This report will cover the corporate reputation of LB Finance PLC and will identify and illustrate the actions that the company and the superior's can acquire to improve and achieve corporate reputations and potential growth and success.
Any company should to follow realistic strategies over the long term to refashion their reputations and modernize their outstanding name and reach real life achievements. A company's corporate reputation is frequently aliened with the activities and the product brand to which the company is allied. Trustworthiness is what LB Finance as a financial company needs most when constructing reputation with the clients.
Already LB Finance has a good name and reputation as it had been involved in many a CSR Projects as well. This is especially when the company as a financial institute work actively to build their high-quality reputation, to build the friendliness and goodwill towards its cliental and the human resource. Corporate reputation is a vague concept, where research generally shows that a good status perceptibly increases corporate worth and provides constant the competitive advantage.
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The global economic recession brought many a challenges to the company. Yet, the LB Finance managed to overcome the difficulties. Some call it luck. But LB Finance styles it as timely strategies which were put in to action at the correct time. LB Finance PLC have been constantly conceptualizing and implementing crucial measures for the past five years. Nevertheless, this requires a numerous and various complimenting fundamentals. LB Finance is now reaping the benefits of these timely strategies and are empowered to continue building and expanding its network and managing its reputational aspects.
Corporate reputation is an intellectual representation of a company, held by an audience that comes to their mind when one sees or hears the business identity or sees its logo. Company image along with the reputation have in the past been aligned with its concepts, which is related to the senior management or to the board of directors. At present, conversely growing number of smart executives identify that corporate image and reputation which are critical to corporate assets and directly linked to competitive success (Gray and Balmer, 1998). Corporate image can sometimes give an influence indicator, and differentiate a company from its competitors and inspiring purchases. It is also widely believed that a positive reputation among employees can be also a key factor of high morale and productivity (Gary and Balmer, 1998). Nevertheless, the management of corporate image is an exigent duty, particularly in the service industry Financial, (Nguyen and Leblanc, 2001). If a company managed proper and positive corporate image it can add value to a firm in a multiplicity ways. On the other hand, a negative image can destroy a company's reputation and distance the clientele.
A strong corporate reputation in any company will generate confidence in the present as well as in the future and can power a company's success and benefit in the long run.
LB Finance recognizes its company value and the current level of market capitalization. LB Finance focus on the company's excellence of its products and services that it offers to the customers and its market position. The company's approach is to measure and manage corporate reputation which provides with the tools which needs to maximize these most precious assets and capitalize on the profits on loans, hire purchases and fixed deposits.
Doorley & Garcia (2004, p. 4) executed the whole concept of corporate reputation in to a small formula.
Reputation = Sum of imaged = (Performance and Behavior) + Communication
2.0 Why "Corporate Reputation" Important to today's Business
The expression of "Corporate Reputation" refers to how optimistically, or pessimistically, a company or similar organization is connected to its key stakeholders such as workforce, customers and financial analysts.
The financial statements do not exactly reflect the value of a company's inexpressible resources such as customer relationships, talent, and modernization. Beyond description assets, such as reputation are now central to business competitiveness and achievements.
The value of a good reputation in a company such as in, LB Finance will continue to grow fundamentally, since its competitive advantage and their associations with the correct tactical and business partners. They have the ability to expand and retain the most excellent talent to the benefit of the stakeholders, if crisis strikes. Furthermore, in a period where there are regulatory watchdogs, a positive reputation can develop relationships with the management officials and the government authorities.
2.1 How to build corporate reputation at LB Finance
Always on Time
Marked to Standard
Companies cannot really govern with its own reputation; it can only function in a sound and straight technique, and work to communicate this to employees. Hence the general expression for 'reputation management' is deceptive and cannot directly manage their own reputation of the organization, or act to strengthen the standings in the areas that consider the consequence to the company environment.
The e attitude of the workforce towards the organization and their relationships can be inclined by stake-holder association with the management activities, particularly when activities are carry out on a cooperative symmetric descent which involves treating them by esteem.
The Corporate reputation is more defined by the operational practices than the communication used. Yet, the corporate reputation can be influenced and inclined by communication activities which are used. The Communication programs are important and intended for creating responsiveness of good operational perform and in enhancing the organization's associations with the workforce.
2.2 The Main Components of Corporate Reputation
The company behaves ethically, is a commendable, valuable of respect and responsible.
The company has accomplished workers, treats its people well, and is an attractive workplace.
The company is economically strong, has a record of profitability, and has growth prospects.
The trade is a leader rather than a follower, is innovative.
The business is well managed, has high quality management, and has a clear visualization for the future.
The company recognizes public responsibilities, supports for good causes.
The organization cares concerning strongly to committed customers.
The organizational stands after its products and services, provides constant service.
