More Than Just a Big Name: Reputation Development in Emerging Economies

Abstract

Recently there has been an increased interest in organizational reputation development, or how formal evaluations of a firm are formed. Much extant research on firm reputation has focused on how reputation is developed and maintained in developed country contexts. Yet, much less is known about how reputation operates in developing economies. Given that reputation is a social evaluation, the social context where these judgments take place is important to consider. The dynamics of reputation development in developing economies is significant because people and firms in these types of markets operate under assumptions and behaviors that are often fundamentally different from those in developed markets. To better understand how firms develop reputations in developing economies, we conducted an in-depth qualitative study in East Africa, a region that is experiencing large increases in foreign investment across a wide variety of industries and product markets. We find that firms are not able to simply ‘import’ their reputation with them when they enter Africa, and that the dynamics of reputation development in developing economies is more complex.