Reputation management: the new face of corporate

public relations?
James G. Hutton*, Michael B. Goodman, Jill B. Alexander
Christina M. Genest
Silberman College of Business, Fairleigh Dickenson University, Teaneck, NJ 07666, USA
Received 3 March 2001; received in revised form 12 May 2001; accepted 1 June 2001
Abstract
An empirical study of Fortune 500 companies suggests that reputation management is gaining
ground as a driving philosophy behind corporate public relations. Whether the phenomenon is a trend
or a fad is not clear, given the lack of consensus in dening reputation, the instability and questionable
validity of reputation measures, and unanswered questions about when and how (or even whether)
reputation can be managed. Besides reputation management, corporate public relations departments
in the study embraced a wide variety of other denitions of their function, suggesting that public
relations continues to have great difculty in dening itself. While the study did not nd a strong
correlation between reputation and overall spending on corporate communication activities, as had a
similar study the prior year, it did nd some interesting correlations between reputation and specic
categories of spending. 2001 Elsevier Science Inc. All rights reserved.
1. Introduction
In just the past few years, a growing body of academic and practitioner literature has
emerged concerning reputation management [1]. On the academic side, a new journal,
Corporate Reputation Review, was launched in 1997, and several dozen articles on the topic
have been published in other communication and business journals. On the practitioner side,
a public relations trade publication entitled Reputation Management was launched several
* Corresponding author. Tel.: 1-201-692-7241; fax: 1-201-692-7241.
E-mail address: hutton@fdu.edu (J.G. Hutton).
Pergamon
Public Relations Review 27 (2001) 247261
0363-8111/01/$ see front matter 2001 Elsevier Science Inc. All rights reserved.
PII: S0363- 8111( 01) 00085- 6
years ago, while Shandwick [2] and some other major international public relations agencies
have embraced the concept of reputation management in varying degrees.
Noticeably absent from the discussion has been any signicant body of research concern-
ing what corporations are actually doing in the way of adopting reputation management as
a guiding philosophy. Many of the academic studies that have focused on corporations
reputation management activities have tended to simply assume that organizations are
moving toward a reputation management perspective, redening traditional public relations
and communications activities as reputation management. Davies and Miles [3], for example,
found little or no reputation management terminology in job titles or departments, and very
little connection between reputation management theory and the reality of organizations.
They simply assumed that reputation management existed and was a growing function within
the organizations studied, despite the fact that only a small minority of respondents described
their function as reputation management.
The current study provides a brief background and context to the issue of reputation
management, sheds some light on current corporate philosophies concerning reputation
management through an empirical study, and raises a number of questions about reputation
management from both descriptive and prescriptive perspectives. Specic questions ad-
dressed by the study include: Is there a correlation between corporate reputation and
spending on corporate communication activities? How stable is Fortunes reputation mea-
sure? What proportion of large companies are using reputation management as a/the
guiding principle behind their corporate communication activities? Is there a correlation
between an organizations reputation and the role of corporate communication within the
organization?
2. Background
Reputation management, if it is to emerge as a signicant business function, clearly rests
on a foundation of what is traditionally termed public relations, which in recent decades
has become known commonly, in a corporate context, as corporate communication,
corporate affairs, corporate relations and similar terms. In some respects, the introduc-
tion of reputation management as a potential business function has further complicated
what was already a serious identity crisis, in terms of public relations ability or willingness
to dene itself in a consistent manner.
