in the world. The superior quality of the production is the key success factor of the company. The Company applies well advanced technology through the best machinery and expertise knowledge gain from industry expertise in German and Japan. Also the highly skilled workforce, who has been from the initial years of the company, contributes their best skills for the company. The quality of product considered as best in the world due to some superior characteristics such as whiteness, high translucency, high resistance to chipping and scratching and high quality decorations in pure gold and platinum.

Dankotuwa Porcelain is a niche market player. It deals with international renowned department stores such as Macys in USA, John Lewis and BHS from UK, EL Corte Ingles of Spain, Migroes of Switzerland, Jshanmal of Dubai and etc. Even though the products are exported all over the world, the company mostly targets the Europe and USA market. While some products sell under company brand name, the clients can make arrangements with the company co-brand the product or only include their brand name for the product (OEM). The annual turnover of the company is approximately USD 10 million through its operations. (Appendix 01)

Actively Managing Organisation's Corporate Reputation

There are arguments for and against the managing corporate reputation. In order to identify the suitability of this it is important to understand the impact of corporate reputation for the parties involve with the company.

The benefits of developing a corporate reputation can be summarized through the Reputation Value Cycle as follows.

Revenues, Profits, Market Assessment of Future Prospects

Enhanced Shareholder Value

Supportive Stakeholder's Endorsement

Investment in Corporate Initiatives, Citizenship & Communication

Corporate Reputation

(Garcia, 2007)




The importance of corporate reputation in valuing company shares

Reputation adds value to the actual value of the company. It increases the market capitalization by adding value to the company. Therefore, actively managing corporate reputation helps to increase the value of company shares in the stock exchange. This means increase the capital revenue for the shareholders. Further well reputed companies can easily enhance their earning through customer loyalty and respect from community.

(Garcia, 2007)

Managing reputation is a process needs certain amount of resources. Shareholders have to bare these expenses that invest on company reputation. This might cause to reduce the profit of the company and their dividends in turn.

(Garcia, 2007)


Importance of corporate reputation in attracting and retaining skillful staff

Working in a company which has good corporate reputation is a value added factor for the employment. Therefore building corporate reputation can positively impact on employee satisfaction. The satisfied employees remain long term in the organisation and spread positive word of mouth which causes to increase reputation of the company.

Further good reputation attracts more capable human resources to the company. Company could easily recruit people expertise in their field for a strong corporate reputation.

(CIM, 2011)

However, managing reputation may increase the cost of production. Building corporate reputation may reduce the cost effectiveness of the company. In the context of Dankotuwa, the company has to pay a lot of effort to get a price increase from their clients.

Further there is a risk whether the company can fulfill the promise and maintain the reputation without losing customer trust on the company.

(CIM, 2011)


Generate a positive image in client's minds

A positive reputation works like a magnet. Customers trust products from a reputed company. Therefore, it is easy for a company to attract and retain customers.

Porcelain products are durable items. However, if the company has good reputation customers do not want to worry about the quality of product and avoid post purchase dissatisfaction.

(Cees B.M. van Riel, 2007)

As increase the cost of production. Increase the price of product. Building corporate reputation may reduce the cost effectiveness of the company. In the context of Dankotuwa,

Further there is a risk whether the company can fulfill the promise and maintain the reputation without losing customer trust on the company.

(Cees B.M. van Riel, 2007)


Gain governmental support and protection

The existence of world renowned companies is a favorable factor for a country. Therefore, a company which has positive reputation can expect the government support for their operations. Government may consider the company as an asset of the country and provide maximum contribution to sustain the company.

(Peter J. Firestein)

In order be gain governmental support the company has to be the obeyed child of the government. Therefore, sometimes the company has to obey governmental pressure neglecting the company policies.

(Peter J. Firestein)


Support form finance bodies

Financial bodies measure the risk involve with financing reputed companies as low. Further dealing with reputed companies considered as value adding to these financial parties. Therefore, a reputed company can easily find sources of finance and having funds at low interest rate. Further such companies can demand for customized facilities and low rates rather than others.

(Cees B.M. van Riel, 2007)

Once a reputation has been built it is very difficult to survive it. Parties who are interest in company sustainability keen about a tiny change in relation to the company. Therefore, the company has to work hard in order pretend the financial strength of the company in a crisis situation.

