2013 - Saïd Business School

Transcription

Oxford University Centre
for Corporate Reputation
Annual Report 2013
Oxford University Centre
for Corporate Reputation
The Oxford University Centre for Corporate Reputation is
an independent research centre within the Saïd Business
School. Through our research we aim to understand how
the reputations of corporations and institutions are created,
sustained, enhanced, destroyed and rehabilitated.
We teach a course in the school’s MBA curriculum, underpinned
by academic research but including contributions from leading
figures in the business world. We also contribute to the executive
education programme and host conferences and seminars.
We are fortunate to have the support of an outstanding
group of International Research Fellows and Associate Fellows
from academic institutions around the world as well as many
distinguished Visiting Fellows from business, the media
and other organizations. A number of Visiting Fellows also
constitute a Global Advisory Board which helps shape the
Centre’s future direction.
Oxford University Centre for Corporate Reputation
Saïd Business School
Oxford OX1 1HP
United Kingdom
T: +44 (0) 1865 288900
F: +44 (0) 1865 278820
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http://www.sbs.oxford.edu/reputation
Welcome to the 2013 Annual Report. It has been a
busy year, with a number of really productive initiatives,
fruitful partnerships, the expansion of the Centre’s
staff and, with that expansion, the opening up of
many interesting new areas of research. It all serves to
illustrate how far the academic study of reputations has
advanced since our inception only five years ago.
At the same time, the practitioner focus on this area has intensified. In May, there was a
significant illustration of this when we co-hosted a Tax and Reputation Conference with the
Oxford University Centre for Business Taxation and the Novak Druce Centre for Professional
Service Firms. What had originally been conceived as a potentially interesting focus for a
relatively small-scale seminar was transformed by the Amazon/ Google/ Starbucks/ Apple
tax avoidance news agenda: it became a standing-room-only event, with widespread press
coverage and a recognition among the hundreds in the audience that the news agenda,
public opinion and reputation concerns were more likely than ever to influence legislation in
this area. While senior politicians spoke at the conference, we repaid the favour in the House
of Commons through our Research Fellow Liz Dávid-Barrett (see “Principal Events”, p32).
Our fourth annual Reputation Symposium showed the breadth of work in the field, with excellent
contributions on subjects including finance and the law, antecedents and effects of CSR policy,
and the influence of networks, from both promising young researchers and established scholars.
The Symposium gave us the chance to recognise some excellent work with two awards: the Best
Dissertation Award 2013 went to Anastasiya Zavyolova, Assistant Professor, Jones Graduate
School of Business, Rice University, for “The Benefits and Burdens of High Reputation During
Disruptions: The Role of Media Reputation, Organizational Identification, and Disruption Type”.
This develops a theoretical framework for exploring the role that the media reputations of
organizations play in stakeholder reactions to disruptive events.
The Best Published Paper award went to Jean-Philippe Vergne, Assistant Professor of Strategy at
Ivey Business School, Western University, for “Stigmatized Categories and Public Disapproval of
Organizations: A Mixed-Methods Study of the Global Arms Industry, 1996-2007”. This qualitative
and quantitative work, which was published in Academy of Management Journal, draws on the
categorisation and stigmatisation literatures to predict the amount of negative social evaluations
received by firms. Both winners presented further work in progress growing out of their research.
We were very proud to have a series of papers based on the Roundtable discussion from the
Symposium included in the Socio-Economic Review at the end of the year. There was another
notable academic landmark when the British History Review devoted its Winter 2013 issue
to the theme of corporate reputation, and asked the Centre’s Rowena Olegario to co-edit the
issue, with Chris McKenna, director of the Novak Druce Centre at the Said Business School.
2014 promises even more varied and exciting work. We have welcomed two new scholars to
the Centre this year: Jon Mackay, who is working on analysis of social and economic networks
with our distinguished International Research Fellow, Professor Ron Burt of the University of
Chicago Booth School of Business; and Tim Hannigan, who is doing pioneering research on
meaning structures in media, using “big data” computational linguistics analysis.
Our teaching programmes go from strength to strength, both the MBA course and the
executive education programmes: Reputation and Executive Leadership and the Corporate
Affairs Academy. As always, our work would not be possible without the tremendous
support we receive from business and academe: from our many scholar friends within
Oxford and around the world; from the business practitioners, our Visiting Fellows, who
give so generously of their time to support our programmes; and our corporate sponsors, in
particular Eni, Roland Berger Strategy Consultants and GLG Man Group.
Thanks to all of the above and to the Centre’s own staff for a fantastic year of achievements.
Rupert Younger
Director
WWW.SBS.OXFORD.EDU/REPUTATION
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Contents
Our People
P3 Director’s welcome
Director
P4 Our people
P7 Research and projects
P20 Case studies
P22 Tax and Reputation Conference
Rupert Younger is the Centre’s founder and Director. He was a cofounder of Finsbury, the financial communications group (now RLM
Finsbury), with whom he remains a consulting partner. He has more
than 20 years of management and reputation expertise and is a leading
commentator on the subject.
P24 Reputation Symposium 2013
P28 Education programmes
P29 International Research Fellows
P31 Visiting Fellows
P32 Principal events
P34 Publications and presentations
Programme Directors
(until April 2013)
Dr David Barron, University Reader in Organizational Sociology,
Programme Director for Reputation and Organizational Behaviour.
Dr Kunal Basu, University Reader in Marketing, Programme
Director for Reputation and Marketing.
Dr Christopher McKenna, University Reader in Business History
and Strategy, Programme Director for Reputation and Strategy.
Professor Tim Morris, Professor of Management Studies,
Programme Director for Reputation, Organizational Structures and
Governance.
Professor Alan Morrison, Professor of Finance, Programme
Director for Reputation and Finance.
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OXFORD UNIVERSITY CENTRE FOR CORPORATE REPUTATION: ANNUAL REPORT 2013
Research Staff
Affiliates
Dr Rowena Olegario is the Senior Research Fellow, Research
Co-ordinator and Case Study Editor.
Marco Alverà, Senior Exectutive Vice President, Eni SpA Midstream,
is an Associate Fellow of the Saïd Business School.
Dr Liz Dávid-Barrett is a Research Fellow whose work focuses on
bribery and corruption in international business, the associated legal
and reputational risks, and the impact of this on corporate behaviour.
Dr William Harvey, a former Centre Research Fellow, is an
Associate Fellow. He is a Senior Lecturer in the Business School at
the University of Exeter.
Dr Tim Hannigan is a Research Fellow whose work examines
meaning structures within large-scale communications in
professional and industrial settings.
Dr Milena Mueller completed her DPhil with the Centre in 2013.
Mark Hughes-Morgan joined the Centre as case study writer and
also looks after all our publications and communications.
Dr Jon MacKay is a Research Fellow whose work examines how
different social and economic networks can be used to better
understand status and reputation.
Professor Thomas Noe is Ernest Butten Professor of
Management Studies, Saïd Business School, and Professorial
Fellow and Director of Management Studies, Balliol College. His
research explores reputational issues around business ownership
and performance.
Andrea Polo is an Associate Fellow of the Centre, and Assistant
Professor of Finance at the University of Pompeu Fabra in Barcelona.
Dr Amanda Moss Cowan finished her Management Studies DPhil
at Saïd Business School in 2013, when she joined the Centre as a
Research Fellow. She studies reputational risk in the supply chain.
Professor Thomas Powell is Professor of Strategy, Saïd Business
School. His work explores the psychological and neurological roots
of trust and reputation.
Dr Ken Okamura is a Research Fellow and a Lecturer in Finance.
Basil Towers, Chairman of Hesleden Partners, corporate strategy
and communications advisers, is an Associate Fellow and assists in
the running of our executive education programmes.
Dr Sarah Otner is a Research Fellow whose research explores
status allocation in online networks.
Dr Basak Yakis-Douglas is a Research Fellow. Her main research
interests are on corporate reputation and building a “practice”
perspective on strategy.
Professor Richard Whittington is Professor of Strategic
Management at Saïd Business School.
Dr Tamar Yogev, a former Centre Research Fellow, is now Lecturer
at the Department of Information and Knowledge Management at
the University of Haifa and and an Associate Fellow with the Centre.
Administrative Staff
Sarah
Livingstone,
Centre
Manager
(on maternity
leave until December 2014).
Pauline
Simpson,
acting Centre
Manager.
Rebecca
Staddon,
Administrative
Assistant until
June 2013.
Isabel Schmidt,
Administrative
Assistant.
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Research and Projects
The Centre carries out research into reputation
across a wide area of business practice, through our
Research Fellows and affiliated academics. Ongoing
projects are summarised on the following pages:
Our research has identified
the following common threads
within reputational research:
Reputation Is Relational
Firms do not own their reputations – these are
owned by others. Corporations and institutions can
influence this, but they do not control it.
Corporations Have
Multiple Reputations
Organizations do not have a single reputation; they
have a reputation for something with someone,
which can mean several different, even competing,
reputations. There is no single measure of reputation.
Reputation Intermediaries
Reputations are influenced in different ways and to
differing degrees by intermediaries, including the
media, regulators, ratings agencies and professional
advisers.
What are they thinking? An
experimental investigation
of the cognitive
mechanisms underpinning
corporate reputation
Professor Michael L. Barnett, Rutgers, The State University Of New
Jersey (above); Dr Sunyoung Leih, University Of California, Berkeley.
