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The Reputation Institute 111 Fifth Avenue, 8 th floor New York, NY 10001 Telephone 212-998-0211 Fax 212-443-1006 1 Craig E Carroll The University of Texas.

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Presentation on theme: "The Reputation Institute 111 Fifth Avenue, 8 th floor New York, NY 10001 Telephone 212-998-0211 Fax 212-443-1006 1 Craig E Carroll The University of Texas."— Presentation transcript:

1 The Reputation Institute 111 Fifth Avenue, 8 th floor New York, NY Telephone Fax Craig E Carroll The University of Texas at Austin Media Literacy and Auditing Corporate Reputation

2 The Reputation Institute 111 Fifth Avenue, 8 th floor New York, NY Telephone Fax What is corporate reputation? What is corporate reputation?

3 The Reputation Institute 111 Fifth Avenue, 8 th floor New York, NY Telephone Fax A Workable Definition Corporate reputation refers to what the public perceives is salient about the firm or its characteristics (Fombrun, 1996). Corporate reputation refers to what the public perceives is salient about the firm or its characteristics (Fombrun, 1996).

4 The Reputation Institute 111 Fifth Avenue, 8 th floor New York, NY Telephone Fax Multi-Dimensional Nature of Reputation Products & Services Financial Performance Social Responsibility Vision & Leadership Workplace Environment Emotional Appeal

5 The Reputation Institute 111 Fifth Avenue, 8 th floor New York, NY Telephone Fax Why is Corporate Reputation important? People invest companies based upon reputation. People invest companies based upon reputation. People want to work for a company with a good reputation. People want to work for a company with a good reputation. People buy products or services from companies based on their reputation. People buy products or services from companies based on their reputation. People give “pause” and weigh incoming information against companies with good reputations. People give “pause” and weigh incoming information against companies with good reputations.

6 The Reputation Institute 111 Fifth Avenue, 8 th floor New York, NY Telephone Fax The relationship between RQ and change in market value is not symmetrical: Note:Stock prices and share volumes were examined on September 1, 1999 and October 1, 2000.

7 The Reputation Institute 111 Fifth Avenue, 8 th floor New York, NY Telephone Fax

8 The Reputation Institute 111 Fifth Avenue, 8 th floor New York, NY Telephone Fax How are ‘corporate reputations’ formed? Direct Experience Direct Experience The Mass Media The Mass Media

9 The Reputation Institute 111 Fifth Avenue, 8 th floor New York, NY Telephone Fax You cannot manage what you cannot measure…. You cannot manage what you cannot measure….

10 The Reputation Institute 111 Fifth Avenue, 8 th floor New York, NY Telephone Fax Gathering Stories —Companies monitor their media coverage via news aggregators such as Lexis- Nexis. Topical index terms include both company names and subject headings. 2.Building a Database of News —Each story in which the company is mentioned is streamed into a database; its position within the paper/magazine, publication name, date (plus time for broadcast), and the corresponding circulation or audience figure of the particular media are identified. 3.Developing Dictionaries and Rules —The rules through which stories are coded involve much more than a simple list of search words. Coders “train” the computer to recognize the complex ideas being tracked through a series of transparent tests and retests on random samples of stories. 4.Coding Stories — Once the dictionaries and rules are built and tested, each story is then scored for content that is relevant to any of the reputational attributes. These ideas are then summarized as they relate to each company mentioned in each story to identify the “tone” of writing about the company in each story. Auditing Corporate Reputation vis-à-vis Media Monitoring

11 The Reputation Institute 111 Fifth Avenue, 8 th floor New York, NY Telephone Fax Measuring Media Coverage Prominence Prominence Salience Salience

12 The Reputation Institute 111 Fifth Avenue, 8 th floor New York, NY Telephone Fax The prominence of media coverage devoted to particular companies affects the salience of these companies and their attributes in the minds of the public. The prominence of media coverage devoted to particular companies affects the salience of these companies and their attributes in the minds of the public. Salience would occur in a number of ways: Salience would occur in a number of ways: which companies are thought about in the first place, how they are thought about (favorably or unfavorably), which companies are thought about in the first place, how they are thought about (favorably or unfavorably), which issues described in connection with the firm’s name best describe the firm’s reputation, which issues described in connection with the firm’s name best describe the firm’s reputation, and whether the firm falls favorably or unfavorably in terms of these issues. and whether the firm falls favorably or unfavorably in terms of these issues.

