Analyze Corporate Reputation Judgments Commerce Essay

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The most frequently used is the Fortune's popular study of the 'most admired companies', which released every year by the magazine since 1982. The measure will be based upon ratings of companies acquired from invited managers and analysts. It reveals the reviews of industry insiders and has a solid financial halo (Brown and Perry, 1994; Fryxell and Wang, 1994). The corporate reputation measure is computed from feedback to eight questions which range from investment value to social responsibility. Whilst pioneering, Fortune's rating which has been carried out by Hay Associates for the past ten years is actually widely criticized for deficient in methodological rigor and in terms demonstrating sample bias (Brown and Perry, 1994; Fryxell and Wang, 1994). The essential advantage has actually been to call attention to the hidden value embedded in perceptions of companies.

A number of academics have suggested corporate reputation assesses too (Fombrun et al., 2000; Helm, 2005; Schwaiger, 2004; Walsh and Beatty, 2007). Fombrun and the market research company Harris Interactive (HI) have carried out research studies of corporate reputation in the United States and European countries since 1999. The research studies at the beginning relied on the Reputation Quotient (RQ), a 20-items instrument that Fombrun formulated with HI (Fombrun et al., 2000). Fombrun et al. (2000) has conceptualized corporate reputation as a common construct that explains the combination perceptions of multiple stakeholders about a company's performance. Consequently, the RQ measure consists of six items on emotional appeal, financial performance, products and services, social performance, vision and leadership, and workplace environment.

Schwaiger (2004) formulated a six-item corporate reputation assesses which contained affective as well as cognitive dimensions. Helm (2005) designed a ten-item corporate reputation range in Germany. Her model consisted of consumers, employees and investors which been used analyzing an international consumer products producer. Walsh and Beatty (2007) developed a 28-item customer-based reputation (CBR) measurement. They explained CBR as the customer's overall review of a firm based upon his or her impressions to the firm's products, services, network activities, interactions with the company and/or the representatives or even constituencies, for example the staff, management, or other customers and widely known corporate activities (2007). Walsh et al. (2009) reduced their CBR range from 28 to 15 items and thus attested it in the United Kingdom and Germany. Highhouse et al. (2009) explained corporate reputation as a worldwide, temporally dependable, evaluative decision pertaining to a company which is shared by numerous constituencies, and also used generalize ability philosophy to analyze corporate reputation judgments.

Forbes (2007) stated that the Reputation Institute is actually finding out about the dynamics of Reputation for over 10 years. Study signifies that a well-regarded company is much more going to be preferred, trusted, and respected. Reputation Institute created the RepTrak â„¢ Model which offer companies with a standard framework for benchmarking their corporate reputations globally as well as to enable identification of the elements that drive reputations (Forbes.com,2007).

The RepTrak â„¢ Pulse is an emotion-based way of measuring the corporate reputation construct that untangles the drivers of corporate reputation from dimensions of the construct itself (Ponzi, Fombrun & Gardberg, 2011). The RepTrakâ„¢ Pulse determines the level of Admiration, Trust, Good Feeling and Overall Esteem that stakeholders have about companies. The RepTrakâ„¢ Pulse is the beating heart of a company's reputation featuring a total assessment of the health of a company's reputation (Reputation Institute, 2012).

As stated by Forbes (2007), study signifies that a reputation is constructed on seven pillars from which a company is able to do a strategic platform for interacting with their stakeholders by using the most suitable key performance guidelines.

The RepTrak â„¢ Model comprises of seven dimensions which have been identified from qualitative as well as quantitative research to explain the reputation of a company globally (Forbes.com). The seven dimensions are consist of products/services, workplace, performance, leadership, innovation, citizenship and governance (Reputation Institute, 2012).

Explained by Cravan, Oliver & Ramamoorti (2003), the products or services featuring by the company signifies an example of the key means for value creation as well as establishing a brand image by product/service reputation. The product presents the essential interface with the customers and a key driver of corporate reputation. Once the product does not offer significance to the customer nor incorporates a negative quality association, consequently it is very difficult to establish a strong corporate reputation.

Strong branding, product packaging and design of products are essential in bringing in as well as maintaining customers. It is essential to build capabilities in researching, defining, and even building brand and comprehensive program. After all, the brand, packaging as well as the design will portray the promise to customers, apart from depicting the business competitive edge against business competitors. Inside The RepTrak™ Model dimension score for Products/Services are being assess based upon the following arguments, the company offers good quality products and services and also it delivers excellent products and reliable services (Boston College Center for Corporate Citizenship, 2009). 