(Cees B.M. van Riel, 2007)


Developing a good relationship with suppliers

Working with a reputed company is a prestige as well as an opportunity for suppliers. Through that the company which has positive reputation can enjoy discounted prices and adjustable payment schedules.

Further suppliers would like to maintain relationship with a reputed client. This ensures a well managed, high quality supply chain for the company.

(Cees B.M. van Riel, 2007)

In order to build a relationship with suppliers, the organisation have to work more closely with them. Requirements of suppliers need to examine closely and support in their needs. This is process that requires resource and extensive commitment.

(Cees B.M. van Riel, 2007)


Support from local community

Positive word of mouth that generated towards the company will work more strengthen than the paid advertisements of the company.

(Cees B.M. van Riel, 2007)

In order to gain corporate support the company has to involve with different CSR practices which are again cost for the company.

According to the above analysis we could identify that there are a lot of benefits for stakeholders by actively managing corporate reputation of Dankotuwa Porcelain. Among the vast benefits, the only negative aspect is increasing cost of production and price of the final good. Therefore, the managing corporate reputation can be identified as a favorable factor for different parties. (The stakeholder map of the Dankotuwa Porcelain is in the appendix 2)

Key Forces Impacting on the Reputation of the Organisation

There are different factors that impact on corporate reputation of Dankotuwa Porcelain. These factors can be identified as internal and external factors.

External Environment

Image based on the company's behavior

Corporate Reputation

Image based on the company's communication

Image based on the company's symbolism






Internal Environment

(CIM, 2011)

External Factors

Political influence on the Dankotuwa's corporate brand

Rescue Dankotuwa porcelain from crisis situation

Sri Lankan government has involved with Dankotuwa operation in positive way. Once the company was in its edge to close down, government involved to rescue considering as a national resource. The regional politicians actively given their support to runs the company until new investors come. Government has changed their legislations, allowed to the new investor to invest money until get the 67% ownership that is far above rate allowed by the legislation.

Provide opportunity for participating foreign trade fairs

Chamber of Commerce, Export Development Board and Department of Commerce are the governmental bodies that impact on the reputation of the company. They provide opportunity to participate foreign trade fairs which draw worlds' attention to the corporate name of Dankotuwa. In addition to that, by providing foreign contacts that collected from different embassies these government bodies support the company.

Social - impact of public awareness on luxury dining habits

Dankotuwa Porcelain provides high quality porcelain products for luxury dining. Therefore, the public awareness about luxury dining habits impact on the reputation of the company. When dining habits become popular among business meetings the attention on Dankotuwa products are getting increase.



Sri Lanka has recently loss the GSP + scheme for their products exporting to Europe. This has a significant impact on turnover. The taxes impose on the product will increase the price and directly impact to their buyers in Europe. The major portion of Dankotuwa sales are represented by European client base (52%). The company will lose this customer base due to the price increase that resulted from loosing GSP plus scheme.

Economic recession

The economic recession as well affected on the corporate image of the company. The European customer base which represents the 52% of corporate sales is affected by the recession. Customers are looking for cheaper options such as Chinese products as they cannot afford high quality table ware. This caused to reduce the popularity of the company in European market.


Imitative products

The quality of production highly impact on reputation of the company. However, with the technological innovations, their imitative products that come up with same designs of Dankotuwa table ware. As no designing cost and low quality these products are in low price. Not even these product hit the sales of Dankotuwa but impact on violate the customer image on Dankotuwa products as well.

Internal Factors

Corporate reputation arises from what organisation does. Therefore, the internal factors that impact on corporate reputation can be identified as follows.

Corporate resources


The competitive advantage of Dankotuwa Porcelain is its high quality production. They are the superior manufacture of the whitest porcelain and expertise in heavy gold and platinum designs. They have developed new porcelain shapes with contemporary designs.

Human Resources

Dankotuwa hires the most talented people in their field. The majority of staff has been with the company from its initial years. This shows the loyalty to the company as well as the well performance of the company as a modern employer. The wages are not significantly different from the industry average. Employee dissatisfaction will ultimately create a negative word of mouth about company that impact on reputation of the company.


