UTS Study Shows A Good Corporate Reputation Equals Greater Business Success

The onus is on MBA-educated business leaders to foster a positive corporate reputation for their companies to ensure success, according to a new study.

The results of the study, according to UTS Business School Associate Professor of Marketing Paul Burke, implied that managers need to be concerned about corporate reputation not only because it builds loyalty and trust, but also because the products and services offered by a reputable business appear more valuable.

“Companies need to work hard to communicate that they are environmentally and socially responsible, support good causes, have a positive work environment, and excellent leadership and financial performance, and do their best to mitigate brand damage,” Professor Burke said.

The study, co-authored by Professor Burke along with UTS Professor Grahame Dowling and Dr Edward Wei, had a retail focus and saw participants give an evaluation of the corporate reputation of several TV makers.

Separately, participants were asked to choose between televisions based on fairly standard features such as warranty, price or size, and in addition by novel features such as backlight control or dynamic range control.

The research showed consumers were willing to pay extra for a product with important features and a good brand reputation, and reputable businesses were reportedly able to command around an overall 9% premium for its products. For example, in the case of screen size, consumers were willing to pay $121 more for a television that was 55” over one that was 50”. This amount increased by a further 22% to $147 for a company that had a more positive reputation.

Despite the retail and marketing focus of the study, it was an important lesson on corporate reputation, which is a vital element in all business no matter the sector and a topic which is taught across several MBA programs across Australia.

It revealed how corporate reputation encompasses a range of dimensions including how people feel about the company, the quality and innovativeness of its products, its workplace environment and workforce, its vision and leadership, financial performance and social and environmental responsibility.

Professor Burke said ultimately, managers need to be concerned about corporate reputation not only because it builds loyalty and trust, but also because the products and services offered by a reputable business appear more valuable.

Greg Peake has been a journalist since 2010 and has covered stories for a range of industries like local government, sport, development and education. Greg joined MBA News in 2016.

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