We seek to advance understanding of how individuals form and
change their perceptions of a firm, and in particular, the degree to
which they take account of factors other than the performance
of the focal firm. We will conduct experiments in which we
hold constant a firm’s performance characteristics and vary in
disclosure of situational characteristics such as reputation rankings
by prominent media outlets, the (mis)conduct of similar other
firms, and the home country of the firm.
Sunyoung Leih writes: “We hypothesise that, due to bounded
rationality and limited information, stakeholders use heuristics
such as these to make judgments of firms, leading to biased
perceptions and skewed reputations. As these heuristics and
biases in reputation are revealed, firms may develop a better
understanding of what they need to do to manage their
reputations. Working papers were presented at the 2012
Academy of Management meeting in Boston; these papers are
being revised for journal submission.”
Reputation And Signalling
The importance of reputation lies in its signalling
power: in the absence of full information, it can
create enduring - and distorted - perceptions.
Ownership structure,
organizational reform and
corporate reputations
Professor Thomas Noe, Saïd Business
School, University Of Oxford (right);
Professor Michael J. Rebello, School Of
Management, University Of Texas At Dallas; Dr Thomas A. Rietz,
Henry B. Tippie College Of Business, University Of Iowa.
We compare the incentives for reputable behaviour in ownermanaged firms, where the owner makes the decisions that determine
reputation, and professionally-managed firms, where these decisions
are delegated to a professional manager rewarded through an
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employment contract. We show that, even when restrictive conditions
are imposed to rule out unrealistic managerial compensation schemes,
delegated professional management is sometimes better adopted to
preserving corporate reputation than owner management.
Thomas Noe writes: “When the gains offered by short-term
reputation-threatening opportunism are not too large, the firm’s
current reputation is moderately good, and the firm has low
future growth prospects, professional management dominates
owner management. In contrast, owner management dominates
professional management when the firm’s current reputation is very
good, its future growth opportunities are also significant but the gains
from short-term reputation-compromising actions are also very
large. In some cases, professional management is better adopted to
reputation formation than owner management, yet generates less
shareholder value than owner management. In these cases, control
changes that convert professionally-managed firms to ownermanaged firms - e.g., leveraged buyouts - will be profitable even if
they endanger reputations. The owner-management structure is
even more problematic when reform mechanisms exist to restore
damaged reputations. In fact, increasing the efficacy of reform
mechanisms always increases the attractiveness of professional
management relative to owner management.
Using brain imaging to
study trust and reputation
in organizations
Thomas Powell, Professor of Strategy,
Saïd Business School, University of Oxford
(right); Professor Robert Rogers, Department of Psychiatry,
University of Oxford.
Project Partners: Oxford Department of Experimental Psychology,
Oxford Department of Psychiatry.
This project helps us understand how people think when making
decisions on behalf of other people. People tend to bargain more
severely when representing other people than when representing
themselves. However, it is hard to know why they do this based only on
surveys or behavioural experiments. We use brain imaging to study the
processes by which people make decisions when representing others.
Thomas Powell writes: “We use the methods of cognitive
neuroscience to study trust and reputation in organizations. CCR
funding was used to supplement an earlier research grant from the
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Saïd Business School Foundation to fund the costs of brain imaging
with experimental subjects. Our project is the first to study the
neuroscientific origins of the “constituent effect” – that is, the human
tendency to cooperate more when acting for oneself than when
representing a constituent. We found that the constituent effect
correlates with activity in several different parts of the brain, including
the anterior cingulate gyrus and the ventral striatum, suggesting a
high degree of psychological identification with constituents.”
Reputation in organizations: evidence
from cognitive neuroscience
Thomas Powell, Professor of Strategy, Saïd Business School,
University of Oxford; Professor Robert Rogers, Department of
Psychiatry, University of Oxford.
Project Partners: Oxford Department of Experimental Psychology,
Oxford Department of Psychiatry.
This project uses pharmacological methods to study trust and
reputation. Our experimental subjects engage in an investment
task in which they choose whether to borrow from a banker, and
whether to repay. Some of the subjects have above-normal levels
of the brain chemical serotonin, and others have depleted serotonin.
Thomas Powell writes: “The aim of our research is to study
the effects of brain chemicals on the development of trust,
cooperation and reputation. Our experimental work is complete
and we are in the process of analysing and writing up the results.”
Return on reputation: how
does customer-based
affect key performance
metrics of service firms?
Professor Gianfranco Walsh (above), Friedrich Schiller University
Jena; Associate Professor Boris Bartikowski, Euromed Management.
The broad objective of this research project is to explore the
relational nature of customer-based corporate reputation
by contrasting customer-based reputation with customer
commitment. While customer commitment is widely recognised
as an important relational antecedent of profitable long-term
customer relationships, relatively little is known about the
antecedent role of reputation. No research today provides insights
on non-monetary and monetary outcomes of customer-based
corporate reputation simultaneously.
Moreover, the differential effects of reputation and commitment
on non-monetary and monetary outcomes, as well as the
conditions under which customers rely more heavily on reputation
or commitment have not yet been studied. We hypothesise that
commitment is a partial mediator in the relationships between
reputation and relational customer outcomes, and that service
context (based on provider selection risk) serves as a moderator
of these relationships. We intend to use large cross-sectional
samples of service customers from two countries (France and
Germany) to establish whether reputation or commitment more
strongly affect customer outcomes in higher- as compared to
lower-risk service contexts. The expected findings will have
important implications for management scholars and practitioners.
Gianfranco Walsh writes: “Having identified relevant constructs
to extend the original conceptual model, and to avoid common
method effects and other negative side effects of conventional
survey techniques, we have developed a survey instrument.
Through a market research firm we asked 1,100 respondents to
answer questions in relation to firms from different contexts. We
are in the process of analysing the data and expect to be working
towards a journal paper in the spring.”
assumptions underpinning anti-bribery laws and the implications
of distinctions made in the law between different types of bribe.
This work will be published in a Chicago University Press edited
collection on corruption, business and the law in 2014.
Country reputation
Dr Liz Dávid-Barrett and Dr Ken Okamura, Oxford University
Centre for Corporate Reputation.
To date, few scholars have explored the concept of “country
reputation” as such. Four areas of academic research touch on
the issue: (i) marketing literature on country branding – e.g.,
reputation for investment potential with foreign investors;
(ii) management literature on “country of origin” effects
– e.g., reputation spillover; (iii) international economy and
finance literature on sovereign debt ratings – reputation for
creditworthiness with capital markets; and (iv) international
relations and development economics literature on aid
conditionality for countries – conditionality as a mechanism for
building reputations for different qualities with donors.
Dr Liz Dávid-Barrett (right) and
Dr Ken Okamura, Oxford University Centre
for Corporate Reputation.
This project seeks to further understanding of country reputation,
and of the interaction between country and company reputations.
We ask whether concepts developed in scholarship on corporate
reputation can be applied to countries by elaborating types of
country reputation, relevant stakeholder groups, reputational
intermediaries, measurement tools, and considering how concepts
such as reputation commons and reputation spillover might apply.
In another paper, we examine the role of the extractive industries
transparency initiative (EITI) as a reputational intermediary for
countries. Ken and Liz presented their paper “The Transparency
Paradox: Why Corrupt Countries Join the EITI” to the American
Political Science Association Annual Meeting in August 2013, and
have since submitted the paper to a journal.
This project examines how concerns about
corporate reputation mediate the impact
of anti-bribery laws on international business. Through qualitative
research with company compliance directors and with professional
service firms advising companies on corruption risk, we identify
the strategies that companies use to assess corruption-related
risks in international business. We use these insights to develop
a hypothesis about the relationship between anti-bribery laws,
particularly the OECD anti-bribery convention, and international
trade patterns. In other work on this project, we examine the ethical
Liz Dávid-Barrett writes: “Initiatives like EITI pose a puzzle: why
would a corrupt country government voluntarily sign up to fiscal
transparency, which is likely to reveal corruption or close off
future corrupt revenues? We find that countries with a reputation
for corruption but an aspiration to be part of the international
community sign up to the eiti so as to improve their reputation,
and to unlock concrete benefits in terms of foreign aid. We also
show that, despite this instrumentalist approach, membership
does yield real benefits in terms of improved government
accountability.”
Corruption and reputation
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CSR innovation: a
comparative study of
India and the UK
Dr Milena Mueller, Oxford University
Centre for Corporate Reputation (right).
Dr Milena Mueller successfully completed her thesis at the CCR
and is now preparing to submit papers based on that research. Her
thesis contributes to the literature by studying the adoption and
implementation of CSR initiatives through an innovation lens. Taking
an explicit innovation perspective has helped to define CSR innovation
and add understanding of how firms organise for CSR innovation.
Milena Mueller writes: “The phenomenon was investigated
by comparing case studies of CSR innovation in two nations
with differing degrees of economic development - namely the
UK and India. The thesis provides guidance to public policy by
conceptualising CSR innovation and by illustrating the importance
of the subject in addressing social and environmental problems.
It also demonstrates that CSR innovation can help companies to
learn about CSR as well as to seek differentiation and legitimacy,
and that CSR innovation can drive overall business innovation.
Multiple reputations
within management
consultancies
Professor Tim Morris (right), Oxford
University Centre for Corporate Reputation;
Dr Will Harvey, University of Exeter, and
Associate Fellow, Oxford University Centre for Corporate Reputation;
Milena Mueller, Oxford University Centre for Corporate Reputation.
