Are there riches in reputation?

Kathryn Merritt, Miller College
Dean Johnson, Michigan Technological University
Srinivasan Sundaram, Ball State University


Building a strong company reputation is time consuming and costly. Alternatively, firms can lose or destroy their reputations through misguided activities, and may do so over a short period of time. Given the market’s ability to gauge the long term reputation strategy of a firm, the announcement of a firm’s reputation could be argued to be a nonevent. On the other hand, the media outlets feature the announcement of a firm’s reputation, reputation management has become an integral part of the consulting industry, and the importance of a firm’s reputation has become a central topic of research. As such, the announcement of a firm’s reputation may be a significant event. We use the Harris Interactive Survey to investigate the reputation effect.