A historical review of public relations denitions [4] suggests that public relations
practitioners and scholars have put forth an extraordinary number of denitions and meta-
phors for the eld, including: lawyer in the court of public opinion, engineer of public
consent, developer of goodwill, builder of public opinion, motivator, persuader, clar-
ier, lubricant, catalyst, interpreter, devils advocate, educator, creator or manipulator of
symbols, news engineer, publicity doctor, perception manager, middleperson, advo-
cate, relationship manager, and reputation manager. While the debate continues, some
scholars and practitioners have expressed strong misgivings about elevating reputation
management above all other denitions on the list:
248 J.G. Hutton et al. / Public Relations Review 27 (2001) 247261
The rise of . . . reputation management, perception management and image manage-
ment appears to be an ominous trend for the eld, partly because they have come into favor
for most of the wrong reasons: the tendency of managers who lack training in public relations
to think in supercial terms like image and perception; the large number of major public
relations rms that are owned by advertising agencies, who tend to be more comfortable with
such terms; and the desire to bury the negative connotations of public relations, once and
for all [5].
Further, David Finn [6], Doug Newsom [7] and others have pointed out that concepts such
as reputation and image are not generally something that can be managed directly, but
are omnipresent and the global result of a rms or individuals behavior. Attempting to
manage ones reputation might be likened to trying to manage ones own popularity (a rather
awkward, supercial and potentially self-defeating endeavor).
On the other hand, some advocates see reputation management as a guiding new force or
paradigm for the entire eld, in keeping with Warren Buffets admonition that losing
reputation is a far greater sin for an organization than losing money. The most common
concerns of reputation-management advocates revolve around measures of reputation man-
agement, which have been criticized as unstable and invalid (in terms of construct validity,
discriminant validity and other types of statistical validity). A number of observers have
suggested that reputation is a meaningful concept only as it applies to specic audiences or
publics, and that no across-the-board measure of reputation is or can be valid for all
stakeholders.
3. The study and methodology
The authors were enlisted by the Council of Public Relations Firms, with the endorsement
of the Arthur Page Society, to conduct a study focusing primarily on the relationship between
corporations reputations (as measured by the Fortune most-admired companies list) [8]
and the companies spending on corporate communication activities. As part of the study, the
authors also collected and analyzed some basic data concerning the corporations commu-
nication departments, department management, budgets, stafng, and use of outside vendors.
Finally, the authors gathered respondents views on the role(s) of corporate communication
within their own organizations.
The sampling frame for the study was Fortune 500 companies, supplemented by a list of
companies represented by members of the Arthur Page Society, an organization of top
corporate communication executives. (Many of the companies represented by Arthur Page
Society members are also Fortune 500 companies.)
The original survey was mailed with a cover letter from Jack Bergen, president of the
Council of Public Relations Firms. Respondents were informed that their responses were
condential and that no specic answers to questions would be seen by the Council of Public
Relations Firms, the Arthur Page Society or anyone other than the principal researchers.
Three follow-up waves of communication were administered: a postcard reminder, a
second survey form, and a phone call. In some cases, a fourth follow-up was conducted, in
249 J.G. Hutton et al. / Public Relations Review 27 (2001) 247261
the form of a faxed or mailed survey form to those who had discarded or misplaced the
original survey forms.
Of the original 619 potential respondents on the list, approximately 20 were eliminated
from the sample for a variety of reasons (for example, a few companies were essentially
holding companies that had virtually no staff). Seventy-two of the approximately 600
remaining surveys were completed and returned, a response rate of 12%.
Responding companies represented 51 different industries. All but one of the respondents
had revenues of $1 billion or more, ranging up to about $60 billion.
The term corporate communication was dened in the study as the overall internal/
external communication function of the organization (sometimes referred to in various rms
as public relations, corporate relations, etc.).
4. Findings and discussion
4.1. Corporate communications functions
As shown in Table 1, the most common functions included in corporate communication
budgets were media relations (listed by 96% of respondents), crisis communications (89%),
annual and interim reports (85%), the budget for outside PR agencies (85%), employee
Table 1
Functions included in corporate communication budgets (percentage of companies)
Media relations 96%
Crisis communications 89%
PR agency 85%
Annual/interim reports 85%
Employee communications 83%
Speeches 82%
Newsletters, etc. 79%
Corporate identity 64%
Internet 63%
Community relations 58%
Issues management 58%
Editorial services 56%
Intranet 56%
Corporate advertising 51%
Marketing communications 45%
Corporate sponsorships 44%
Corporate philanthropy 43%
Ad agency 42%
Foundation funding 35%
Government relations 33%
Brand management 32%
Investor relations 29%
Industry relations 24%
Training 13%
Labor relations 3%
250 J.G. Hutton et al. / Public Relations Review 27 (2001) 247261
communications (83%), speech-writing (82%) and organization publications such as news-
letters (79%). Near the bottom were such functions as foundation funding (35%), govern-
ment relations (33%) and investor relations (29%).