As we discussed earlier Dankotuwa Porcelain factory is equipped with the newest technology for manufacturing table ware. This enable the company to prepare best quality product with less effort and make customers satisfied. However, the production capacity of Dankotuwa is not sufficient to satisfy the demand. The customer dissatisfaction may adversely affect on corporate reputation of the company.


Dankotuwa Porcelain is a public company which has about 3000 shareholders. The largest share of the company previously holds by a consortium of Japanese companies. Recently the company has expanded the share capital by three times and currently taking decisions based on this capital expansion. Currently the major share holder is well-known US Investment Company who is having 67% share ownership.

Vision Mission and Strategy

Our Vision

"To be globally known as one of the best lifestyle products and services providers."

Our Mission

"To redefine the art of dining in distinctive designs and elegant shapes to enhance lifestyles while providing adequate returns to all stakeholders." (2008)

Dankotuwa strategy is more products oriented. Therefore, the more focus is on enhancing the production quality and capacity. The vision, mission and strategies of the company focus on this aspect. Therefore, the focus is on marketing and building reputation is very low. The lack of vision on developing a strong corporate image negatively impact on the Dankotuwa corporate image.


Distribution strategy

The products are distributed locally as well as internationally. In terms of local distribution, Dankotuwa practice selective distribution by selling only through own outlets established in major cities and strong dealer network. Through that Dankoutuwa expect to maintain their exclusivity among other players.

For the exports they have appointed dealers for different territories and some franchise shops. In terms of international deliveries, company ensures that products are reached to the client on time. This makes customer satisfaction and trust is increased about the company.

Marketing and Sales

Dankotuwa products are sold to the world's renowned high end customer group such as, Macys in USA, John Lewis from UK, BHS in UK, EL Corte Ingles of Spain, Migroes of Switzerland, Jshanmal of Dubai, etc. Dankotuwa association with these brands brings reputation for the company.

Even though company is good in retaining customers, identifying new opportunities in the market place and acquiring new customers are not in good level. No international promotions other than participating for exhibitions are currently used to promote Dankotuwa brand.


Dankotuwa is a company that provides excellent customer service. Extremely customized service is given for the each client of the company. If products are not satisfied to customer, company bares the loss of the production.

Organisation structure and culture

Organizational Structure

The company operates under a hierarchical structure. The status of each positioned is given high value within the company. Therefore, it is not easy to implement new ideas. This is one factor to keep company far behind in developing corporate reputation.


The culture is more traditional and very far behind identifying and applying technological upgrades. This allows competitors to be highlighted in the market place by burring Dankotuwa name under sand.


The factory operations conduct under Kaizon method, Total Quality Management, Total Productive Maintenance and 5S practice with the purpose of enhancing the performance. The best machinery and expertise knowledge gain from German and Japan are used for production process. The awards that Dankotuwa gained based on these practices cause to enhance the reputation of the company.

Importance of Actively Managing Corporate Reputation

Whether a person, country or company, a good reputation brings different benefits to the person or thing it holds. In relation to a company/firm we could discuss the formal corporate reputation. When discuss about Dankotuwa porcelain we could identify a corporate reputation that eventually generated based on the production quality. My argument is that the company could gain more benefits rather than they gain currently by developing their formal corporate reputation actively.

As the first factors that keeping the company away from developing corporate reputation can be identified as follows.

Senior management involve with serious operational issues rather than focusing on long term corporate reputation management.

Developing corporate reputation is a decision at board level. However, Dankotuwa often busy with day to day activities that manage their production capacity in order to fulfill customer requirements.

Poor marketing oriented culture doesn't identify the importance of corporate reputation

Assess the current corporate reputation practice of Dankotuwa Porcelain

Currently Dankotuwa Porcelain doesn't follow a formal reputational management process. The company is more towards product orientation. The current corporate reputation of the company can be evaluated based on following criteria.



Corporate Statements

Key Performance Indicators



"We will uphold high ethical standards and ensure honesty in all our interactions"

"We will maintain a high standard of professionalism in everything we do. While we will encourage"

The company has received the "Super Brand" status in 2007 for excellent brand image.

Company has won several export awards in the industry sector and presidential awards for the innovative exports.