Source: http://www.cuttingedgepr.com/articles/corprep_important.asp 05 Oct 2010
The external forces of LB Finance can be identified by the mini Survey done on Appendix 3, and the number of competitors which the company has and also the Image which the company has build up is analyzed too.
Internal forces which creates impact on company's reputation
Internal forces too impact on the corporate reputation and on company's corporate behavior and on images based on company's representation & images based on company's communications. These factors can be controllable. An action of the following forces creates impact on company's reputation in terms of behavior, representation and interactions.
An internal force includes the top management, human resources, customers, suppliers, stake holders, etc. (Geysey (1999) recommended subsequent the key drivers of corporate reputation.
2.3 Competitive AND Effectiveness
The Company's performance recorded in 2009/10, shows how during the challenging period it underwent during the economic down turn and how the company faced the storm. It is commendable that the company overcome the financial crisis triggered by the global crisis which impacted the whole financial markets and companies on during the mid quarter of year 2009.
Nevertheless the tendency was overturned while the government ended the LTTE terrorist attacks in the North & East in May 2009, which had troubled the country for near 3 decades - a feat achieved by the government, which numerous other regimes over years regarded as "Mission Impossible" and had been made to live with as a more or less fait accompli circumstances. Due to this turn of actions, and also the practical procedures taken by the Central Bank of Sri Lanka (CBSL) - the end of the year witnessed a more liquid money market and an improved equity in the marketplace. This had been a positive encouragement process, as well as good to build up the corporate reputation within the company.
On the entire a stoic hardiness was revealed by the financial sector in the later episode of 2009/10. Swift action was taken by CBSL to counter the liquidity constraints faced by certain financial institutions restored investor self-confidence in the confined finance and leasing activities. Measures adopted by CBSL to stabilize the overall financial system are commendable, included among others, a special motivation package to improve liquidity levels of distressed Registered Finance Companies (RFCs) and a Credit Guarantee Scheme for bank loans granted to RFCs and generalized Leasing Companies (SLCs). Initiatives to reinforce the regulatory and decision-making framework of the financial sector - such as monitoring fulfillment with the Finance Companies (Corporate Governance) direction issued by the Monetary Board, were most welcome by Companies such as LB Finance, as it enhanced the flexibility of the financial system in general. (LB Finance Annual Report 2010.)
3.0 Benefits and Drawbacks of Managing Corporate Reputation (CR)
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There are a number of forcers which impact on company's corporate reputation. Nelson & Kanso (2008) presented that there are a variety of internal & external factors which influenced the company's corporate reputation as well.
Presently, LB Finance background is with dynamism. LB Finance in establishing and maintaining a firm corporation reputation which is significantly crucial to attain a reputation and a marketplace, a privilege that dominated in establishing a strong corporate identity that characterizes what their company's condition predestined and intended for.
The Corporate Reputation management is the navigation of spotlight and personated of the company. It is the beginning of an opinion of a characteristic that can be measured as one of its most aspects in reputation. CEOs and senior management acknowledge the import of reputation management in terms of building and moving forward a company's progress.
The LB Finance reputation can also draw or discourage industry and asset associates increase or discourage employees, partners, increase or damage net income, recruit or dispirit human resources, convince lawmakers and legislators, and simply touch all viewers. Currently, it has become the increasing hub on the industry of corporate reputation management. A Company's status establishes buoyancy in the expectations of the company and can improve the achievement of the business by coming up gainful in challenging markets, attracting and retaining talented human resources, put off competition, appeal to resources investors and company partners and a numeral of other return.
The CR management is a skillful art utilizing a range of highly residential systems and techniques which include reputation scorecards; which are the KPI's or key performance indicators, passive benchmarks, media contented analysis, reporting surveys; examine on crisis and new media dimensions.
The tools and techniques which are mentioned can be calculated to sustain the corporate reputation management. This involve studies on perception, supervision, surveys and investigation on the company status, capability and evaluation methods in Public Relations and communications, survey on industry reflection and stakeholder research. As a result, a complete collection of techniques are engaged to boost and protect the reputation of LB Finance establishment ,unconstructive exposure beginning different types of media, and to preserve the company's identity in the impending of the general public.
A wide reputation management of corporation is calculated and high quality if and when it includes practical, immediate and permanent measures that assurance the practical, unthinking and continuous, measures that assurance the safeguard, improvement the LB Finance's reputation. Keeping up with the vibrant tempo of the selling means that the business has to continuously encourage its reputation by having Public relation drives to boot off the new services to the audience and future clientele who enquiries. The company can arrive at its obtainable clientele through responding to their mails, emails or complaints. This also could have by initiating ISO standers for the company. By having many of the problems could be solved. If negative aspects are exiting and nearby it is need for a decision to organize the crop for the company, then instant reputation which occur could be control the damage for the company, then immediate CR management is the most excellent alternative to build to decide the issues.
