The costs and benefits of CEO reputation

Abstract

ccording to journalist Thomas Fried-man, the world has been flattened.The process is irreversible, omnipresent,and marching forward! One of the bypro-ductsoftheparadigm-breakingleapforwardin information technology has been a moreegalitarian approach to global businessopportunity. Any organization can compete,because the hardware needed to competeeffectively in world markets is inexpensiveand accessible to almost everyone. Our com-petitors are no longer only those businessentities who toil in similar markets. Ourcompetition has become any company, any-where in the world, who possesses thewidelyavailable,relativelyinexpensivetech-nology that would enable it to effectivelycompete – new entrant versus giant.One area in which high profile organiza-tions may retain (and develop) their compe-titive advantage is in the area of chiefexecutiveofficer(CEO)reputation.Forbetteror for worse, we have become a nationobsessed with celebrity gossip and culture.Many organize their day around their dailyfixofOprahandspendprecioustimereadingbooks detailing the private lives of publicfigures. Many of these books hold downhigh places on lists of bestsellers. This hasexpanded, in many cases, to an intimateknowledge of and a fervent interest in, theprivate lives of the CEOs of many globalorganizations. We now know many privatedetails of CEOs’ lives ranging from illnessesand marital distress to managerial style andphilanthropic interests. Many of the CEOs ofmajor organizations have become householdnames; we know a lot about them and havecome to conclusions regarding their reputa-tion. Who could have forgotten, or failed tounderstand, the reputation of turnaroundexpert ‘‘Chainsaw’’ Al Dunlap? While weall have been exposed to these reputations,relatively few have looked at the emergingphenomenonofCEOreputationinsofarasitmay have an influence on the ability of anorganization to compete in the aforemen-tioned flattened world. How can organiza-tions capitalize on the trend to popularizeand celebrate CEOs?This special issue of OrganizationalDynamics addresses the potential interfacesof the management and marketing disci-plines. In recent years, however, one areawhere we have begun to see cross-disciplin-ary scholarship is on the topics of identityand reputation, particularly in the manage-ment and marketing fields. In this article, weextendthiscross-disciplinarylenstofocusonthe firm’s chief executive officer and his orher reputation. We would suggest that CEOreputation, as an intangible asset, should beactively managed and promoted by an orga-nization for competitive advantage in a flat-tened world. It must be recognized that CEOreputation may have both benefits and costsfor organizations and their constituencies.Our intention is to integrate these issues