"We will actively promote discussion and dialogue and promote a democratic style of management"

"We will maintain transparency and openness in all appropriate transactions"

Winner at the excellence in Annual reports organized by ICASL.

Presidential award as the exporter of the year 2005



"We will treat our working colleagues, customers, suppliers and community with due respect"

"We will actively promote innovation, continuous improvement and the acquisition of skills and knowledge"

Dankotuwa produces ERI trophy in porcelain for the Windies tour

Won several medals and awads as most outstanding exporter in the industry.



"We will uphold high ethical standards and ensure honesty in all our interactions"

"We will carry out our functions in a responsible manner and be seen as a dependable organization"

Dankotuwa Porcelain involve in CSR activities.

Donations for Dankotuwa Girls school

According to the above analysis we could see that Dankotuwa porcelain is excellent in product and quality related aspect. However, company doesn't focus on actively creating a corporate reputation. There is a high risk behind this scene. We could identify the benefits that Dankotuwa Porcelain could gain by managing its corporate reputation.

The benefits of developing corporate reputation

Failure to build a corporate reputation involve with huge cost rather than maintaining it

Reputation is the strongest determinant of sustainability of an organisation. Stock price can be recovered and business strategies can be changed, however, if the reputation of the organisation heavily injured the recovery is difficult. The risk for the reputation of the company will impact the survival of it.

To be the front of competition

A company which practices corporate reputation can be highlighted in the market place due to its practices and the respect from community. Constant feedback from outside is the best protection for the company to survive and to be leader in competition.

BP, for example BP laid its thousand-mile pipeline through Azerbaijan, Georgia and Turkey. In order to reduce the disruptions from public, BT consult thousand of land owners along the way of pipeline. Then BP invested $30 million on developing hospitals, water systems, schools and other social assets along the route. These practices helped the company to build its least disruptive route.

Customer preference and new market opportunities

The "bank of goodwill" is a promotion to the company. People increasingly choose product considering the company's behave behind these products and services. A strong corporate reputation can attract more customer base rather than attracting for its production quality.

Premium price

The reputation of a company can add value to its offerings. Consumers like to pay higher price for the reputation if it is worth to pay. As example, customers happily buy products that are included the company's CSR expenses into the final price.

Stakeholder support

Company which maintains its corporate reputation treats its stakeholders well. Therefore, in a situation of crisis, these parties support the organisation to re-build.

Career of CEO

There is a growing trend to measure the changes of corporate reputation by Board of Directors, as part of CEO evaluation process. According to an international survey more than half of CR is attributed to the CEO. Same as CEO's reputation impact on the CR, drop in CR impact on damaging image of CEO as well.

Development of corporate reputation management process

Practices speak louder than words. Therefore, more than the communication, an organisation should focus on shaping their activities. According to the Peter J. Firestein method, following are some initiatives that the company could follow in order to develop a corporate reputation.

Fundamental principle

The fundamental principle of the organisation should be ties among institutions are always ties among individuals.

Stakeholder mapping

In order to understand the influencers in the market place, the stakeholders of the company can be mapped.

Dankotuwa stakeholders and their influence on the company can be mapped as follows.


Stakeholder group

Power/ Influence on the company















Government in customer's country
















Financial Bodies





Appoint a reputation coordinator

A reputational coordinator should be appointed to oversee the process of building corporate reputation. This coordinator should directly report to the CEO about the each steps and progress.

Allocate responsibility among staff members

Develop relationships with different stakeholder groups. E.g.: suppliers, clients, government

Identify the interests of different stakeholder group

Capture of intelligence gained from contacts; and

Develop promotional campaign

Regular internal forum

Organise regular internal forums where information and experience can be shared among the internal stakeholders. Through that, employees can have an idea about how the corporate reputation is developed. Further, it could be helped to develop a consistent message rather than generating different images by different teams.

Reporting mechanism

Collect intelligent gathered by different team assigned for different tasks. The information should be filtered and make available for decision makers of the organisation.

Continuous staff training

The internal culture of the organisation needs to be changed in order to build and maintain the corporate reputation. New people of the organisation need to be cycle in the process. Involvement for building corporate reputation need to be a key factor in career developments.

Source of idea in the industry

Dankotuwa needs to be the source of idea in the industry. Therefore, it should fulfill customer interest through sponsorships, organizing conferences, seminar according to the interest of different stakeholders.