13 The Reputation Institute 111 Fifth Avenue, 8 th floor New York, NY Telephone Fax Frequency Tone Well Above Average Well Below Average Average Comparative Media Performance Frequency

14 The Reputation Institute 111 Fifth Avenue, 8 th floor New York, NY Telephone Fax Example: Emotional Appeal Company: SR Group Estimated Number of Articles: 65 Number of Articles Reviewed: 40 Sources: Magazines, Journals and Newspapers

15 The Reputation Institute 111 Fifth Avenue, 8 th floor New York, NY Telephone Fax Example: Summary Chart Emotional Appeal Low High CompanyCompetitor 1Competitor 3Competitor 4Competitor 2

16 The Reputation Institute 111 Fifth Avenue, 8 th floor New York, NY Telephone Fax Emotional Appeal High Low High Media Exposure Example Competitive Map CompanyCompetitor 1Competitor 3Competitor 4Competitor 2

17 The Reputation Institute 111 Fifth Avenue, 8 th floor New York, NY Telephone Fax Media exposure as a proxy for corporate reputation may not be as clear cut as a first glance may indicate. Media exposure as a proxy for corporate reputation may not be as clear cut as a first glance may indicate.

18 The Reputation Institute 111 Fifth Avenue, 8 th floor New York, NY Telephone Fax views of the media 1: Reflects no distortion. 1: Reflects no distortion. 2: Influenced by media workers’ socialization. 2: Influenced by media workers’ socialization. 3: Influenced by media routines. 3: Influenced by media routines. 4: Influenced by social institutions (“the market” or “social responsibility”. 4: Influenced by social institutions (“the market” or “social responsibility”. 5: Influenced by dominant ideologies. 5: Influenced by dominant ideologies.

19 The Reputation Institute 111 Fifth Avenue, 8 th floor New York, NY Telephone Fax Media Literacy Since the media influence: Since the media influence: The images & opinions the public holds about major corporations The images & opinions the public holds about major corporations The measurements organizations use for gauging how the public currently respond, The measurements organizations use for gauging how the public currently respond, it is important to understand the political and organizational forces that shape which stories get told. it is important to understand the political and organizational forces that shape which stories get told.

20 The Reputation Institute 111 Fifth Avenue, 8 th floor New York, NY Telephone Fax Goals of Media Literacy Media Literacy is concerned with individuals developing Media Literacy is concerned with individuals developing informed and critical understanding of the nature of mass media, informed and critical understanding of the nature of mass media, the techniques used by them, the techniques used by them, and the impact of these techniques. and the impact of these techniques.

21 The Reputation Institute 111 Fifth Avenue, 8 th floor New York, NY Telephone Fax Agenda-Setting Theory “While the media may not be successful in telling us what to think, they are very successful in telling us what to think about.” “While the media may not be successful in telling us what to think, they are very successful in telling us what to think about.”

22 The Reputation Institute 111 Fifth Avenue, 8 th floor New York, NY Telephone Fax Mass media content is a socially created product, not a reflection of an objective reality. Mass media content is a socially created product, not a reflection of an objective reality. Media content ≠ real world indicators. Media content ≠ real world indicators. Not everything “eligible” to be mass media content actually gets into the media. Not everything “eligible” to be mass media content actually gets into the media.

23 The Reputation Institute 111 Fifth Avenue, 8 th floor New York, NY Telephone Fax But Who sets the media’s agenda? Who sets the media’s agenda?

24 The Reputation Institute 111 Fifth Avenue, 8 th floor New York, NY Telephone Fax News Room Norms The longer a journalist works for a news organization, the more socialized they are to the policies (stated & unstated) of the organization. The longer a journalist works for a news organization, the more socialized they are to the policies (stated & unstated) of the organization. The more journalist follows the routines of their organization, the more likely their content is to be used. The more journalist follows the routines of their organization, the more likely their content is to be used. On stories without established routines (in the early stages of an issue) individual journalistic discretion will be more influential than routines. On stories without established routines (in the early stages of an issue) individual journalistic discretion will be more influential than routines.

25 The Reputation Institute 111 Fifth Avenue, 8 th floor New York, NY Telephone Fax Routine & Public Events Events that are congruent with media routines are more likely to be covered than events that are not. Events that are congruent with media routines are more likely to be covered than events that are not. News off the beaten path may go unreported. News off the beaten path may go unreported. Issues without good film/video footage may not be included in TV newscasts. Issues without good film/video footage may not be included in TV newscasts. A press conference held just before a newspaper’s deadline is more likely to be included than one just after. A press conference held just before a newspaper’s deadline is more likely to be included than one just after.