4.1.1. Discussion
Despite much talk in the eld about integrated communications, Table 1 suggests that
corporate communications is continuing to disintegrate, in terms of the scope of its respon-
sibility. In particular, corporate communications continues to lose responsibility for manag-
ing the communication or relationships with some key audiencessuch as government
representatives and current/potential investorsto other functional departments within their
organizations. Such disintegration is a very serious problem, to the extent that it greatly
complicates an organizations ability to manage its reputation (or its ability to manage overall
communications or overall stakeholder relationships). Will, Probst and Schmidt [9], among
many others, have asserted that corporate communications functions need to be more
integrated.
4.2. Corporate communications budgets
Corporate communication budgets of companies in the study ranged from $285,000 to
$150 million, with a mean of $21.6 million and a median of $7.5 million. Among those
companies whose budgets included them, the following were the largest line items (as shown
in Table 2): corporate advertising ($11.4 million, on average), foundation funding ($8.1
million), social responsibility ($4.6 million, including community relations, nonfoundation
funding, etc.), government relations ($4.2 million), employee communications ($2.6 million)
and investor relations ($2.1 million).
Among those companies that had a budget for external agency support, the average budget
for agency support was about $2.4 million. The most common assignments given to outside
vendors were annual reports (71%), product advertising (51%), media relations (51%),
Table 2
Spending by category (average spending among those companies whose budget includes the given category)
Corporate advertising $11,371,000
Foundation funding 8,146,000
Social responsibility* 4,650,000
Government relations 4,243,000
Other** 3,288,000
Employee communications 2,570,000
Investor relations 2,127,000
Department management 1,676,000
Corporate identity 1,352,000
Media relations 1,306,000
Annual/quarterly reports 1,012,000
Industry relations 431,000
Executive outreach 270,000
* Community relations, nonfoundation funding, etc.
** Includes member relations, graphic design, special events, etc.
251 J.G. Hutton et al. / Public Relations Review 27 (2001) 247261
publicity (49%), corporate advertising (44%), Internet communications (43%), corporate
identity (40%), marketing communications (38%) and crisis communications (36%).
4.2.1. Discussion
As can be seen in Table 2, a very large percentage of many corporations communication
budgets is concentrated in key areas such as corporate advertising, foundation funding and
social responsibility (community relations, nonfoundation funding, etc.).
4.3. Relationship between reputation and spending on corporate communication activities
Unlike a similar study conducted a year earlier by Thomas L. Harris/Impulse Research
[10], the current study did not nd a smooth, consistent relationship between corporate
communication spending and reputation (as measured by Fortunes most admired com-
panies study) [11]. The overall correlation between spending and reputation was only 0.24.
The results were further complicated by the fact that there was a signicant correlation
(0.23) between company size and reputation. When company size (as measured by revenues)
was statistically controlled for, the correlation between reputation and overall spending on
corporate communications activities dropped to 0.11. In other words, there was a modest
correlation between reputation and spending on communication activities, but most of that
was accounted for by the fact that larger companieswhich presumably benet from greater
visibilitytended to have better reputations.
When broken down into quintiles (that is, Top 100 most-admired companies, second 100,
third 100, etc.), companies ranking 201300 on the most-admired list actually spent signif-
icantly more on corporate communication activities (an average $22 million) than those that
ranked in either the Top 100 or the second 100. (This nding was in clear contrast to the
previous years Harris/Impulse study, in which there was a stair-step pattern where the ve
reputation quintiles showed a clear progression of increasing reputation as spending on
corporate communication activities increased.)