This research project focuses on reputation formation within
professional service firms. We look at management consultancy
companies and the different impressions that internal and external
stakeholders hold both towards the industry and towards particular
firms. We want to see how these impressions differ amongst
stakeholders in various countries and conclude that the reputation
of professional service firms is sometimes at odds with the quality
of the projects they deliver.
Will Harvey writes: “We continue to work on several papers on
reputation formation within management consulting firms. We
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have presented three different papers at various international
conferences, workshops and seminars. The first looks at the
similarities and differences between reputation and identity. The
second looks at how reputation can be formed through various
forms of interactions. The third explores how reputation can vary
significantly across geographic locations within the same global
organization. These papers are currently either under review or in
preparation for submission to various international journals.”
Trust, reputation and
law: the evolution of
commitment in investment
banking
Professor Alan D. Morrison (right), Oxford
University Centre for Corporate Reputation; Professor William J.
Wilhelm, Jr., McIntire School of Commerce, University of Virginia
We present an analysis of the role of commitment in social life.
We identify a hierarchy of commitment devices, running from
the extra-legal commitment modes of trust and reputation to
the more legalistic devices of contract and fiduciary duty. We
suggest that the choice of commitment device is informed by
technological factors, such as the state of information technology,
as well as by sociological considerations that affect the level of
social capital invested in a relationship.
Changes that render contracting easier have two effects. Their
first-order effect is that they render it easier for social actors to
use legalistic commitment devices, and so reduce the importance
of trust and reputation in their relationships. The second-order
effect is that, when commitment no longer relies upon reputation,
it is easier for strangers to deal with one another. This serves
to reduce the extent to which trust and reputation-based
commitment is possible. Both effects undermine the use of
reputational and trust-based relationships in social life.
Alan Morrison writes: “We use this framework to explain the
evolution of investment banking relationships over the last 50
years. The first-order shocks in investment banking were the
development of financial engineering and the development of
computer systems that enabled more arm’s-length dealing. We
present new evidence that investment bankers have shorter
relationships than previously and that those relationships rely
more upon contract than upon reputation.”
Traders vs. relationship
managers: reputational
conflicts in full-service
investment banks
Professor Zhaohui Chen, McIntire School of
Commerce, University of Virginia; Professor Alan D. Morrison, Oxford
University Centre For Corporate Reputation and Saïd Business School;
Professor William J. Wilhelm, Jr. (above), International Research Fellow
with the Oxford University Centre For Corporate Reputation, and
McIntire School of Commerce, University of Virginia.
We present a model that explains why investment bankers have
struggled in recent years to manage conflicts of interest. The
model captures two conflicting dimensions of reputation. On
the one hand, banks can build a type reputation for technical
competence by performing complex deals that may not serve
their clients’ interest; on the other hand, bankers can sustain a
behavioural reputation by refraining from doing so.
Alan Morrison writes: “Unproven banks favour type reputation over
behavioural reputation; being ethical in our model is a luxury reserved
for banks that have proven their abilities. The model also sheds light on
conflicts between the trading and advisory divisions of investment banks;
it also helps us to understand changes in recent years to the relative
strengths of bankers’ type- and behavioural-reputation concern.”
Investment banking relationships:
1933–2007
Professor Alan D. Morrison, Oxford University Centre For
Corporate Reputation and Saïd Business School; Dr Aaron Thegeya,
International Monetary Fund; Professor Carola Schenone, McIntire
School of Commerce, University of Virginia; Professor William J.
Wilhelm, Jr., McIntire School of Commerce, University of Virginia.
We study the evolution of investment bank relationships
with issuers from 1933–2007. The degree to which issuers
conditioned upon prior relationship strength when selecting an
investment bank declined steadily after the 1960s.
The issuer’s probability of selecting a bank with strong relationships
with its competitors also declined after the 1970s. In contrast,
issuers have placed an increasing emphasis upon the quantity and
the quality of their investment bank’s connections with other banks.
Alan Morrison writes: “We relate the structural changes in bank/
client relationships beginning in the 1970s to technological
changes that altered the institutional constraints under which
security issuance occurs. We view our data as evidence that
clients in investment banking placed steadily less reliance over the
period of our sample upon reputational factors in underwriting.”
Japanese banks: when
banks back “lemons” measuring the loss of a
bank’s reputation on its
borrowers
Dr Ken Okamura (right) and Professor Alan Morrison, Oxford
University Centre for Corporate Reputation, Saïd Business School.
The failure of a listed borrower from a Japanese bank results in a
negative 2.0% abnormal return for other borrowers from the same
bank. The bank’s loss of reputation is estimated to be 50% larger than
the impact of the direct capital loss. Borrowers from major (reputable)
banks perform substantially better than those from non-major (less
reputable) banks. Abnormal returns are lowest for loss-making firms,
but are also low for highly profitable firms reflecting foregone profits.
Ken Okamura writes: “In aggregate we find that main banks lend
no more in the two years following the borrower’s failure, unlike
previous US syndicated loan studies, but that main banks do
increase their share when borrowers are loss making and unable to
borrow more from elsewhere. This highlights the censored nature
of prior US studies that rely on new syndications after failure to
analyse the impact on borrowers and the bank.”
Bankruptcy and reputation:
the case of UK pre-packs
Andrea Polo (right), Assistant Professor,
University of Pompeu Fabra, Barcelona;
Associate Fellow, Oxford University Centre for
Corporate Reputation.
News of severe financial distress or, even worse, news that a firm
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is placed into administration can destroy company’s reputation
with creditors, employees and customers. Among the different
options of dealing with insolvency in different countries, the UK
pre-pack administration in which a deal to sell the company is
agreed prior to insolvency and is completed immediately after
the appointment of an administrator is considered to be the
best possible way to deal with failing companies while retaining
a company’s reputation and, therefore, preserving its value.
Notwithstanding, this bankruptcy procedure has a very bad
reputation in the media.
Andrea Polo writes: “The lack of transparency can preserve the
value of the company but makes this procedure more vulnerable
to abuse. This research project explores the efficiency of this
business rescue mechanism.”
with status when firms are young and a positive relationship with
reputation when firms are older, and helps low-status and lowreputation firms more than it helps high-status and high-reputation
firms. We presented this study at the 2013 Strategic Management
Society Annual Meeting and it has been accepted for presentation
at the 2014 Babson Entrepreneurship Research Conference in
June. The paper is also currently under review at a top-tier journal,
and has been submitted for presentation at the 2014 Academy of
Management Annual Meeting.”
Strategic reputation as a
source of resilience
Dr Basak Yakis-Douglas (right), Oxford
University Centre for Corporate Reputation.
Chicken or egg: exploring
the co-evolution of VC
firm reputation and status
Professor Timothy G. Pollock, Pennsylvania
State University (right); Dr Peggy M. Lee,
Arizona State University; Kyuho Jin, Seoul
National University; Kisha Lashley, Pennsylvania State University.
Our research is split into two projects. The first involved updating
the LPJ Venture Capitalist Reputation Index from 2001-2010
(Lee, Pollock and Jin, 2011). The index is calculated annually for the
period 1990-2000, and covers from approximately 500 to 1,500
venture capital firms, depending on the year. This index is the first
comprehensive measure of VC reputation available, and it is now
publicly available at www.timothypollock.com/vc_reputation. Multiple
articles, both in print and forthcoming, have employed the index. We
intend to update it through 2013 once the data becomes available.
Timothy Pollock writes: “Having completed the labour-intensive first
project, the second phase of the project is also proceeding well. In
this study we explore the co-evolution of reputation and status using
a sample of VCs founded between 1990 and 1999 and track them
through 2010. We find that reputation and status positively influence
each other, but that reputation has a greater effect on status than
status has on reputation, particularly when firms are younger. We
also find that the effect of past status on current status weakens
as VC firms age, but the relationship between past and current
reputation remains consistent with age. Furthermore, our findings
show that participating in blockbuster deals has a positive relationship
Strategic reputation is a key factor in
combatting turbulence. We propose that
organizations that engage in discretionary and deliberate forms of
external communication regarding their strategy are likely to recover
faster, or suffer less from share price shocks or market volatility, than
those that don’t. These share price shocks may be due to corporate
crises, product recalls, scandals etc. By communicating their strategy to
specialist media, investors and analysts, we believe that organizations
build a reservoir of goodwill which they can spend during times
characterised by turbulence.
Basak Yakis-Douglas writes: “The first part of the research compares
the respective share price reactions of Fortune 100 companies that
carry out strategy communications and those that don’t in times of
share price shock and market volatility throughout several decades
(from the first adoption of strategy communications until today). For
this part of the study, time data on adoption and subsequent strategic
plan announcements are collected using StreetEvents and First Call.
The second part of the research involves taking a subsample of
the companies that were subject to the first part of the study and
carrying out a qualitative study into how these companies actively
manage strategic reputation. The purpose of the qualitative
study is to uncover phenomena that have not been discovered
in the first part of the study and to further enrich existing
statistical outcomes. The subsample will comprise companies
that are characterised as extreme cases (i.e., companies that did
not recover from share price shock or those that were virtually
unaffected by market volatility etc.). The research will involve
carrying out interviews with CEOs, BOD/SMT members, investor
relations executives, and analysts.”
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Strategic reputation
Professor Richard Whittington (right), New
College and Saïd Business School; and Dr
Basak Yakis-Douglas, Oxford University
Centre for Corporate Reputation.