26 The Reputation Institute 111 Fifth Avenue, 8 th floor New York, NY Telephone Fax News values Prominence/importance Prominence/importance Human interest Human interest Conflict/controversy Conflict/controversy The unusual The unusual Timeliness Timeliness Proximity Proximity

27 The Reputation Institute 111 Fifth Avenue, 8 th floor New York, NY Telephone Fax “Information subsidies” The growing dependence of mass media on press releases (and other PR efforts) by various organizations. The growing dependence of mass media on press releases (and other PR efforts) by various organizations. The “insider” syndrome where journalists face pressures to cooperate with official views, formula writing and standardization. The “insider” syndrome where journalists face pressures to cooperate with official views, formula writing and standardization.

28 The Reputation Institute 111 Fifth Avenue, 8 th floor New York, NY Telephone Fax Journalistic “Balance” Example: Example: A large, well-organized antiwar rally in Texas was given equal treatment with a much smaller, more disorganized pro-war demonstration. A large, well-organized antiwar rally in Texas was given equal treatment with a much smaller, more disorganized pro-war demonstration.

29 The Reputation Institute 111 Fifth Avenue, 8 th floor New York, NY Telephone Fax Influences on the Media Agenda Advertising & Media Circulation Advertising & Media Circulation Capitalist Values: The Media subscribes to dominant capitalist values which supports the Corporate Agenda (e.g., business, in general, is a good thing) Capitalist Values: The Media subscribes to dominant capitalist values which supports the Corporate Agenda (e.g., business, in general, is a good thing)

30 The Reputation Institute 111 Fifth Avenue, 8 th floor New York, NY Telephone Fax Corporate Ownership: Independent newspapers are both more favorable and more disfavorable (e.g.., more extreme) in their news coverage Corporate Ownership: Independent newspapers are both more favorable and more disfavorable (e.g.., more extreme) in their news coverage Media Conglomerates: Companies with located within the media industry (e.g., General Electric, AOL-Time Warner, Disney) will receive more favorable treatment than non-media conglomerates. Media Conglomerates: Companies with located within the media industry (e.g., General Electric, AOL-Time Warner, Disney) will receive more favorable treatment than non-media conglomerates.

31 The Reputation Institute 111 Fifth Avenue, 8 th floor New York, NY Telephone Fax Influences on the Media Agenda Size: All other things being equal, larger (national) companies receive more media coverage than smaller (regional) companies. Size: All other things being equal, larger (national) companies receive more media coverage than smaller (regional) companies. Age: Older companies receive more media coverage than younger companies. Age: Older companies receive more media coverage than younger companies.

32 The Reputation Institute 111 Fifth Avenue, 8 th floor New York, NY Telephone Fax Regional Economies: The media write more favorably about companies/industries within the reach of their local economy than other similar companies outside the sphere of influence of the local economy. Regional Economies: The media write more favorably about companies/industries within the reach of their local economy than other similar companies outside the sphere of influence of the local economy.

33 The Reputation Institute 111 Fifth Avenue, 8 th floor New York, NY Telephone Fax Influences on the Media Agenda West Coast/East Coast bias: Companies headquartered in on East or West Coast receive more (favorable?) news coverage than those HQ’ed elsewhere. West Coast/East Coast bias: Companies headquartered in on East or West Coast receive more (favorable?) news coverage than those HQ’ed elsewhere. Diversity: All industries were to receive equal coverage, companies operating in multiple industries would receive more coverage than companies operating in singular industries. companies receive more media coverage than smaller (regional) companies. Diversity: All industries were to receive equal coverage, companies operating in multiple industries would receive more coverage than companies operating in singular industries. companies receive more media coverage than smaller (regional) companies.

34 The Reputation Institute 111 Fifth Avenue, 8 th floor New York, NY Telephone Fax Previous Reputation: Companies with better public reputations will receive more non-negative news coverage than companies with less favorable reputations. Previous Reputation: Companies with better public reputations will receive more non-negative news coverage than companies with less favorable reputations. Celebrity CEOs: The media are drawn to the Jack Welch’s of the corporate world. Celebrity CEOs: The media are drawn to the Jack Welch’s of the corporate world.

35 The Reputation Institute 111 Fifth Avenue, 8 th floor New York, NY Telephone Fax Conclusions Before “decoding” what impact media coverage has on corporate reputation, consumers need to be aware of: Before “decoding” what impact media coverage has on corporate reputation, consumers need to be aware of: What goes into the production of news. What goes into the production of news. The “interaction” between media and “organizational” forces The “interaction” between media and “organizational” forces


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