Products and services are however the most observable representation and appearance of a company in the marketplace as well as the most common indicator of corporate conduct to customers that buy the products which they discover  in marketplace, the media, and also commercials, not to mention the customers that find out about the products from other customers. Product quality contains significant impact in the determination of the company revenue. The relationship on a better product quality may result in raising both production as well as product reliability and consequently an improvement in productivity reduces product cost although an increase in product reliability contributes to the achievement of demanding a higher price (Iwarere & Fakokunde, 2011). Branding for SME is vital since it really helps to distinguish its services and makes the company be recognized in the market. It can be a long way to generate a positive image as well as perception in the eyes of the customer. Branding has a great deal to do with market focus and market positioning. It is actually the important message that the company would like to deliver to the market. Undeniably the message must be supported by strong delivery capabilities. 

Cited from Raja Nazrin's Speech which released in Business Times (2009) stressed "The first thing that must happen is that SMEs must appreciate the exact role that branding has to play. They cannot afford to be just concerned with short-term profitability"(Business Times, 2009). In addition brand-building is a privileged entrepreneurial activity and also responsibility of the brand owner. Brand-building are in fact only successful as soon as companies have a strong sense of purpose and a clear set of values developed by their owners.

Secret Recipe decided on distinctive product and distinctive marketplace. Only a few players who have cake restaurant which inspire customers to walk-in with family and even dine inside the outlet. Bakery was stand for bake cake and yet Secret Recipe took it a step further by creating bakery as fine dining at the same time by catering various other foods apart from cakes . Moreover, their very own product is cake. They focus on to represent Secret Recipe as discover for cake. Their specific unique market as well as product inspires the companies to move further in food and beverages industry while player with few number of business competitors. 

Recently, The Secret Recipe reputation tarnished resulting from the inconsistency of food quality and also service failures in several outlets across Malaysia. Due to that, majority of unsatisfied customers express themselves in what way they really feel by using The Secret Recipe Facebook webpage with regard to their disappointments. Number of studies has proven that good quality service gives advantages to the customer and additionally to the reputation of the company. Customer negative reviews appear based on dissatisfaction with a product, which are able to become an opportunity for a company to strengthen upon its offerings once handled by a quality-oriented service representative. Customer satisfaction is the ultimate way of measuring the quality of a product as well as service. Customer response is usually immediate or deferred. Customers hardly volunteer their evaluation about the quality to the company. Dissatisfied customer sometimes stop to use or pay for services or products without waiting for corrective actions by the organization. Bad service or even product qualities in most cases drive away potential sales and even minimize the market in the future.

The RepTrak â„¢ Model correlates three workplace characteristics with corporate reputation as being rewarding employees fairly, showing concern for employee well being and also offering equal opportunity. This kind of attributes would clearly become more salient predictors of organizational reputation for employees than for different stakeholder groups, while the same is reputation for employees than for other stakeholder groups, and the same would likely be true for Secret Recipe perspective (Vidaver- Cohen, 2007).

The employees usually indicate a corporate reputation is created. Through the behavior of all the employees, at the senior management as well as lower levels, the public derives a perception of the company. In most businesses, when the employees are not devoted to a company, then it is impossible that customers along with other stakeholders are going to be loyal (Cravan et. al, 2003). The exact same situation is applicable pertaining to trust (Sullivan, 1998). Therefore it is vital to assess the employee's point of views of corporate reputation and even overall satisfaction with the company (Cravan et. al, 2003).

Essentially the most dreaded issues maybe a company owner ever really ought to have to deal with is the issues that can potentially arise when a number of the employees are dissatisfied. The dissatisfaction experienced by many employees can sometimes spread just like a disease which may inevitably tarnish the company's external reputation simply by poor production, improper customer service, as well as negative feedbacks or even complaints. Considering the reputation is truly one of a business's top notch selling points, it is crucial for business owners to make sure of their employees are happy and satisfied so they are able to keep on going performing at their maximum levels. As soon as the internal reputation of a business is positive, that feeling will be extended to the outside simply by the actions of your employees, which in turn would greatly have an impact on how your company reputation is viewed by those outside of the company.