External communications are central to
corporate reputation. In our research, we focus on a specific form of
external communication: those involving strategic plans. We develop
and test a set of hypotheses on how to manage investors’ reactions
in the early stages of a CEO’s tenure through a specific form of
impression management: namely, strategy presentations. We suggest
that voluntary disclosures of qualitative information such as strategy
presentations are important in influencing investors’ reactions during
the early tenure of a CEO. We present broad empirical support for our
theoretical arguments using a sample of 1,425 strategy presentations
carried out by NYSE and NASDAQ-listed organizations over 10 years.
The value of strategy presentations is often downplayed because
they are viewed as “cheap talk”. Cheap talk involves costless (or
very low cost), non-binding and non-verifiable messages intended
to affect others’ beliefs about future behaviour, potentially to the
advantage of the talker. Cheap talk theorists might suspect that
the public presentation of a strategic plan (for instance, a declared
intention to invest in a market) is mainly intended to confuse
or warn off competitors, rather than to project true intentions.
Because firms have not yet put serious money behind their
claims, the market is unlikely to react to strategy presentations.
Nonetheless, while there may be no financial cost to the firm, there
may be significant reputational exposure for the CEOs presenting
these strategies. CEOs with reputations for not delivering on plans
will be penalised, and may even lose their jobs.
This research has been published as a chapter in the Oxford
Handbook of Corporate Reputation (Barnett and Pollock ed.s,
2012) and has been mentioned in practitioner journals (e.g., The
Marketer). It has also been presented at the annual conferences
for the Academy of Management (2010, 2011), European Group
for Organizational Studies (2010), Strategic Management Society
(2011), British Academy of Management (2011) and Oxford
University Centre for Corporate Reputation Annual Symposium
(2010). The research is now complete and is being prepared for
submission to a top-tier journal.
Basak Yakis-Douglas writes: “Our results show that strategy
presentations by new CEOs spark positive reactions even if they are
organizational or industry outsiders and have held no similar positions in
the past. Furthermore, shareholders are more generous towards new
CEOs who carry out strategy presentations early on in the first 100 days.
14
Our findings suggest that investors and analysts respond very
positively to efforts made by new CEOs to gain support for their
strategic plans early on. Our research suggests that strategy
presentations given shortly after a new CEO is appointed can help
boost share price, or at least have no negative impact. Our test
results for our baseline hypothesis show that in contrast to the
sceptical finance and accounting literatures on cheap and soft talk,
these presentations do seem to matter.”
Corporate communication and
reputation: an in-depth analysis into
impact, practices and reputational
aspects tied to M&A announcements
Professor Duncan Angwin, Oxford Brookes University; Dr Maureen
Meadows, Open University; Dr Basak Yakis-Douglas, Oxford
University Centre for Corporate Reputation.
This research investigates the effect of voluntary communications
at a time associated with strategic instability – the postannouncement phase in a proposed merger. Using a sample of
36,376 deals and 163,023 associated interim news events –
post-announcement communications - carried out by NYSE and
NASDAQ-listed organizations over 10 years, we suggest that these
public voluntary communications reduce evaluative uncertainty and
help organizational leaders manage shareholders’ impressions.
Basak Yakis Douglas writes: “Interim news events are highly influential
in reducing evaluative uncertainty (measured by the standard deviation
in investment analysts’ recommendations) and managing investors’
reactions during M&A. Our research suggests that it is worthwhile
for organizations to voluntarily disclose their plans after the initial
announcement of the M&A. Organizations would benefit from
interim news events especially in contexts associated with high levels
of information asymmetry (strategic instability, industry instability,
share price volatility), when investors are likely to be facing evaluative
uncertainty. In many cases, it cannot hurt, and in others, the potential
benefits are likely to overcome the potential disadvantages.
Our paper was nominated for the Best Practice Paper Award in
the Strategic Management Society Annual Conference in 2012.
We have presented our paper in 2012 and 2013 at the annual
conferences of the British Academy of Management, Academy of
Management, European Group for Organizational Studies and the
Strategic Management Society.”
Reputation in
uncertain markets
Assistant Professor Gokhan Ertug, Singapore
Management University; Professor Peter
Hedstrom, Director, the Institute for Futures
Studies, Stockholm, Sweden and Nuffield College,
Oxford University; Dr Tamar Yogev (right), Lecturer at the Department
of Information and Knowledge Management, University of Haifa;
Associate Fellow, Oxford University Centre for Corporate Reputation.
This research seeks to examine the importance of reputation as a
signalling mechanism in uncertain markets through the lens of the
art market. In particular, the study will shed light on the way in which
market prices and market evaluations interact to create reputation
in the absence of any other tangible and acceptable measures of
quality. In addition, it highlights the role played by certain highstatus reputation intermediaries and discusses the ways in which
these organizations attain and use their status. The data from this
project is the basis of a chapter entitled “Global and Local Flows in
the Contemporary Art Market: The Growing Prevalence of Asia” in
the forthcoming book On the Globalization of Contemporary Art
Markets, (OUP, ed.s Olav Velthuis and Stefano Baia-Curioni).
Tamar Yogev writes: “In our paper entitled: “The art of representation:
how the reputation and affiliations of artists affect their success
with different audiences in the contemporary art field”, we study
the implications of actors’ reputation and affiliations when there are
different audiences within the fields in which these actors operate.
In particular, we examine how an actor’s reputation and affiliations
matter differently for their success with different audiences. We
study the contemporary art field, where the assessment of quality
is characteristically uncertain, and focus on the differences between
museums and galleries in terms of their expected relationships with
artists, as they progress from being new in the field to gaining more
experience. While we find that broad indicators of reputation help newer
artists more, we also find that gallery-specific reputation (based on
having past exhibitions at top galleries) and affiliations (based on having
past exhibitions at any gallery) help experienced artists more in securing
subsequent success at galleries. This difference results from the fact
that galleries generally exhibit the work of newer artists whereas
museums generally exhibit the work of more experienced artists.
Therefore, reputation and affiliations do not necessarily help actors who
are new to the field more but rather they help actors about whom a
particular audience might need greater assurance regarding their fit. In
general, and for museums in particular, these actors are newer artists,
but for galleries these actors are more experienced artists. We explore
these ideas in a sample of more than 50,000 artists who became
active in the contemporary art field between 2001 and 2010. We
find that while past exhibitions at top museums or past exhibitions at
museums in general help newer actors more in getting a subsequent
exhibition at a top museum, it is the more experienced artists who
benefit more from past exhibitions at top galleries, or past exhibitions at
galleries in general, in securing subsequent exhibitions at a top gallery.
The benefits and burdens
of high reputation
during disruptions:
the role of media
reputation, organizational
identification, and disruption type
Dr Anastasiya Zavyalova, Rice University (above); Dr Michael Pfarrer,
University of Georgia; Dr Rhonda Reger, University of Maryland.
This research project is split into two papers. The first paper examines
the circumstances under which a high reputation is a burden or a
benefit for an organization. Analysing changes in donations by nonalumni and alumni after NCAA scandals in U.S. universities, the authors
find that high-reputation universities are more likely than their peer
institutions to experience a decrease in donations by non-alumni.
The same set of high-reputation institutions, however, benefits
from increased donations by alumni after an NCAA scandal. The
findings indicate that reputation is a burden after negative events for
stakeholders with low levels of organizational identification. On the
other hand, high reputation is a benefit for stakeholders with high levels
of organizational identification, who are more likely to support highreputation organization after a negative event.
In the second paper, the authors question the assumption that
seeking organizational celebrity is always a beneficial strategy for a
company. They argue that different constituents are likely to interpret
the same information about a celebrity-seeking organization in
different ways. Consequently, the same organization can become
a celebrity among some constituents and enjoy the benefits of this
intangible asset, and become infamous among others and suffer the
burdens of this intangible liability.
As a result of these parallel processes, a celebrity-seeking
organization is more likely to become an attractive target for different
constituents’ identification and disidentification. Subsequently, an
organization may generate support from identifying constituents
15
following their exposure to negative information, but it may also
generate opposition from disidentifying constituents following
their exposure to positive information. Disidentification, however, is
more resilient than identification to disconfirming information about
the organization. Thus, at high levels of disconfirming information,
the level of negative information required to decrease identifying
constituents’ support for the organization is lower than the level of
positive information required to decrease disidentifying constituents’
opposition. Seeking celebrity may, therefore, lead to two unintended
consequences: Not only does an organization risk becoming infamous,
but its infamy is also more likely to endure despite disconfirming
information, while its celebrity appears to be more fleeting.
Anastasiya Zavyalova writes: “Our first paper has been presented at the
Academy of Management (AOM), the Strategic Management Society
(SMS), and the International Conference on Corporate Reputation,
Brand, Identity and Competitiveness, and has recently received a
request to revise and resubmit from a top-tier journal. Our second
paper has been presented at SMS and received a Best Conference
Paper award at the 17th International Conference on Corporate
Reputation, Brand, Identity and Competitiveness in Barcelona in June
2013. It has now been submitted to a top-tier journal.
Country reputation and
international trade: a
structural gravity approach
Dr Daniel Korschun (right), Dr Yoto V. Yotov
and Boryana Dimitrova, Drexel University.
Ours is the first study to quantify the effects of country reputation
on international trade. We examine the relationship between country
reputation and trade using a novel bilateral, country-pair reputation
dataset, and draw from the gravity model of international trade found
in the economics literature. We also propose that reputation reduces
uncertainty for buyers and test this notion by examining the effect of
reputation in industries with differing degrees of uncertainty.