As the above the reputation need to be built up and maintain. The health of the corporate reputation needs to be checked occasionally. The following criteria can be used to measure the corporate reputation.

Enhancing business performance

Strengthens the attractiveness of the organisation

Positive effects on profits

Attracting and retaining customers

(Peter J. Firestein)

The processes, structures and systems to improve organisation's reputation

The process to establish a corporate reputation is discussed above. The necessary improvements in the internal culture can be discussed along the seven S frameworks.


Dankotuwa is a company which focuses on the production process. However, in order to build corporate reputation, the marketing oriented approach need to be followed. The customer requirements need to be clearly identified and satisfied in an innovative way.

Position the corporate name

The Dankotuwa brand name needed to be positioned as a unique brand that targets the high end customer groups all around the world. The brand needs to be positioned as a global brand name for unique designs and high quality.

Branding strategy

Currently Dankotuwa doesn't actively manage its brand image. In order to develop a corporate reputation Dankotuwa need to practice a proper branding strategy. As the company is popular in its name Dankotuwa, it is better to follow "corporate branding" rather printing client's name on products.

Competitive advantage

The most strengthen competency of Dankotuwa is its production quality. However, as a global brand, Dankotuwa cannot depend only on this competency. Therefore, it is important to compete in the market place actively. Dankotuwa doesn't have a wider global appearance. Therefore, it is dangerous to go for face to face competition in global market. However, the company can practice franking strategy by identifying competitor weaknesses and attack them through product developments.


Both push and pull strategies need to be followed to promote products. Dankotuwa deals with high end dealers in international arena. However, other than participating for exhibitions no promotional activity has been undertaken in international level. Therefore, it is important to focus on international promotion campaigns.

Further, Dankotuwa web site needed to be upgraded to facilitate the online purchase for customers. Rather than going through the dealers, this method would generate more customer base and more respect for the company.


Dankotuwa currently practices no CSR activity on behalf of the company. CSR is important to generate a positive image towards the company among community. Therefore, Dankotuwa should focus on practicing some CSR activities in relation to the community.


Staff training is maintaining the corporate reputation. Dankotuwa staff needs to be train properly in order to maintain the corporate image of the company. Current stereo type culture of the organisation need be changed to an innovative and vibrant culture. In order to spread a positive word of mouth about company, the human resource management of the organsiation need to be further strengthens. Promotion, salary increments, appreciations and other benefits should be given to satisfy the internal people of the company.

Employee attitudes need to changes in order to suit for a global level brand name. The governmental kind or behavior of them should be changed to more proactive and committing behavior. A proper training should be given and suitable controlling techniques need to be followed to achieve this goal.

Employee evaluation methods need to be take place in order to identify skilled employees and employees who need to develop further.


Dankotuwa follows a hierarchical order in decision making. As a result new ideas are rarely implemented. Even though Dankotuwa cannot directly implement flat organizational structure, it is important to create a flow of new ideas and way of taking them to top management faster. The company structure needs to be upgraded to make it an industry benchmark.

Learning culture

A learning culture need to be established within the company. Employees are needed to come up with new ideas and learn from mistakes done. By this way the company can ensure a day to day development within the company and make it as a benchmark in the industry.

Team based approach

The internal environment focuses on individual achievements rather than team approach. This is more inefficient and cause to create different internal conflicts. Therefore, my suggestion is to develop a team based culture within the organisation. The management should develop such approach and value the effort of each team.


Computerized system

There are different formal procedures that are established for daily activities get done. Even though the company has internal server, most of internal processes take a long time to implement. There are a lot of bottle necks to pass in the internal process of the organisation.

Therefore, computerize all the internal activities and keep all the data in centralized place would be important to enhance the efficiency of the company.

Enhance the efficiency of production process

The company is currently not in the process of fulfilling the customer requirements on time. This causes to damage the corporate image of Dankotuwa. Therefore, with the purpose of developing the corporate reputation, the production capacity should be improved further. This will helps to meet customer requirements on time and build good corporate image among them.

Shared value

The shared value of the company should be developing a global corporate image. For that, developing an internal knowledge about corporate vision is important. Each and every task of the organisation should focus on developing the corporate image.