A good reputation is a vital asset that enables a firm to generate continuous profitability, or sustained excellent financial performance. Goldberg and Hartwick (1990) propose that the customers who accept the advertising campaign promises much more positively if the reputation of the company delivers the promises. Along common outlines, the marketing literature signifies that a good reputation promotes and even enhances sales force efficiency, new product introductions as well as restoration strategies during crises (Dowling, 2001). A firm's financial reputation provides a persistently strong influence on profit persistence. This simply means an important self-reinforcing dynamic. A number of the things that companies accomplish to increase profitability also boost their reputations (Robert & Dowling, 2002). This reputation improvement, in return, will make it easier for companies to sustain outstanding outcomes in the long run.

In private sector organizations, Reputation Institute experts have realized that Organizational Performance aspects predicting reputation assessments are often linked to economic possibilities - profitability, financial results and growth prospects (Fombrun, 2006). This phrase is inspired by The RepTrak â„¢ Model dimension scores for Performance which based on the following beliefs when the company is a high-performance company, consequently, it will be able to delivers good financial results (Boston College Center for Corporate Citizenship, 2009).

As stated by Neville et al. (2005), a firm's financial performance is likely to be directly and significantly linked to corporate reputation. Moreover, they advise that the positive relationship between corporate reputation and a firm's financial performance definitely will strengthen, as competitive intensity increases. In terms of relationship among stakeholder capability, corporate social performance and the corporate financial performance, they debate that the positive relationship between corporate reputation as well as a firm's financial performance probably will enhance simply because the stakeholder power increases.

One of the Secret Recipe's core value is to be dedication in maximize the higher standard of performance as well as productivity in all areas of company. To drive success of our company, we have to set up intense goals and objectives, give attention to the results as well as an obligation to earn a profit to be able to fit in with the business and growth. We should not harm our future for short-term gain. We can balance our requirement for current earnings with our desire for consistent long-term profitability.

In addition, the company is concentrating on result oriented basis by managing performance within the company and by using customer response is essential to gauge the growth of the company. We consistently evaluate our performance as well as set targets by benchmarking to remain competitive in order to move forward for growth.

Being a business owner-manager, it is essential to become a strong and confident industry leader. This tends to establish the credibility in the perspective of the employees as well as the people that the company dealt with, which enables it to enhance the reputation of the business. Not everybody born as a natural leader, yet as the head of the company, it has been a need to have the capabilities as well as to come across to make sure that they be taken seriously by the employees, business partners and also suppliers. Leadership attributes in The RepTrak â„¢ Model represents as reputation predictors in companies be referred to as a strong and appealing leaders, competent and well-organized management and even clear vision for the future (Vidaver-Cohen, 2007).

Good leadership can enhance the company success and also stimulate a work force to reach the goals (Gaines-Ross, 2004). An essential effort of the communications profession is actually placed on improving the role of the CEO as being the leader of the company or even a major element of reputation for the company. According to Schreiber (2008), Burson-Marsteller did a survey in 2003, resulted that respondents stated that 50 percent of a company's reputation are generally attributable to the CEO. In 1997, when the agency initially did this study, respondents highly recommended that 40 percent of the company's reputation could be resulting from the CEO (Schreiber, 2008).

Cited from the Business Times written by Ping (2008), in any business, leadership is a central feature; nevertheless the form which it takes depends remarkably on a firm's stage of growth. For SMEs this will incorporate taking part in an active position in the management of the company as well as to establish a vision to make sure that the employees to realize exactly where they are heading. Turner (2008) mentioned that large companies, on the other hand, managers might be less involved with the day-to-day managing of the company. The managers possess more leadership roles by developing the objectives that the company desires to reach, as well as considering the strategy to be adopted in order to achieve them (Ping, 2008). However, SME managers require managing the company actively and even set directions for the firm. This is actually not an easy task; indeed, it can be a relatively well-known phenomenon that few start-up entrepreneurs have the capabilities and skills which required them to manage their establishment when it grows beyond the start-up stage (Turner, 2008).

Therefore, Datuk Steven Sim developed the company Mission Statement by emphasized "At Secret Recipe, we continuously attempt to go beyond our commitments, as well as to be known as a leader in our industry. The philosophy of implementing quality and high standards is the utmost essential brand value at Secret Recipe. Our principle continues to be the same in giving the best satisfaction to our valued customers" (Chan, 2009).