Nevertheless, when comparing Top 200 with Bottom 200 rms among the Fortune
most-admired list, there appeared to be a substantial difference in spending on corporate
communication activities. The median budget for Top 200 companies was $11 million, while
the median for Bottom 200 companies was $1 million. Moreover, no company with a
relatively large corporate communication budget (greater than about $5 million) had a poor
reputation (less than 5 on Fortunes reputation scale, among a list of companies that ranged
from about 4 to 8). These two ndings together suggest that relatively large expenditures on
corporate communication may provide a kind of reputation insurance for big corporations.
In addition, while there appears to be a relatively weak overall correlation between total
spending and reputation, some specic types of spending appear to correlate rather strongly
with reputation, even when controlling for company size (see Table 3). Interestingly,
foundation funding topped the list, with a correlation of 0.69. In other words, the greater an
organizations charitable-foundation giving, the stronger its reputation tended to be.
Expenditures for investor relations, executive outreach and media relations were the other
categories that correlated highly with reputation (at a statistically signicant level). The high
252 J.G. Hutton et al. / Public Relations Review 27 (2001) 247261
correlation between investor-relations spending and reputation was driven largely by one
company that had extremely large investor relations expenditures and a very high reputation.
In a few categories (social responsibility, corporate advertising and industry relations), the
correlation between spending and reputation was actually negative.
4.3.1. Discussion
The rather stark differences in ndings between the previous years study and the current
study are a bit perplexing. Unlike the very clear correlation between reputation and com-
munication spending found in the previous year, the current study found only a modest
correlation, which was reduced even further when company size was controlled for. At rst,
the researchers felt that part of the explanation might lie in the rather low response rate in
both studies, the potential for a few extremely large budgets to skew results somewhat,
and/or the fact that various individual budget items varied considerably in their correlation
with reputation.
In looking at other recent research, however, it was discovered that a similar study by Kim
[12] found a relatively similar correlation (0.34) between communication spending and
reputation. (Curiously, Kim did not control for the correlation between company size and
reputation, which was similar (0.18) to the current study. Indeed, he concluded that an
increase in communication spending caused both an increase in reputation and an increase
in revenues, and that an increase in revenues caused an increase in market sharesimply
assuming that correlation equaled causality, in each case. Also alarming was that his
discussion and conclusions ignored the contradictory nding that reputation was negatively
correlated with market share.)
Upon closer inspection of the current study, it appears, too, that the largest explanatory
factor for the difference between the prior years study and the current study can be found
in the instability of the reputation measure itself, rather than in response bias or other
anomaly of the two studies. Despite repeated claims in articles by Fortune, the Wall Street
Journal [13] and other publications that reputation scores appear to have great staying power,
that does not appear to be the case. One need only look at the reputation scores of a company
like Apple to see how ckle reputation can be (bouncing from as high as 7.16 to as low as
Table 3
Correlation between reputation and specific types of spending (controlling for company size)
Foundation funding .69*
Investor relations .63*
Executive outreach .39*
Media relations .35*
Annual/quarterly reports .24
Corporate identity .24
Employee communications .23
Government relations .01
Social responsibility (community relations, etc.) .19
Corporate advertising .19
Industry relations .68*
(* p .01)
253 J.G. Hutton et al. / Public Relations Review 27 (2001) 247261
3.73 in recent years in Fortunes reputational ranking system). Historical analysis of the
annual Fortune most-admired lists revealed the following generalizations:
Y Of approximately 399 companies that appeared on both the 1999 and 2000 lists,
approximately 166 (42%) moved up or down at least one quintile in the reputation
rankings. Approximately 28 companies (7%) moved more than one quintile in the
ratings.