Daniel Korschun writes: “In our research, we find that the overall
effect of improving country reputation by one place among the
countries in the reputation dataset leads to a two per cent increase
in exports, which is equivalent to the importing country decreasing
tariffs by between 0.26 per cent and 3.86 per cent. In accordance
with the notion that reputation serves as a signal to reduce
16
uncertainty, we find that the effects of reputation are strongest in
industries with heterogeneous products. For example, the effect is
significant in manufactured goods like machinery and furniture, but
not in food and metals. We have now completed our data collection
and analysis and have submitted a manuscript to a top-tier journal.”
Reputation semantics:
using text analytics to
uncover contaminating
and purifying media
narratives during the
2009 British MP expenses scandal
Joseph F. Porac, George Daly Professor in Business Leadership, Stern
School of Business, New York University; Jonathan Bundy, Assistant
Professor, Smeal College of Business, Penn State University (as of
summer 2014); Scott D. Graffin, Associate Professor Terry College of
Business, University of Georgia; James B. Wade, Asa Griggs Candler
Chaired Professor of Organization and Management, Goizueta
Business School, Emory University; Tim Hannigan, Research Fellow,
Oxford University Centre for Corporate Reputation (above).
This research project focuses on a political scandal to demonstrate
the specific ways in which it affects reputational dynamics. Scandals
are theoretically interesting not only because of the transgressions
themselves, but because the transgressions, once revealed, become
triggers for narratives and sensemaking that are played out very
publicly in the media. We aim to study the mechanisms of how media
narratives construct a scandal and contaminate particular reputations.
Scandals are fracturing events that occur with increasing
frequency and destructive force in and around modern
organizations and institutions. A scandal is triggered when
“disruptive publicity” reveals organizational or individual
transgressions having moral, and perhaps legal, implications.Over
the course of a scandal, reputations can be negatively associated
with particular concepts, and this contamination can have
destructive effects. Conversely, some reputations can withstand
scandal and emerge relatively unscathed. Publicity, and the social
discourse that it creates and channels, is the core of a scandal; to
account for the causes and effects of scandals, one must map and
understand the meaning of this discourse over time.
17
Tim Hannigan writes: “For this project, we have collected over 300,000
articles from 16 newspapers before and after the 2009 British MP
expenses scandal – from 2006 to 2011. Using a number of techniques
for computational semantic analysis, including collocation concept
networks and sentence sentiment, we are studying how meaning
structures are disrupted and redeveloped; examining the purification
and contamination mechanisms of MP reputations, and the meaning
kernels of the scandal. This will be a theoretical contribution to the study
of status and scandal, and also contribute methodologically to studies
of public discourse. This work has been submitted to serve as part
of two workshops at the 2014 Academy of Management Meeting:
“Reputation and Scandal” and “The Power of Words in Big Data”. A paper
is currently being prepared for submission to a top-tier journal.
Organizational strategies
and social evaluation: status,
reputation, and legitimacy
Amanda Moss Cowan, Oxford University
Centre for Corporate Reputation (right);
Professor Tim Morris, Saïd Business School.
This project builds on work in Amanda Moss Cowan’s dissertation, “Sea
Change: A Sensemaking Perspective on Competing Institutional Logics”,
which examined the rise of a “‘sustainable seafood” discourse over 20
years following the collapse of the North Atlantic cod fisheries off the
eastern coast of North America in the early 1990s.
Amanda Moss Cowan writes: “We examine the dynamic processes
of theorisation and diffusion that revolved around organizations’
motivations in the area of legitimacy, reputation, and status. The
study highlights the identity-related concerns of firms as they
negotiate changing societal norms.”
Strategic use of status
Dr Sarah Otner, Oxford University Centre
for Corporate Reputation.
Examination of the allocation of status in
online professional networks showed that
performance (specifically, high knowledge
sharing) is a major predictor of status, indicating that demography
18
(and particularly, gender) loses importance when there is evidence for
competence. This research project looks to explain how organizations
use individuals’ status to their strategic advantage.
Sarah Otner writes: “This work builds on ground covered in my
dissertation. The factors that influence status in online networks
vary considerably depending on context: for example, they
differ depending on the level of status at stake. I am currently
developing this work into a journal article.”
The impact of firm
reputation and CEO
incentives on acquisition
activity
Sarah Otner, Oxford University Centre
for Corporate Reputation; Adam Steinbach, Danny Gamache and
Professor Cynthia Devers, International Research Fellow, Oxford
University Centre For Corporate Reputation (above), all from Eli
Broad College of Business, Michigan State University.
This research examines how firm reputations interact with incentive
pay to influence CEOs’ acquisition investment decisions. Although why
CEOs decide to acquire is a core practical question, a growing body of
research demonstrates that acquiring CEOs often accrue substantial
benefits from their acquisitions, particularly when they hold high levels
of incentive pay. Moreover, related research has shown that CEOs
motivated by large incentives tend to make larger acquisitions, and that
those acquisitions tend to generate larger losses than gains.
Given that incentive compensation ties CEO compensation to
firm performance, the above research findings on downstream
acquisition effects might seem counterintuitive. However, recent
research indicates that CEO post-acquisition compensation can
often be disconnected from acquisition performance. Taken
together, these studies suggest that CEOs might acquire because
they believe that the risk to their personal wealth or financial capital
is low. However, we know little about how other types of capital
(e.g., human and social capital) may influence CEOs’ perceptions of
risk with regard to acquisitions.
Sarah Otner writes: “This project focuses on two impact channels:
firm and individual CEO reputations. Using Ravenpack News
Analytics, we endeavour to understand the multi-level effect
of how CEOs consider both reputations in the decision-making
process concerning acquisitions.”
Visibility and volatility
Sarah Otner, Oxford University Centre
For Corporate Reputation; Professor Mike
Pfarrer (right), International Research
Fellow, Oxford University Centre For
Corporate Reputation and Jonathan Bundy,
both from the Terry College of Business, University of Georgia.
This research intends to improve the Centre’s multidimensional
measurement of reputation through examining the connection
between visibility and volatility. Visibility has been considered in the
networks and reputation literatures as prominence – which some
research has summarised as “being good or being known”. However,
there is opportunity in the strategy literature to consider the lay
understanding of media exposure and its connection to organizational
performance. Research has shown that the pressure to maintain
high performance under conditions of high visibility can make firms
more prone to illegal actions. Such desperate behaviour might then
increase volatility in both stock market activity and strategic flexibility.
However, some theories link reputation-building negatively to stock
market volatility but positively to strategic flexibility. Therefore, the
true relationship between reputation (viz. visibility) and volatility is
unclear – perhaps because it is different during the creation and
maintenance phases of reputation-building.
ties that exist between executives and directors have been shown
in previous academic research to be important conduits for strategic
information relevant to firm performance. However, work examining
the network foundations of reputation is still in its early stages.
The broad goals of the project are to gain a better understanding
of reputation at multiple levels. Our goal is to produce studies
examining reputations concerning regions, cities, industries, firms
and people. The first part of the project examines corporate
interlock data of American firms. Preliminary work has been
concerned with the collection of corporate interlock data from the
US, using firm-level data and corporate reputation data from the
US. This work will lay the foundations for subsequent studies of
corporate interlock structures in Europe.
Jon Mackay writes: “Our current work involves examining how the
Fortune World’s Most Admired Companies list is associated with the
social structure of the directors and executives in those industries.”
Sarah Otner writes: “Using Ravenpack News Analytics, this project
will begin to clarify the connection between visibility and volatility.
This extensive dataset permits this project to examine all four
components of reputation: prominence, salience, exemplary social
distinctiveness and favourability.”
Network foundations of
Dr Jon Mackay, Oxford University Centre
for Corporate Reputation (right); Professor
Ronald Burt, Booth School of Business,
University of Chicago.
This project is concerned with the network foundations of
corporate reputation. Key to this work is understanding reputation
in relation to established network measures of both brokerage and
status. The aim of this project is to better understand corporate
reputation through an empirical examination of the corporate
interlock network that ties together major corporations. The social
19
Case Studies
How do companies create reputations? And
once created, how are they sustained? What
are the reputational issues that accompany
corporate restructurings and turnarounds? What
happens in organizations during crisis situations,
when their reputations are on the line – and
how do organizations that have lost their good
reputations rebuild them?
20
Scholars continue to refine the theoretical models and constructs that help us to understand
the various aspects of reputation. Our case studies approach the problems from a practical
perspective, through the study of particular organizations that are facing reputational challenges
during different stages of their life cycles.
In 2013, we produced two case studies that explored how companies lose their reputations
when they engage in fraud and corruption. Reputational loss may seem an obvious
consequence in such instances; but it is far less clear why individuals and companies seem
willing to lose their reputations by engaging in unethical behaviours. Theory tells us that
reputation is a valuable asset that economic actors do not easily put at risk. Yet we know
from our own everyday observations that individuals and companies do so, again and again.
As our two case studies below demonstrate, the desire to hold on to good reputations
sometimes leads to adverse effects. Factors such as cognitive mistakes (even on the part
of otherwise talented people) and bad timing (with the passage of new regulations, for
example) also play a role.
