Edited by Jonathan P. Doh and Stephen A. Stumpf
Chapter 4: The Leadership Challenge: Building Resilient Corporate Reputations
Charles J. Fombrun It is a terrible thing to look over your shoulder when you are trying to lead – and ﬁnd no one there. (Franklin D. Roosevelt) Introduction The corporate scandals of 2001–4 made household names out of previously large but relatively obscure companies like Enron, Worldcom, Tyco, Adelphia and Arthur Andersen. Most of these scandals can be traced to deﬁcient organizational cultures that placed individual self-interest above the institutional interests they were hired to defend. They point to a fundamental ﬂaw in late 20th-century models of organization that spurred executive hubris, promoted celebrity over leadership and, in the process, dramatically failed to serve the interests of employees, investors and customers. In this chapter, I suggest that organizations with responsible leaders at the helm are those that value reputation and manage them as rent-producing economic assets. Drawing on original research conducted by the Reputation Institute, a private research group I founded in 1999, I demonstrate that well-regarded companies rely on a model of leadership that recognizes the interests of multiple constituencies, values how well these constituencies are served, monitors their perceptions and expresses itself to them abundantly, consistently and with authenticity and transparency. Reputation: a crossroads of literatures A corporate reputation is a collective representation of a company’s past actions and future prospects that describes how key stakeholders interpret a company’s initiatives and assess its ability to deliver valued outcomes (Fombrun, 2001). This definition is rooted in convergent perspectives advanced by economists, strategists, organization theorists and marketers. To...
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