Dankotuwa should develop its skills on developing the corporate image in the global market place. The capabilities in terms of strategy, resources and process need to be improved to be a benchmark in the industry.


The current leadership method of Dankotuwa is not marketing oriented. The leadership of the organisation should focus on strengthen the market position. Therefore, the operation style of the company needs to be changed into the marketing base approach.

Dankotuwa currently practice an autocratic leadership style. Senior management decide what to do without getting ideas from staff and workers. This is very inefficient method. To be a benchmark in the industry and develop a corporate reputation, my recommendation is to practice more democratic leadership approach. Through that company could have new ideas and implement them to match with world's trend. Further, employees who participate for decision making are happier than who controlled under autocratic leadership.

(Total Word Count: 4,266)


Building a corporate reputation is important for a company as well as its stakeholders. Even though there is certain cost to establish and manage a corporate reputation, the benefit it brings to the company is much bigger than this cost. The world is changing rapidly. To be stay competitively in the market place, developing a corporate image is very important for a company.

Dankotuwa is not a company that actively manages its corporate reputation. However, the vast benefits that we discussed earlier justify the importance of building of Dankotuwa Porcelain as global brand.


B. Olutayo Otubanjo, T. M. (2007). Understanding the meaning of corporate identity: a conceptual and semiological approach. Corporate Communications: An International Journal .

Cees B.M. van Riel, C. J. (2007). Essentials of Corporate Communication: Implementing Practices for Effective Reputation Management . Routledge.

CIM. (2011). Managing Corporate Reputation. Hampshire: BPP Learning Media Ltd.

Garcia, J. D. (2007). Reputation Management. New York: Routledge, Taylor & France Group.

Peter J. Firestein, P. G. Building and Protecting Corporate Reputation. Global Strategic Communications. Inc.


Appendix 1

Company Background

Dankotuwa Porcelain is a world class manufacturer of Porcelain Tableware, Located in Sri Lanka for the past 27 years. It is an ISO 9000/2000 certified company. Our porcelain body is fully vitrified and is the whitest porcelain in the world. Its high translucency and double fired scratch resistant glaze ensures complete customer satisfaction.

Proof of our quality is the long and continuous loyalty shown by such esteemed companies as Macy's Department Stores USA, Selfridges and British Home Stores of UK, El Corte Ingles of Spain, Jashanmal of Dubai and many others countries. The demand for 'Dankotuwa' spans across 25 countries, and five continents with buyers from Belgium, Czech Republic, Colombia, Dubai, Germany, Greece, India, Ice Land, Italy, Japan, Kuwait, Norway, Pakistan, Poland, Russia, Spain, Switzerland, U.S.A, U.K, and Ukraine, etc.

Their exquisite designs, vibrant colors and peerless quality, continue to enrapture buyers from all over the world. Dankotuwa products are characterized by individual artistry, innovative shapes and designs, by world famous designers such as Mr. Robin Levien, Mrs. Pamela Greaves and Mr. Jonathan Smith, from UK and Professor Wolf Karnagel from Germany. As a result of this Dankotuwa has gained a reputation as a trend setter in the Global Tableware industry. Dankotuwa Porcelain aims to stay ahead of the competition, producing state-of-the-art designs, specially in Gold & Platinum designs and shapes with superior white glaze, to complement individual lifestyles.

Our goal has been a tireless quest for elegance and quality. Over the years, using the best materials, the foremost production methods and incorporating the latest trends we have been successful in winning many awards and accolades. Dankotuwa has won more than 30 awards and certificates for the recognition of the export performance in their 27 years of history.

The pride of our organization is the unmatched skill of Dankotuwa's 1,330 strong workforce, which over the years has been honored to perfection. Dankotuwa, working environment and remuneration are above par in the industry and this together with our worker circles and management style ensures the smooth and efficient flow of work which is very production-oriented. Through the use of Kaizen, Total Productive Maintenance, Total Quality Management and the 5S practice we develop human resources for better performance: encouraging and motivating our employees at all times, providing them with opportunities for career and self-development.

The company's culture gives employees an opportunity to contribute, grow and advance based on merit and talent. We encourage employees to further their knowledge by providing them assistance for professional courses and postgraduate studies