It's important that corporate reputation management is no more than successful when there is continuous performance of professionally designed and considered with the aim of enhancing the company's existing and position and the status. The resolution to this is to encompass a well-built and trustworthy commutation plan that should be implemented constantly crossways the company business mature.
Damage to reputation will be different depending on the environment of the industry and the basis for stakeholder trust. In the economic services sector reputation damage would consequence from a financial irregularity. Clients connect professional for their sound judgment and whichever issue more than truthfulness threaten the customer's confidence in the reliability. Scratch to reputation would also be caused by the defection of key talent to a rival or by underprivileged supervision of junior employees foremost to gaps at LB Finance service capability.
Damage to reputation could also be caused by treating customers unfairly in order to meet the unreasonable targets of the employers. No matter what the case is consequently lost is less relevant than the bad publicity which accrues from media interest in the company. Employee's behavior can only be controlled by codes of conduct and beyond that exits the risk of damage to the organization.
4.0 Market Control & Customer Focus at LB Finance
LB Finance withstood the weight through the scuttle on Fixed Deposits which could be regarded as the litmus investigation and a strong reflection taking place on the Management Team to challenge the standard. At that time, a decline in demand for credit was witnessed thus affecting the bottom line growth as well as a drop in capital adequacy within the sector. Many RFCs scaled down their operations. In difference, LB Finance placed 6 new branches and 18 new pawning centers across the Island, while the bottom-line profits - after tax grew by a healthy 39.09%. Additionally, level I and level II Capital requirements were other than gleefully met. A traditional move towards to lending was adopted by most RFCs faced with rising non-performing loans, while the Company recorded a decline in its NPLs from 1.70% in 2008/09 to 1.05% period of the year under review. Total assets of RFCs grew by only 5% this year compared to 23% last year. In the light of this industry trend - the 22.67% growth in Total Assets recorded by the Company is immensely creditable. Increased liquidity risks were also faced by RFCs that had invested significantly in real estate, due to their inability to organize of the assets expeditiously, unlike L B Finance which had invested funds in liquid and stable investments. Nevertheless, the following CBSL intervention and a financial renewal of sorts towards the final part of the year helped to recover the financial indicators.
4.1 What the Future Holds at LB Finance
Peace and stability in Sri Lanka have brought it - an improved macroeconomic environment, increased investor confidence both local and foreign investors, and a firm resolve among policy makers to expedite communications development and reconstruction especially in the liberated areas. The Sri Lankan economy is expected to grow faster than in 2009 at an estimated 7-8%. Global economic recovery will be an added impulsion. The downward trend in interest rates and a sense of optimism never before seen in the economy is spurring a growth impetus, particularly in building and tourism. Yet, the company has done in the past, and it will carry on to assist the micro entrepreneur- those who build their livelihoods through three-wheelers, tractors etc., to become a vital cog in national expansion. And it will continue to extend facilities to an array of industries, and spread the risks. Measures taken by to contribute to the economy and help society are comprehensive in the CSR process.
LB Finance can build Awareness Campaigns to widen the reputations and culture among credit customers and borrowers. It can encourage and show how lending institutions could increase the facility of credit to customers and borrowers on the part meet all the obligations.
LB Finance also has the competence through the business to generate and encourage people and also influence the acceleration of sensible processes to facilitate lenders to achieve superior earnings. In the current business environment and the industry may have to engaged in, and promote seminars to explain to the public on building up, and in turn to make the lending process contribute towards a stable economic environment and also in terms of managing the corporate reputation. As a strategy of the Company, it has to remain always conscious of the confidence placed in the company by the shareholders and that will at the latter stage commence to exploit on the rewards.
LB Finance has the power to align with all probability and the business has the unwavering devotion of the clientele. The employees believe that the Company could carry substantial business and worked tirelessly, The Management players whose force and keenness to innovate new business and to ensure business movement and maintain its expansion drive. The external and qualified advisors and consultants of the company too who makes the LB Finance Plc to attain a bright future.
5.0 Forces Impacting Corporate Reputation in a Financial Company
As any depositor believes the reputation conveys important information regarding the revenue and long-term potential and gradually moves towards investment preference. The information has been of attention to investor association's managers for decades, and the result of the company's status on the reaction and performance of non-institutional shareholders has scarcely been dealt with empirically. Even though some confirmation potency has been build up by accounting firms, it tend to contract with institutional investor and stay as in proprietary, establishing a require to further look at disposition investors' to reply to company's position.
In the existing learning, corporate reputation is investigated as a component within the structure of risk and go back opportunity. Investigated as a determinant in the structure of threat and revisit the opportunity. Investors end to presume that good investment opportunity's approach as of superior company, that is from company with a elevated status, rating Shefrin and Statman, 1995; Shefrin, 2001. Locking on the reviewed data published magazines on the standing of major companies, 'Investors who judge that superior stocks are stocks of good companies will relate high-quality with together protected stocks and elevated potential earnings. This defies experimental facts that prove the conflicting to be factual. Investors, if they anticipate secure stocks and high outlook earnings beginning good or highly alleged companies. There might be, still, additional reputation's role in influential sponsor concert than this probably bewildering choice-effect.
