Reputation aspects in investment decision making: contribution to corporate security

Abstract

The article deals with a substantial threat for corporate security - decline in corporate reputation. Corporate reputation is regarded as the most important intangible asset of corporations. Investment project implementation may greatly affect corporate reputation, both positively and negatively. Therefore, investment decision-making requires consideration of how project implementation affects corporate reputation and application of ethics and social responsibility. We suggest an index to consider the impact of investment project implementation on corporate reputation at the pre-investment phase – reputation improvement index. To evaluate weight numbers, which are part of reputation improvement index, the analytic hierarchy process is recommended. Also, we propose a model to evaluate weight numbers, based on solution of a respective matrix game, and give a case study. We conclude that reputation improvement index, along with traditional methods of investment decision making and risk consideration, lowers corporate threats at present and in the long-term.