Rowena Olegario, Case Study Editor
Parmalat - Europe’s biggest corporate bankruptcy. Parmalat, the Italian dairy and food
conglomerate, was declared bankrupt in 2003 after a multi-billion-euro hole was discovered
in its accounts. The company’s debts amounted to around €14.1 billion. Its founder, Calisto
Tanzi - previously one of Italy’s most respected businessmen, with a reputation for high
moral standards and philanthropy - personally orchestrated a vast global fraud and was
jailed for 18 years. Drawing on the prosecutor’s analysis of the company’s dealings, and
considering the network of personal and professional relationships that fostered the criminal
conspiracy, we examine why the threat of losing reputation was not enough to prevent
a disastrous series of decisions, and how key indicators signalled the true nature of the
company before the truth was revealed.
Mabey & Johnson - the UK’s first overseas bribery prosecution. Mabey & Johnson
(M&J) was an entrepreneurial engineering company. Having adapted and improved Bailey
bridge technology made famous in the Second World War, M&J took its cost-effective
bridging solutions all over the world and carved out a successful niche in some of the most
challenging international territories. Its products were widely respected, and its operations
were supported by the likes of the World Bank. M&J and its staff were duly recognised for
services to British industry. But things changed with the introduction of new anti-corruption
legislation: incentive payments disguised as commissions, once considered a normal part
of business practice, were now off-limits. When the M&J Board attempted to put in the
controls to prevent bad practice, and deal with particular individuals, the move backfired
dramatically. Faced with counter-claims of endemic corruption, and damaging publicity,
the company took the decision to self-report to the authorities in the hope of limiting the
fall-out. The degree of disclosure in this process left M&J vulnerable to severe penalties
- enforced by the Serious Fraud Office, which was delighted to have an exemplar case to
pursue. It led to the imprisonment of senior executives, and the near destruction of the
business. But what options were open to Mabey & Johnson?
Mark Hughes-Morgan, Case Study Writer
Our case studies are used as part of the Executive Education programmes and in the MBA
programme. Copies can be requested free of charge from our website at: www.sbs.oxford.edu/
reputation under “research”.
21
Tax and Reputation Conference
In May the Oxford University Centre for Corporate Reputation co-sponsored a Tax
and Reputation Conference with the Oxford University Centre for Business Taxation
and the Novak Druce Centre for Professional Service Firms. The issue attained
particular prominence after global companies such as Starbucks, Apple, Amazon and
Google received widespread criticism for tax avoidance strategies. The conference
included leading figures from business, politics, media and professional service firms.
“Corporate reputational risk seems to be the best weapon in the
armoury in fighting the tax battle.” So said Sir Roger Carr, then-President
of the CBI, addressing the core issue behind the Tax and Reputation
Conference. In front of a packed audience of over 200 tax professionals,
regulators, legislators and media, his speech illustrated how far the
debate on corporate taxation had moved from being a question of
accounting technicalities to a question of core reputation – as, most
notably, Starbucks, Amazon, Google and Apple had recently discovered.
The conference was arranged to help crystallise the implications of this
shift. Five years ago, such a gathering would have been unlikely at best;
in 2013 the event was substantially over-subscribed.
What has changed? In the UK, the ”assault” on perceived tax
dodgers, effectively spearheaded by the public accounts committee
(PAC) of the House of Commons, has fed an increasingly aggressive
narrative in the media, delighting in the discomfort of business
giants and their well-paid advisors. But momentum around the
topic has, in fact, been building over several years since the financial
crisis. (A survey of the quality broadsheets shows that mentions of
tax avoidance and corporations increased 167 per cent between
2008 and 2009, with a further jump of 234 per cent between
2011 and 2012.) Sir Roger first considered the question: is tax a
matter of right and wrong? Was it enough to say, as Google initially
did, “We obey the law”, or did the company nonetheless “do evil” –
the accusation levelled by Margaret Hodge MP, chair of the PAC,
and a speaker in the second session of the morning?
“Tax avoidance cannot be about morality,” maintained Sir Roger. But
at the same time, obeying the letter of the law would not suffice.
Appropriate corporate tax strategies were a matter of “finding the
balance between shareholder fiduciary duty, stakeholder responsibility,
social awareness and corporate reputation for acceptable behaviours”.
But had things really got so very bad, or were reputations being
damaged undeservedly? David Gauke MP, Exchequer Secretary to
the Treasury, and another platform speaker, detected an apparent
disconnect between the reality and perception of tax avoidance: the
expert consensus was that individuals and companies were behaving
less aggressively on tax avoidance than a decade ago, said Gauke.
22
The difference in perception was a symptom of the difficult financial
times: an aversion among the public to “free riders… When individuals
or companies aren’t perceived to be contributing their fair share to the
public purse, there is understandable public anger.”
‘Tax avoidance cannot be about
morality,’ said Sir Roger Carr; but
was it enough to say, as Google
did, ‘We obey the law’?
In acknowledging the general desire to crack down on aggressive
tax avoidance, real or imagined, there was another reputation at risk:
that of UK plc. The government had to juggle the perception of being
“open for business” with taking renewed steps to deal with avoidance.
Gauke saw a positive benefit in the conundrum: “Reputable
companies want to operate in jurisdictions where competitive tax
rates are properly enforced. An environment based on consistent
application of the law… has reputational advantages.”
Transparency was a word to which speakers returned again and
again. Between different jurisdictions, corporations and governments,
companies and consumers, although there was plenty of scepticism
from accountants and lawyers present about just how achievable this
would be given the unavoidable complexities of the law. Suggestions
included publishing tax filings online, and companies making clear the
jurisdictions where their profits are booked. Margaret Hodge was
adamant that tax strategies, and their public declaration, should now
be at the heart of a company’s CSR policy. But in front of a predictably
hostile audience, her own reputation came under fire, particularly when
she admitted how limited was the expertise on taxation technicalities
available to her and her committee. In the current climate, the level of
public scrutiny is likely to grow – a survey of the audience recognised
as much: consumer pressure was now considered the fourth most
important factor in tackling aggressive tax avoidance in the future
– up from 10th, historically.
Guest speaker Sir Roger Carr,
then-President of the CBI, at the
Tax and Reputation Conference.
Sir Roger Carr, President
of the CBI, addressing
the core issue behind
the Tax and Reputation
Conference
Margaret Hodge, Chair of the
Public Accounts Committee
of the House of Commons,
with John Gapper of the
Financial Times.
Reputation Symposium 2013
The Oxord University Centre for Corporate Reputation hosted
its fourth Reputation Symposium in September 2013, at
Corpus Christi College. It comprised three days of stimulating
presentations and debate among the Centre’s researchers,
International Research Fellows, Visiting Fellows and invited
scholars.
24
Fellows, practitioners,
speakers and guests at
Corpus Christi College.
This year’s Symposium covered an impressive breadth of subject
matter, reflecting how widely reputation issues are featuring
across disciplines: from regulation and external reputations in
banking to the multiplicity of reputations within firms, and the
reputational implications of impression management.
The growing interest in this field was reflected in the excellence
of submissions for our two annual awards: Best Published Paper
was awarded to Jean-Philippe Vergne, Assistant Professor
of Strategy, Ivey Business School, Western University, for
his Academy of Management Journal paper, “Stigmatized
Categories and Public Disapproval of Organizations: A MixedMethods Study of the Global Arms Industry, 1996–2007”.
The award for Best Dissertation went to Anastasiya Zavyalova,
Assistant Professor, Jones Graduate School of Business,
Rice University, for “The Benefits and Burdens of High
Reputation During Disruptions: The Role of Media Reputation,
Organizational Identification, and Disruption Type”.
The Symposium was the last to be chaired by our Visiting Professor,
David Whetton, Jack Wheatley Professor of Organizational Studies
at Brigham Young University, who has completed his tenure. Our
thanks to him and to the team that put the event together: our
International Research Fellows Michael Pfarrer, Cynthia Devers,
Gregory Jackson and William Wilhelm, and Alan Morrison, Professor
of Finance at the Oxford University Saïd Business School.
See overleaf for the papers that were presented and discussed.
25
Reputation Symposium 2013 continued
Very bad things or business as
usual? Stakeholder attributions and
reputational penalties in light of
corporate irresponsibility
The impact of firm reputation and CEO
incentives on acquisition activity
Daniel Gamache, PhD Candidate, Broad College of Business,
Michigan State University
Stephen Brammer, Professor of Strategy, Warwick Business School
Anticipatory impression management
Reputations in conflict: examining the
roles of a firm’s multiple reputations
in managing a negative expectancy
violation
Jonathan Bundy, Doctoral Candidate, Management Department,
Terry College of Business, University of Georgia
Scott D. Graffin, Associate Professor, University of Georgia
Legitimacy-as-feeling: how affect
leads to vertical legitimacy spillovers in
transnational governance
Patrick Haack, Oberassistent (Assistant Professor), University of
Zurich, Department of Business Administration
Managing reputation with litigation:
why legal sanctions can work better
than market sanctions
The interactions of corporate reputation
within a management consulting firm
Albert Choi, Albert C. BeVier Research Professor, University of
Virginia School of Law
William S. Harvey, Senior Lecturer in the Business School,
University of Exeter
Cases and experiments: strategic
communication contributions to
crisis-related reputation repair
A social judgment perspective on
how performance outcomes influence
W. Timothy Coombs, Professor, Nicholson School of Communication,
University of Central Florida and Lund University, Helsingborg Campus
Geoffrey E. Love, Assistant Professor of Business Administration,
University of Illinois
Corporate reputation for social and
environmental responsibility: recent
insights, future directions and a
promising path
From bankers trust to Goldman Sachs:
the demise of market discipline for
breaches of trust
Jonathan P. Doh, Rammrath Chair in International Business, Faculty
Director, Center for Global Leadership, Villanova University
26
Jonathan Macey, Sam Harris Professor of Corporate Law,
Securities Law & Corporate Finance, Yale Law School
The Symposium was the last
to be chaired by our Visiting
Professor, David Whetton,
Jack Wheatley Professor of
Organizational Studies at
Brigham Young University.