LB Finance is well patronized by customers; they will prefer to deal with the company ahead of others. And these clientele will pressure other possible customers by word of mouth marketing. Suppliers will motivated and be more tending toward trust in the company's capability to pay and to make available bond trading conditions. If any problems take place in the trading relationships and the suppliers will be more incline and to give the benefit of the doubt. The regulators will trust the company more which has and have a good reputation and will be less inclined to punish if companies delay in meeting obligations. Mainly the Corporate Reputation plays a vital responsibility in the success of business objectives and to be lead in any business.
Corporate reputation also is essential to become a business leader. As an element of the development of evaluating the performance of the Chief Executive Officer (CEO), there has been an upward tendency for Boards of Directors to determine the changes in the organization's reputation.
Most excellent regarded companies achieved their reputations by methodically involving the routine management in the administration. By escalating our faith and confidence in the company's measures, integrity and reliability create economic value.
The two major sources of a corporate reputation can gauged by a person's past business with LB Finance and the level and outlook of their straight and indirect communication through the business. A positive reputation requires additional effective communication efforts it needs, and a very good characteristics that can be molded all the way through consistent performance, typically over many years.
As recommendations for the report I have highlighted some of suggestions that the LB Finance could implement in order to meet its long term goals. Building a solid reputation is essential for any company which has a longstanding and long lasting name in the industry. There are some few recommendations and information as to how to build reputation at LB Finance PLC..
Professionalism will be needed all times especially when dealing with customers and with the employees. L.B Finance should build customer service and policies from day one and stick to them. All times treat the customers as the king and give the fullest corporation. Getting advice and assistance from superiors in the industry could help to put any problems that may occur in down the line.
Strengthen the company's reputation, by been trustworthy, responsible, honest and reliable and stick and keep any promises which the company makes to the customers as especially as it is a financial institution. Settle on whatever the company reputation can be built on and which achieves the mission statement that works around LB Finance, and strengthen this message as and wherever essential and necessary. Building a reputation takes time, hard work and dedication.
In preparing in building a reputation it's always best to plan in advance. By planning how you could build the reputation, where and when, for example it can be built on the competition or could perhaps be on the company. Whatever status build on the company its best to start planning and putting it into action from day one as its will be a derivative option in the long run.
In order of these reputation drivers the recommendation varies on the overall influence. These drivers make their way to the top of the recommendation stage. This further reinforces that the actions taken to address reputation should also influence and support business performance in the long run. The KPI's or key performance indicators, passive benchmarks will to have a beneficial on the company as loyalty; customer satisfaction too will be of a positive image and could build up the company corporate reputation.
There will not be any uncertainty that reputation will play an ever more important role in all decisions relating to in whom to place confidence. Managing corporate reputation has at all times been a key business objective.
Internet era (Information Technology IT) of electronic instant information is yet another standard that an organization needs to consider and monitor. A good reputation can be hijacked by a fraudster and identity deception is a major resistance to financial institutions such as LB Finance
It is simple to discover what damage to reputation is after damage has been caused. The challenge is to pro-actively measure and protect it. There is a new generation of people who use electronic media as a medium of choice, not just for communication but opinion forming. Reputation depends on stakeholder perception and truth is often a casualty of sensationalism. Considerate reputation will involve a level of pro-activity before unseen and needless. Investor assurance has always relied on gossip, now the medium for spreading rumor is reachable to all and too are the Political risk, computer virus danger and other forms of trade stability risk.
Potential trends in exposure assign that intangibles will be incorporate not by regulatory obligations but through the acceptance of the code of transparency and good control. Organizations by a large number of employees should recognize reputation as a value at risk for the company.
How do you value of corporate reputation. Anyone defend to put a figure against corporate reputation? Adding a value on top of a brand was once thought as impractical as a result, value a reputation should not be low-cost for the future. Nevertheless, one has to think why a person would like to fix many factors which control the value of reputation to make this feasible.
Mostly incidents value is taken for granted, until danger comes, and results damage to reputation. A good reputation is a good asset for the company and bad reputation is a liability for any organization. The aim of management should be to improve a good reputation and construct it into the marketing strategy of the company. This involves a consideration of the factors that could add to a good reputation in the eyes of stakeholders. Wherever reputation is regarded as a liability and the objective should be to contain or reduce the danger of damage which and when occurs. This leads to a defense strategy and eventually a good turn for the future. Building reputation l takes time and the goal and can be achieved. As LB Finance will be able to manage good reputation and achieve a gigantic position in the future.