Vidaver-Cohen (2007) explained that The RepTrak â„¢ Model associates three reputational attributes with the Innovation dimension in companies by becoming a creative organization , generally will be the first to market, and can adapts quickly to change.

Reputation Institute (2012) claimed that innovation is one of the fundamentals using by the company to build competitive advantage. Therefore, an essential platform companies can depending on to distinguish themselves from business competitors which they develop respect, admiration, and trust from stakeholders. Academic researches provide results that a reputation for innovation contributes to several business and reputational benefits such as customer loyalty, improved favorability, pattern to pay premium price and perhaps most significantly is customer interest (Henard & Dacin, 2010).

The worldwide market will provide new business opportunities for innovation, and new export markets simply by upstream and downstream activities with large companies as well as between SMEs themselves. SMEs have played a central role in improving the private sector and combining into the global economy as an effective solution to reduce poverty in developing countries (Raynard and Forstater, 2002). To get involved efficiently in global markets, SMEs really need to have and retain significant capabilities in different areas which range over the business value chain, which includes production, design and style, distribution, branding, and marketing (Abonyi, 2003).

At the same time, Guillerme (2011) claimed that almost all business sectors are not created equal in terms of creating excitement. In the current context, the task is undoubtedly much easier for a technology company as compared to a large food and drinks company. Although the high-tech industry has created numerous disrupting innovations lately such tablets , applications for smartphones , streaming technologies and many other , yet, the consumer goods industry has actually emphasized on product alterations such as enhanced taste of the foods as well as drinks , varying portion sizes, convenient packaging, and so on (Guillerme, 2011).

Referring to Secret Recipe's business strategy, managing director of Secret Recipe Cakes and Café Sdn. Bhd., Datuk Steven Sim believes that franchising has been an effective approach to expand a business. Even with the economic condition right now, there will be more and more people going into franchising since it features less risk. A well-proven and even successful system when compared with other traditional strategies of doing business leads to the growth of franchising business (Business Times, 2009; Sean Lum, 2009). Franchise concept was not in practice when the business was initially established. The founder previously had utilized his first restaurant as a pilot operation/study to find out weaknesses of the business and then worked out to implement solutions to overcome several difficulties in the real business model (Sean Lum, 2009).

MFA chairman, Dato' Mukhriz Tun Dr. Mahathir stressed franchising is one among the most the best ways for those people wishing to enter the business world mainly because it has a strong , tested and proven system even during economic downturn. Mukhriz's assurance is dependent on the industry's potential to incorporate changes, and people are always interested in franchising (Business Times, 2009; Sean Lum, 2009).

Meanwhile, Datuk Steven Sim seems to have the same opinion that the economic crises will probably providing a wide prospects for franchising. Cited from Datuk Steven Sim interview script stated that "Secret Recipe was established in hard times but we still managed to do it well by bargaining for a less expensive rental and supply, negotiating for longer period of time and better location as the suppliers are now more willing to discuss" by Datuk Steven Sim (Business Times, 2009). He continued to state that the franchisors need to be consistent in sustaining the advertising and promotion campaign to sustain the competitive advantage and the visibility. They should continuously brand it, shout about it as well as be unique. One of Secret Recipe approach in globalization is catering the local taste (Kam, 2009). The CEO of the company explained that they had catered the menu to accommodate local taste. Miraculous in China market whereas the sales significantly rose as soon as they changed their menu to accommodate exactly what the locals prefer.

Citizenship in The RepTrakâ„¢ model which formulated by Fombrun in partnership with the Reputation Institute claimed stakeholders whether or not they consider a company as environmentally responsible , supporting good reasons , as well as having a positive impact on public . A company with a good corporate citizenship is that the company that will gets high recognition on these three attributes. Citizenship is finally an essential part of doing business and it contributes greatly to market the company. A good reputation elicits supportive behaviors from lots of different people who desire to work for company, purchase from, as well as invest in companies they like, trust, and admire (Fombrun, 2007).

According to Fombrun (2007) this mean that citizenship has earned a role in both strategy and execution plan, including which involved in positioning the company with investors, regulators, and even communities. Stated in Boston College Center for Corporate Citizenship (2009), citizenship is a key part of building sustainability in the strategies the company pursues both locally and globally.