Market structure, reputation and the
value of quality certification
Brian McManus, Associate Professor of Economics, University of
North Carolina – Chapel Hill
Contract law minimalism: a formalist
restatement of commercial contract law
Jonathan Morgan, University Lecturer in Tort Law, University of Cambridge
Taboo topics
Gerardo Okhuysen, Professor, Organizational Behavior, Paul
Merage School of Business, University of California, Irvine
Only another way station: status allocation
in electronic networks of practice
Sarah M. G. Otner, Research Fellow, Oxford University Centre for
Corporate Reputation
Signaling environmental stewardship in
the shadow of weak governance: the
global diffusion of ISO 14001
Aseem Prakash, Professor, Department of Political Science; Walker
Family Professor for the College of Arts and Sciences, University
of Washington, Seattle
Multinational enterprises exposed:
how host country institutions influence
corporate social responsibility adoption
Nikolas Rathert, PhD Student, Department of Management, Freie
Universitaet, Berlin
The co-construction of organizational
identities: organizational identity work
and resource acquisition in non-profit
organizations
Davide Ravasi, Professor of Management, Cass Business School,
City University of London
Creating skeptics or believers: the
reputational consequences of social and
environmental signaling
Jenna P. Stites, PhD Student, Smeal College of Business,
Pennsylvania State University
Asset divestment as a response to
media attacks in stigmatized industries
Jean-Philippe Vergne, Assistant Professor of Strategy, Ivey
Business School, Western University
Investment-banking relationships:
1933-2007
William J. Wilhelm, McIntire School of Commerce,
University of Virginia
Benefit or burden? The joint effects
of organizational identification and
reputation on stakeholder support
following negative events
Anastasiya Zavyalova, Assistant Professor, Jones Graduate School
of Business, Rice University
Links to the above can be found on our website at www.sbs.oxford.
edu/reputation under “Events/Symposia”.
27
Education Programmes
During 2013, the Centre organised, ran and contributed
to several executive education programmes. The Centre’s
flagship Reputation and Executive Leadership programme for
senior executives took place in June 2013.
This invitation-only three-day residential programme included
the involvement of a number of our Visiting Fellows* as
practitioner teachers, in addition to teaching contributions by
members of the faculty at the Saïd Business School and invited
external speakers. Their contribution was much appreciated by
all involved in the programme which was attended by a group
of senior participants from major global companies.
In addition to this flagship programme, the Centre developed
bespoke programmes for several major international
corporations in the UK, Europe and the Middle East and
contributed modules on reputation to executive and degree
programmes organised by the University of Oxford.
2013 also saw the second year of the Corporate Affairs
Academy, run in partnership with Hesleden Partners. This
invitation-only programme has been created to provide a
rigorous and analytical forum where corporate affairs directors
can meet and discuss issues, trends and best practice.
The Academy’s aim is to help corporate affairs leaders
make a more strategic, systematic and valuable
contribution to their business.
The highlight of our teaching year was our reputation elective
at Oxford. The programme, delivered by a combination of
faculty and Visiting Fellows, offered MBA students an insight
into reputation formation, destruction and rehabilitation.
All our teaching programmes have received excellent
feedback. In 2014 they will be run along the same lines,
under the direction of the Executive Education department
of the Saïd Business School.
*For a list of Visiting Fellows who taught on the programme see page 31.
28
International Research Fellows
Our International Research Fellows are leading academics,
specialising in reputation scholarship, who are affiliated with
the research work of the Centre.
Professor Edward
Balleisen Duke University
Professor Cynthia
Devers - Eli Broad
College of Business,
Michigan State
University
Professor
Dr Gregory
Jackson Freie Universität
Berlin
Professor Lisa
Bernstein – The
Law School,
University of
Chicago
Professor David
L. Deephouse University of Alberta
School of Business
Professor
Jonathan M.
Karpoff - Foster
School of Business,
University of
Washington
Professor Steve
Brammer Warwick Business
School, University
of Warwick
Professor Janet M.
Dukerich McCombs School of
Business, University
of Texas at Austin
Dr Brayden King
– Kellogg School
of Management,
Northwestern
University
Professor Tom J.
Brown – Spears
School of Business,
Oklahoma State
University
Professor Kimberly
D. Elsbach - Davis
Graduate School
of Management,
University of
California
Professor
Christopher
Kobrak - ESCPEurope
Professor Ronald
Burt - Booth
School of Business,
University of
Chicago
Professor Dr
Dietmar Fink Hochschule BonnRhein-Sieg University
of Applied Sciences
Professor
Guido Palazzo HEC Université de
Lausanne
Professor Peter
Dacin Queen’s School of
Business
Professor Mary Jo
Hatch - University of
Virginia
Professor Frank
Partnoy University of San
Diego School of
Law
29
Dr Mike Pfarrer
- Terry College of
of Georgia
Professor Roland
Rust – Robert H.
Smith School of
of Maryland
Professor
David Vogel University of
California, Berkeley
Professor Tim
Pollock – Smeal
College of Business,
The Pennsylvania
State University
Professor Majken
Schultz Copenhagen
Business School
Professor Harrie
Vredenburg Haskayne School of
of Calgary
Professor
Violina Rindova McCombs School
of Business,
University of Texas
at Austin
Professor
Toby E. Stuart
– Haas School of
of California,
Berkeley
Professor William
J. Wilhelm Jr. McIntire School
of Commerce,
University of
Virginia
Selected Publications by International Research Fellows
Balleisen, E.J. : Corporate Reputation Roundtable –The Ambiguities of
Business Fraud and Entrepreneurial Reputation in Progressive-Era America.
Business History Review, Winter 2013, Volume 87/4, 627-642.
Elsbach, K., Hsu, G.: Explaining Variation in Organizational Identity
Categorization, Organization Science, Volume 24 (4), July-August
2013, pp. 996-1013.
Balleisen, E.J., Brake, E.K.: Historical perspective and better
regulatory governance: An agenda for institutional reform. Regulation
& Governance, 2013;- Wiley Online Library.
Jackson, G. and Brammer, S.: Grey areas: irresponsible corporations
and reputational dynamics, Socioeconomic Review Vol 12 (1): 153-218.
Devers, C.E., McNamara, G., Haleblian, J., Yode, M.E.: Do They
Walk the Talk? Gauging Acquiring CEO and Director Confidence in
the Value Creation Potential of Announced Acquisitions - Academy of
Management Journal.
Deephouse, D.L., Jaskiewicz, P.: Do Family Firms Have
Better Reputations Than Non‐Family Firms? An Integration of
Socioemotional Wealth and Social Identity Theories. Journal of
Management Studies, 2013.
Stern, I., Dukerich, J. M. and Zajac, E.. Unmixed signals:
How reputation and status affect alliance formation. Strategic
Management Journal.
30
King, B. and Mcdonnel, M.H.: Keeping up Appearances Reputational
Threat and Impression Management after Social Movement Boycotts,
Administrative Science Quarterly 58 (3), 387-419.
Scherer, A.G., Palazzo, G., Seidl, D.: Managing Legitimacy in
Complex and Heterogeneous Environments: Sustainable Development
in a Globalized World, Journal of Management Studies, 50 (2)
259–284, March 2013.
Petkova, A.P., Rindova, V.P., Gupta, A.K.: No News Is Bad News:
Sensegiving Activities, Media Attention, and Venture Capital Funding of
New Technology Organizations. Organization Science 24(3), 865-888.
Schultz, M. and Maguire, S.: Identity In and Around Organizations,
The European Business Review, May - June 2013.
Visiting Fellows
We are honoured to have secured the services
and support of Visiting Fellows from the
highest echelons of government, industry, the
media, the professions and other institutions.
The involvement of our Visiting Fellows in the life of the Centre is invaluable. They have taken part in seminars for the staff and students of
the Saïd Business School; played a critical role in our Reputation and Executive Leadership programme (†); provided access to key personnel
for the development of case studies; and generously supported the work of the Centre in numerous other ways. The Centre’s Global
Advisory Board (*) continues to shape our research development.
Sameer Al Ansari †*
Mary Jo Jacobi Jephson
Roland Rudd
Baroness Amos *
Lord Janvrin
Robin Saunders
Norman Askew
Lady Judge
Dr Paolo Scaroni *
Sir Brendan Barber †*
Frederick Kempe
Professor Dr Burkhard Schwenker
Lionel Barber
Justin King
Sir Martin Sorrell
John Barton
John Kingman *
Oliver Stocken *
Sir Victor Blank
William Lawes
Robert Swannell
Sir Roger Carr †
Carol Leonard †*
John Tiner *
Stephen Catlin
Bo Lerenius
David Tyler
Peter Cawdron
Simon Lewis
Lucas van Praag †
Stuart Chambers
Simon Lorne
Mark Warham
Doug Daft *
Stefano Lucchini
Sara Weller
Guy Dawson
Sir Laurie Magnus
Baroness Wheatcroft
Hugo Dixon
David Mansfield
David Wighton
Terry Duddy
David Mayhew
Bob Wigley †*
Steve Easterbrook
Dr Thomas Middelhoff *
John Witherow *
William Forrester
Raymond Nasr †
Rupert Younger
Philippa Foster Back *
Torsten Oltmanns
Gerhard Zeiler
Sir Roy Gardner
Sir John Parker *
Sergey Generalov *
Mike Parker
Anthony Gordon Lennox
Roger Parry
Andrew Gowers
Sir John Peace *
Lord Grabiner *
Sir Ian Prosser
Andrew Grant
Sir Michael Rake †*
Anthony Habgood
Jeff Randall †*
Andrew K Haste
Don Robert *
Andy Hornby *
Manny Roman *
Johannes Huth *
Sir Stuart Rose
PRINCIPAL SUPPORTERS
31
Principal Events
February
Rupert Younger taught the Crisis Programme to a group from
Compass Group plc.
