Reputation and Strategy: Thinking Comes Full Circle Reply


I was fascinated to see that leading business strategy thinkers are beginning to think of reputation as a driver of strategy and and just a consequent.

A talk on Monday morning by Nicolaj Smiggelkow, the Don M. Knott Professor at the Wharton School, listed corporate reputation as a force which drives strategy. Just to put this in context, the #1 force which might disrupt markets and require a strategic shift were #1 supply of natural resources (short supply) and #2 speed of globalization (slowing?).  #3 was trust in large corporations.

Traditionally, we tend to think of communication as a handmaiden to philosophy.  In the business world this means communication (which is used to foster a good corporate reputation) is the execution side of strategy.  We cannot effectively meet our strategic goals if stakeholders do not understand what we are trying to do and why.  Professor Smiggelkow’s talk, however, brings this thinking full circle to list reputation and trust as forces shaping strategy.

Allow me to write aloud, if you will, as I begin to think through this idea and Porter’s 5 forces.  If strategy’s purpose is to in some advantageous way to my company diminish the forces of buyers suppliers, new entrants, substitutes, and rivals…then reputation should (we academics need research to support assertions) impact this dynamic.

  • Does reputation impact the willingness to pay?  Perhaps Apple is a good example of people willing to pay and discouraging the customer’s willingness to pay for Nokia or Microsoft phones.
  • Will switching costs increase, in social terms, for leaving Apple.  The cool crowd has iPad and iPhone.
  • Will your ability to acquire capital be improved improve (costs go down) with a good reputation?
  • Do companies suffer unequal access to distribution if you have a poor? 
  • Do companies experience a less restrictive regulatory environment with a better reputation?
  • Does the likelihood of retaliation increase or decrease with a better reputation (my gut reaction is–both).

These are just a few of the immediate ideas that come to mind.  From my vantage point, I hold the perception that we do not typically think about reputation in these terms.  we are largely, as practitioners and academics, held to the handmaiden perspective. 

Someone could build a decade-long research agenda around these questions above. I am also thinking we could ask equally interesting questions about how crowdsourcing serves as a force reshaping the environment and thus corporate strategies.

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