In 2008, the Secret Recipe opened 50 job opportunities in the service line to senior citizens as one of the corporate social responsibility (CSR) effort. Due to current economic situation in 2008, the company realized that there might be senior citizen or even retirees looking for jobs to increase their household incomes, in fact it is not easy for them to get employment at their age (Teng, 2008). With this particular project, the company was aiming to alleviate their burden. As reported by the Datuk Steven Sim, the senior citizens who are right now working with the company have participated remarkably to the company success.

These is simply because, most of them are more focused and have a strong sense of dedication as well as commitment to the company. On the subject of corporate social responsibility, Secret Recipe is responsible not merely in delivering quality food but in addition giving back to the community in various ways, for example in terms of sponsorship and also awareness drives . In April 2008 , with cooperation of The Star-NiE ( Newspaper in Education ) program , the company sponsored approximately 10 ,000 copies of The Star from March to November for students of SMK Sultan Ismail , Kota Bahru , Kelantan. (Richard Lim, 2008). Hence, the company is keen on the environment as well. Being a green company, the company been using materials of paperbacks as well as other recyclable materials when serve to the clients.

Governance attributes in The RepTrak â„¢ Model determines three most significant governance attributes as predictors of reputation among the companies simply because transparency, comply with the ethical conduct and fairness in transactions with stakeholders. (Vidaver- Cohen, 2007). Although other governance concerns are essential in terms of overall organizational performance, thus, these three are the ones empirically tested as drivers of reputation (Fombrun, 2006).

Gertsen, Van Riel and Berens (2006) reasoned that issues in governance and accounting generate severe damage to the reputation of a company together with to the individual reputations of the top executives. Restoring reputation normally requires real actions nevertheless it also needs clear communications about what the company did to address the problems and also what are the plans that the company will do to preserve all these problems from reappearing. Almost every circumstance of failure in governance and also accounting was associated with deficiencies in transparency or perhaps intentionally misleading communications. Because of that, building and maintaining a solid corporate reputation needs high levels of transparency (Gertsen et. al, 2006)

A leading and largest café chain in Malaysia , with Halal accreditation awarded by Jabatan Kemajuan Islam Malaysia (JAKIM), Secret Recipe is focused on consistently adhere to the requirements of preparation of all food as well as processing plant in the restaurant accordingly to the regulatory guidelines including HACCP and VHM guidelines.

Studies indicate that a company with an excellent reputation is definitely more going to be favored, trusted, and honored among the stakeholders. Reputation Institute in 2006 then, released the RepTrakâ„¢ Model which offer companies with a standard framework to indicate the level of reputations for a company as well as to determine the elements that build the reputation in a company (Forbes, 2007).

Cited from Reputation Institute (2007), The RepTrakâ„¢ System features is usually to score the degree to which a specific dimension has effects on the "pulse" between certain stakeholder and helps to specify which dimensions have the highest influence so that the company can create support plan and recommendation. The advantage of using the model as a foundation of effective reputation management because it enables companies to define its current perception towards the company and identify key drivers of the company's reputation. (Reputation Institute, 2012)

According to Reputation Institute (2012), The RepTrakâ„¢ Pulse measures the degree of Admiration, Trust, Good Feeling and Overall Esteem that stakeholders hold about the company. The RepTrakâ„¢ Pulse is the beating heart of a company's reputation which provides an overall review of the strength of a company's reputation (Reputation Institute, 2012)

The RepTrakâ„¢ model examines the relationship between the "Pulse" and perceptions of seven dimensions, identified as: (1) Products/Services, (2) Innovation, (3) Workplace, (4) Citizenship, (5) Governance, (6) Leadership, and (7) Performance. Although the Reputation Institute studied identified 23 reputational attributes for the seven predictors, they note that any number of attributes may be salient, depending on the type of company studied or the stakeholder group considered (Fombrun, 2006). The RepTrakâ„¢ Model resulting from this research has been used successfully to study reputation in hundreds of companies worldwide and has recently been adopted by Forbes Magazine in its annual review of the World's Most Respected Companies (Forbes, 2007).

In this research, through further statistical analysis, this study will connects between The RepTrakâ„¢ Dimension scores and The RepTrakâ„¢ Pulse scores in order to identify the factors and implications of corporate reputation Secret Recipe. The findings enable company to understand and take advantage of the dynamics of reputation among the stakeholders (Forbes, 2007).

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