Y Of approximately 361 companies that appeared on the list in 1998 [14], 1999 and 2000,
approximately 164 (45%) experienced a change of 0.5 or greater in their reputation
score from 1998 to 1999, from 1999 to 2000, or both. While that may not seem like a
signicant change, the range of reputation scores was only about 3 to 8.5, depending
on the year, with an average 20
th
80
th
percentile range of 5.4 to 7.0.
Y Taking an even closer look at the 361 companies that appeared on the list in 1998, 1999
and 2000, there appeared to be a general regression toward the mean: Of the top 25
companies in 1998, six had declined at least a full point by 2000; of the bottom 25, nine
had improved at least a full point by 2000.
Y Longer term, of the 184 companies that appeared on both the 1990 [15] and 2000 lists,
50 (27%) moved up or down at least a full point. (This gure probably underestimates
the instability of the reputation measure over those 10 years, given that many of the
least successful companies dropped off the list altogether because they became too
small to make the list or because they were acquired by stronger companies.)
Regarding the categories (social responsibility, corporate advertising and industry relations)
where the correlation between spending and reputation was actually negative, the explanation is
unclear. It is possible, however, that those categories of expenditures could be more reactionary
in nature (in response to corporate problems or crises) rather than proactive. In other words, one
theoretical explanation for the ndings in Table 3 is that there may be (a) a strong correlation
between reputation and proactive communication spending (i.e., largely discretionary spending
such as charitable giving, investor relations, executive outreach and media relations), (b) mod-
erate correlation between reputation and routine spending on communication activities (i.e.,
largely routine or even legally required communication in the form of annual reports, employee
communications and corporate identity), and (c) a negative correlation between reputation and
spending on communication activities that often are reactionary in nature (e.g., social responsi-
bility, corporate advertising, industry relations). If so, the correlation between reputation and
proactive types of communication expenditures may not be readily apparent because they may be
offset by some other types of communication expenditures that correlate negatively with repu-
tation (analogous to a suppressor variable, in statistics).
4.4. The role of corporate communications
One question in the study asked survey respondents to rank-order a set of eight phrases
that described various philosophies of corporate communications, in terms of the overall role
of the function within their organization. As can be seen in Table 4, managing reputation
was the leading philosophy among the corporate communications departments who re-
sponded to the survey, followed by managing image. In the middle of the pack were
254 J.G. Hutton et al. / Public Relations Review 27 (2001) 247261
advocating company policies, informing the public, driving publicity and managing
relationships with noncustomer publics. Least popular were managing relationships with
all publics and supporting marketing and sales. Worth noting is that all eight of the
philosophies posited to respondents were ranked everywhere from #1 to #8, with a few
people rejecting all of the choices given to them, and adding other ideas.
Interestingly, companies with certain corporate communication philosophies were more
likely to have strong reputations (see Table 5). Specically, the more companies focused on
managing relationships with noncustomer publics or reputation management as their
guiding communication philosophy, the more likely they were to have a strong reputation.
Conversely, the more a department sees its function as managing relationships with all
publics or supporting marketing and sales, the less likely it is to have a good reputation.
Another question in the survey asked respondents, directly, what the most important role
of corporate communication was in their organization. As can be seen in Table 6, reputation
management was the leading vote-getter, with about a third of the votes; all seven other
options (plus other) received at least some support.
4.4.1. Discussion
The nding that some philosophies of corporate communication may be better than
others, in terms of driving reputation, is intriguing. While the statistical signicance of these
ndings is modest, they should be explored more fully in future studies, and practitioners
Table 4
Ranking of corporate communication roles (based on respondents rank-ordering of eight options)
Average rank*
Manage reputation 2.6
Manage image 3.6
Advocate company/policies 4.2
Provide information to publics 4.3
Drive publicity 4.7
Manage relationships with non-customer publics 4.7
Manage relationships with all publics 5.4
Support marketing and sales 5.9
* the lower the number, the higher the ranking
Table 5
Correlation between reputations and various corporate communication roles*
Manage relationships with non-customer publics .23
Manage reputation .21
Drive publicity .03
Provide information to publics .02
Advocate company/policies .05
Manage image .07
Manage relationships with all publics .19
Support marketing and sales .27
* none signicant at p .05
255 J.G. Hutton et al. / Public Relations Review 27 (2001) 247261
might be wise to spend more time contemplating and debating their functions fundamental
purpose within organizations.
