The Concept of Corporate Reputation Measurement: The Case of Japanese Companies

Abstract

Corporate reputation and its impact on different stakeholders have sparked an intense debate among practitioners and academics alike. Researchers have developed multiple dimensions to measure corporate reputation. Different models were proposed to measurethat construct. Considered a major intangible asset, corporate reputation may bring several advantages that ultimately enhance public perception and contribute to better corporate performance. However, sound research can only result from designing a reliable and sound corporate measurement instrument. Building on the measurement framework embodied in the RepTrakTM scorecard developed by the Reputation Institute, this study reports tests conducted to validate the measures empirically through a survey questionnaire of 157 controllers in Japanese companies. Data collected was analyzed using exploratory factor analysis (EFA), followed by structural equation modeling (SEM). The SEM documented that the goodness of fit values was within acceptable limits. Resultsvalidate the RepTrakTM scorecard as a tool for measuring the perceptions of corporate reputation by different stakeholders. The study also documents that effective leadership contributes to higher firm performance. Results are presented and limitations will be discussed.