March
Rupert Younger was interviewed by CBC Canada on the
challenges facing the Catholic Church.
April
“With whom, for what, what they signal, and who says?
Opportunities to advance reputation and social evaluation research”
- a seminar hosted by Cynthia Devers, Associate Professor in
the Eli Broad Graduate School of Management at Michigan State
University, and an International Research Fellow with the Centre;
and Yuri Mishina, Assistant Professor of Organizational Behaviour/
Strategy at Imperial College Business School, University of London.
Academy Of Management Review writing workshop: “The Craft Of
Theory Building”. Presented by Cynthia Devers, Eli Broad Graduate
School of Management (as above) and Associate Editor of the
Academy of Management Review.
The Centre hosts our annual Corporate Affairs Academy, an Executive
Education programme designed specifically for corporate affairs
directors, combining academic contributions and presentations by
senior business figures, drawn from among our Visiting Fellows.
May
The Centre co-hosted a Tax and Reputation Conference, with the
Oxford University Centre for Business Taxation and the Novak
Druce Centre for Professional Service Firms, at King’s College
London. Panels consisting of academics from the Centres, senior
business figures, politicians and the media addressed over 200
executives from professional services firms and the media. There
was widespread coverage of the event.
Our Visiting Professor David E. Whetten, Jack Wheatley Professor of
Organizational Studies and Director of the Faculty Development Center
at Brigham Young University, hosted a seminar at the Saïd Business
School entitled “Strengthening the Concept of Organizational Identity”.
A reception for alumni of our executive education programmes, as
well as Visiting Fellows, at Wellington Arch in Hyde Park, London.
June
Research Fellow Liz Dávid-Barrett gave a talk entitled “Towards
Effective Parliamentary Accountability”, at the OSCE, Sarajevo,
Bosnia-Herzegovina. She also gave a talk entitled “Fraud-free Aid,
Advancing Good Governance” at the International Development
conference, Blavatnik School of Government, Oxford.
August
Research Fellows Ken Okamura and Liz Dávid-Barrett gave a
presentation entitled: “The Transparency Paradox: Why Corrupt
Governments Join EITI”, at the Annual Meeting of the American
Political Science Association (APSA) in Chicago.
September
Our fourth annual Reputation Symposium saw Centre faculty,
Associate Fellows, International Research Fellows and guest academics
gather for three days of stimulating and wide-ranging presentations
and debate (see p24), hosted by Corpus Christi College.
Research Fellow Liz Dávid-Barrett presented a paper “Promoting
Parliamentary Ethics in Democratizing Countries: Challenges and
Opportunities” at a workshop on Corruption, Governance and Political
Ethics; Mapping Research” organised by the School of Government
and International Affairs (Durham University), the Essex Centre for the
Study of Integrity, and Transparency International UK.
Second sessions of the 2013 Corporate Affairs Academy programme.
October
Liz Dávid-Barrett wrote a report entitled “Corruption in UK Local
Government: The Mounting Risks”, which was published by the anticorruption organization Transparency International.
Edward Balleisen, an Associate Professor at Duke University, and
International Research Fellow with the Centre, presented a seminar
on “Reputation and Corporate Fraud”. The focus was on 19th century
“mail fraud” in the US, as it affected new entrepreneurial firms such as
Sears & Roebuck and their reputations with the US Post Office.
The Royal Mail Executive Leadership Development Programme,
taught by Rupert Younger.
November
Liz Dávid-Barrett gave evidence to the House of Commons Select
Committee on Communities and Local Government, to inform their
Inquiry into Public Procurement in Local Government.
The Centre’s three-day flagship residential programme: Reputation and
Executive Leadership, for senior executives from global companies.
32
May
Alumni reception at Wellington Arch, Hyde Park,
London - for senior executives who have attended
our programmes, and Visiting Fellows.
September
The second of our annual Corporate Affairs Academy
programmes for corporate leaders, including a
presentation from Anthony Salz (far left) on the Salz
Review into Barclays.
33
Publications and Presentations
Conference papers and seminars
Angwin, D., Meadows, M., Yakis-Douglas, B. “When is strategy?”
Presented at the Academy of Management Annual Conference, Florida, US.
Angwin, D., Meadows, M., Yakis-Douglas, B. Timing in M&A.
Presented at the Strategic Management Society Annual International
Conference, Georgia, US.
Dávid-Barrett, E. “Regulating Parliamentary Ethics in Democratising
Countries”: Workshop on Corruption, Governance and Political Ethics, at
the University of Durham.
Dávid-Barrett, E. and Okamura K. “The Transparency Paradox: Why
Corrupt Governments Join EITI” at the Annual Meeting of the American
Political Science Association, Chicago.
Dávid-Barrett, E. “Towards Effective Parliamentary Accountability”:
OSCE, Sarajevo, Bosnia-Herzegovina, June 2013.
Dávid-Barrett, E. “Fraud-free aid”, Advancing Good Governance
in International Development conference, Blavatnik School of
Government, Oxford, June 2013.
Moss Cowan, A. “Toward Materializing a Logic Change: Using
Institutions to Adjust Emotional Intensity”, an Emotions and Institutions
academic workshop at York University, Toronto.
Zavyolova, A. “The Benefits and Burdens of Reputation: The Joint
Roles of Organizational Identification and Reputation Following Negative
Events”; 17th International Conference on Corporate Reputation, Brand,
Identity and Competitiveness, Barcelona, Spain, June 2013.
Dávid-Barrett, E. and Okamura, K. (2013) Too high a standard? The
unintended consequences of anti-bribery laws in developing countries.
Working Paper.
Yogev, T. and Ertug, G. (forthcoming). “Global and Local Flows in the
Contemporary Art Market: The Growing Prevalence of Asia.”
Book chapter in On the Globalization of Contemporary Art Markets
(OUP), Olav Velthuis and Stefano Baia-Curioni (eds.).
Dávid-Barrett, E. “Corruption In local government: The mounting
risks”; report published by the anti-corruption organization
Transparency International.
Chen, Z. Morrison, A. and Wilhelm, W. Traders vs. relationship
managers: Reputational conflicts in full-service investment banks.
Working paper.
Chen, Z. Morrison, A. and Wilhelm, W. Investment bank reputation
and “star” cultures. Accepted for publication.
Harvey, W.S., Mueller, M. and Morris, T. How are reputation and
quality built within management consultancy firms? Working Paper.
Harvey, W.S., Mueller, M. and Morris, T. Reputation interactions and
pathways within a management consulting firm. Working Paper.
Harvey, W.S., Mueller, M. and Morris, T. Building reputation in
emerging markets: The case of a management consulting firm in China.
Working Paper.
Morrison, A., Schenone, C., Thegeya, A. and Wilhelm W. Investment
banking relationships: 1933-2007. Working paper.
Zavyolova, A. “The Dark Side of Prominence: Organizational
Consequences of Seeking Media Coverage”; 17th International
Conference on Corporate Reputation, Brand, Identity and
Competitiveness, Barcelona, Spain, June 2013.
Morrison, A., Wilhelm, W. Trust, reputation and law: The evolution of
commitment in investment banking. Working Paper.
Journal articles, working papers,
books, reports
Whittington, R., Yakis-Douglas, B. and Ahn, Kwangwon.
(pre-submission) Just talk? Strategic plan announcements and
market reactions.
Burt, R.S., Merluzzi, J. Path dependent network advantage: The
punctuated brokerage hypothesis. Working paper.
Yotov, Y. V., Korschun, D. and Dimitrova, B. Country reputation and
international trade: a structural gravity approach. Working Paper.
Burt, R. S. and Merluzzi, J. “Embedded Brokerage”; pp 161-177 in
Research in the Sociology of Organizations, edited by D. J. Brass et al.
Emerald Group Publishing.
Zavyalova, A., Pfarrer, M.D. and Reger, R.K. The benefits and burdens
of high reputation: The joint role of organizational identification and
reputation following negative events. Working Paper.
Dávid-Barrett, E. and Okamura, K. (2013) The transparency
paradox: Why corrupt governments join the Extractive Industries
Transparency Initiative”. Working Paper 38, European Research Centre
for Anti-Corruption and State-Building.
Zavyalova, A., Pfarrer, M.D. and Reger, R.K. The good, the bad, and
the unknown: The downside of media prominence. Working Paper.
34
Noe Thomas, H., Rebello Michael, J. and Rietz, T. Ownership
structure, organizational reform and corporate reputations.
Working paper.
35
Saïd Business School
University of Oxford
Park End Street
Oxford
OX1 1HP
United Kingdom
© 2013 SAID BUSINESS SCHOOL.

2013 - Saïd Business School

Transcription

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