The issue of how public relations or corporate communications should be dened has
been a major issue within the eld for many years. The ndings of this studyidentifying
widely disparate views of the functions purposeconrm that it continues to be a major
issue. Certainly, different philosophies may be appropriate for different companies or
different industries or different business environments. But if communication professionals
cannot come to some sort of consensus about their fundamental role in big corporations, or
an understanding of when various philosophies may be appropriate, it seems likely they will
continue to have difculties dening and explaining themselves to top managements and to
people in other elds.
5. Questions and directions for future research
In looking to the future, those who advocate reputation management as a guiding
philosophy of corporate communications need to address some very hard questions raised by
the current study and an analysis of the reputation management literature.
Y Can reputation be managed, in a traditional business sense? If so, how much control
do corporate communication departments have over reputation, relative to other cor-
porate activities?
Conceptually, it is unclear whether reputation can be truly managed, given that many
scholars and practitioners believe that reputation is the outcome of all of an organizations
activities. Of the 10 major dimensions of reputation, as advocated by Jeffries-Fox [16], very
few are signicantly affected or under the control of the public relations/corporate commu-
nications function. With little or no authority over most of those dimensionsnancial
performance, quality of employees, organizational ethics, quality of products, and so
forthit remains an open question whether public relations departments would be wise to
claim that they are managers of the organizations reputation. Besides being a dangerous
claim, politically, with the potential to be blamed for the overall failures of their organiza-
tions, heads of public relations departments risk the perception that they are simply acting as
Table 6
Single most important role of corporate communications in respondents organizations (percentage of
companies)
Manage reputation 32%
Advocate company/policies 16%
Provide information to publics 15%
Manage image 12%
Manage relationships with non-customer publics 9%
Drive publicity 7%
Manage relationships with all publics 4%
Support marketing and sales 2%
Other 4%
256 J.G. Hutton et al. / Public Relations Review 27 (2001) 247261
spin doctors for the organizations activities. The claim that public relations departments are
in charge of reputation or perception management is even more suspect than it was 10 or 20
years ago, when heads of corporate public relations were much more likely to be in charge
of a broader range of communication activities (including things like government relations
and investor relations).
Conversely, however, if an organization sincerely embraces reputation as a driving force
for all of its activities, the head of public relations might elevate himself or herself into a key
role of strategic planning and management as the overseer of organizational reputation. An
example might be Unisys, which regards reputation as one of the three cornerstones of its
corporate mission and culture. How many other companies would be willing to grant such
a role to reputation management and to public relations is debatable.
Y If reputation management is to be the guiding philosophy of many large corpora-
tions, how should it be measured?
The instability of the Fortune reputation ratings is of very serious concern, from the
perspectives of both theory and practice, given that the ratings are probably the most widely
cited and analyzed measure of reputation. A critical research question is whether the
instability of the reputation measures is primarily a function of (a) deciencies in Fortunes
measurement scale, or (b) inherent instability in the basic concept of corporate reputation. If
the answer is a, then adoption or creation of better measurement systemsincluding
longitudinal studies and more-sophisticated research methods such as time-series analysis
might solve most of the problem. If the answer is b, however, corporate reputations may
turn out to be too ckle to be particularly useful as a management concept.
Conceptually, there are further problems with the way in which reputation has been dened
and operationalized. Specically, most reputation measures have been operationalized as a
combinatory variable. Fortune, for example, denes reputation as the sum of eight individual
measures relating to nancial performance, product quality, and so forth. That approach appears
to be misguided, in terms of capturing the reality of reputations, which are generally global
perceptions (not the sum of several individual perceptions) that may vary rather dramatically by
individual and by stakeholder group. Given that a persons perception of an organization is not
some mathematical formula but usually an overall, affective impression, a much more realistic
operationalization of reputation would be based on a global measure, not a combinatory variable.
Researchers could then attempt to identify the antecedents that correlate most strongly with
reputation (e.g., nancial performance, social responsibility or customer satisfaction). An even
more appropriate research strategy would be to start with the bottom-line stakeholder behaviors
of interest and work backwards, to determine what factors (perhaps including reputation) corre-
late most strongly with those behaviors.
Y Is reputation the most relevant concept, from a management perspective? Is reputation
management an enduring concept in the same way that relationships and brands are?
Even if reputation turns out to be a fairly stable, valid and measurable concept, its unclear
whether reputation incorporates the same kind of loyalty and forgiveness (critical to long-term
success and stability) that come with brands and relationships. So, while few would doubt that
reputation plays some role in the process, it is unclear whether it should serve as the basis for
257 J.G. Hutton et al. / Public Relations Review 27 (2001) 247261
strategy. Reputation is a concept far more relevant to people who have no direct ties to an
organization, whereas relationships are far more relevant to people who are direct stakeholders
of the organization (employees, customers, stockholders and others, who usually are the orga-
nizations most important publics). In other words, a reputation is generally something an
organization has with strangers, but a relationship is generally something an organization has
with its friends and associates. Brands represent the middle ground between relationship and
reputation, to the extent that brands embody strong elements of both concepts and are very
relevant to both types of peoplethose who have direct ties to the organization, and those who
dont.
Y How central is reputation to the larger issue of accomplishing organizational goals? Is
it the core concept or just a piece of a larger puzzle?
Just as public relations practitioners have had a tendency to treat communication, per se, as
though it were the ultimate goal, there is a danger that they will treat reputation, per se, as
the ultimate goal. Whatever the immediate objectiveimproved communication, stronger
relationships or enhanced reputationit is only relevant to an organization insofar as it
affects bottom-line behaviors of relevant stakeholders, and helps accomplish overall orga-
nizational goals. Little research, to date, has tied reputation to bottom-line behaviors or
measures of organizational goals. Most typically, reputation researchers have claimed sig-
nicant correlations between reputation and nancial performance; unfortunately, such
studies are largely meaningless and circular in their logic, given that the Fortune and other
reputation measures they are studying are largely dened by nancial performance.
Just as marketers and advertisers have developed rather sophisticated, standardized met-
rics for concepts such as brand equity, the communications eld needs to develop more
sophisticated, more standardized and more valid metrics for bottom-line outcomes such as
the effects of corporate communication on stock price, cost of capital, the media, government
entities, current and future employees, and current and future business partners. In the
process, public relations researchers have much work to do in identifying the mediating role
that reputation may play.
Y Under what circumstances should reputation management be the guiding philosophy of
an organization or agency?
Further research also needs to be conducted regarding the circumstances under which reputation
is most relevant to an organization. For example, if one agrees with the previous assertion that
reputations are more relevant to strangers, and relationships are more relevant to friends and
associates (i.e., individuals who have direct knowledge of and/or contact with the organization),
reputations are probably more relevant to organizations that depend upon a constant stream of
new customers, donors, employees or other stakeholders. For example, a good reputation might
be paramount to organizations like universities, which depend upon continual replenishment of
students for their success, while reputations might be less important to organizations that have
relatively few and longstanding relationships with key stakeholders.
Y How important are celebrity CEOs to organizational reputations, given the strong
correlation between the two?
258 J.G. Hutton et al. / Public Relations Review 27 (2001) 247261
A consistent nding is that the most reputable or most admired companies, according to
studies by Fortune, the Financial Times and many other publications and research organi-
zations, tend to have well-known CEOs (e.g., Microsoft, AOL, Southwest Airlines, General
Electric, Berkshire Hathaway, Intel). The direction of causality is extremely difcult to
determine: Is the CEO famous because the company is so reputable, or is the company so
reputable because the CEO is famousor both? If making an organizations CEO a celebrity
drives reputation, the implications are intriguing. Among the key questions: Should an
organization devote substantial communication dollars to making the CEO famous? What
happens to the organizations reputation when the CEO leaves or retires?
Y Should public relations abandon relationships as its central tenet, in favor of reputa-
tion, when marketing and other elds are focusing on relationships?
It seems very odd, indeed, that public relations seems to be abandoning relationships as its
central paradigm, at precisely the time that marketing is largely redening itself in terms of
relationship management. Curiously, the foray into reputation management is not being led
by public relations scholars or theorists, but by scholars from human resources and other
elds who appear to know little about public relations and appear to have little respect for
the eld, but seem to be trying to reinvent public relations under the guise of reputation
management. For example, Charles Fombrun, editor of Corporate Reputation Review and
probably the person most responsible for the attention given to reputation management, sees
human resources as the role model for public relations [17], and concluded from his research
that the lower a companys visibility in the media, the better its reputation [18] (a nding
contradicted by other researchers [19], as well as the experience of almost anyone practicing
in the public relations eld). Indeed, Fombrun has essentially ignored or dismissed the body
of public relations history and thought in his advocacy of reputation management. In
reviewing six distinct literatures that were converging in their emphasis on corporate
reputations as key but relatively neglected features of companies and their environments,
Fombrun and Van Riel [20] considered economic, strategic, marketing, organizational,
sociological and accounting views, but not communication/public relations.
Y In the nal analysis, is reputation management really the most appropriate guiding
philosophy for the eld of public relations?
Not a single major textbook in the eld denes public relations as reputation management.
Indeed, a number of prominent scholars and practitioners in the eld have suggested that
reputation is not something that can be managed directly, and therefore is not the most
appropriate objective of public relations. Some have argued strongly for alternative philos-
ophies or roles for public relations, such as relationship management [21]. Yet reputation
management was identied in the current study as the most common role for public relations
in the big corporations responding to the survey. The disconnect is not easy to explain. Are
public relations scholars simply so out of touch with the business world that they are years
behind in their thinking, or are they being inappropriately ignored by practitioners? Are
many heads of corporate public relations simply becoming more enlightened in redening
their role within organizations, or are they latching onto a fad that is taking them down a
primrose path? Or is there some altogether different explanation?
259 J.G. Hutton et al. / Public Relations Review 27 (2001) 247261
Only time will tell whether reputation management will exacerbate or help solve public
relations longstanding identity crisis and inability to dene itself. Critics suggest that
reputation management will lead public relations even further toward a supercial role of
spin-doctoring and image making, in an ill-fated attempt to manage something that is
essentially unmanageable or at least not within the control of the public relations function.
Advocates of reputation management see it as a galvanizing concept that will enhance public
relations stature, perceived value and central role within organizations. Centrists believe it
represents one role for public relations within organizations, more appropriate to some
situations and some organizations than others.
If reputation management is the new face of corporate public relations, the implications
for public relations research, education and practice are enormous. Under any scenario, the
ndings of the current study suggest a tremendous need for discussion, contemplation and
debate, given the many conceptual problems with dening and measuring reputation, the
disconnect between most public relations literature and the prevailing philosophies of many
practitioners, and the wide range of current practitioner philosophies.
Acknowledgments
The authors wish to thank the Council of Public Relations Firms (Jack Bergen, President,
and Sarah Drennan, Vice President of Operations) and the Arthur Page Society for their
contributions to this research.
Dr. James G. Hutton is an associate professor of marketing and communication at
Fairleigh Dickinson University (FDU) and a former director of corporate and nancial
communications for three major multinational corporations.
Dr. Michael B. Goodman is a professor of communication and director of the Corporate
Communication Institute at FDU.
Jill B. Alexander and Christina M. Genest were graduate assistants at FDU when the
research was conducted.
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