Applied Information Management

Emergent Practice in Online Corporate Reputation Management

In Brief: The information found online about corporations is generally accepted by the business community as a contributing factor in shaping consumer perceptions and opinions of corporations. Bunting and Lipski (2000) argue that these perceptions and opinions, regardless of the veracity, are equally as impactful on the organization's reputation as the organization's actions. Recent observations show how a few vocal opponents can foment waves of criticism against companies. According to Lee and Park (2007), this is potentially problematic, as a recent upsurge of social media has made commentary on the Internet pervasive and popular.

Consumers care most about how fair companies are to them.

The purpose of this study is to examine existing online corporate reputation management initiatives in order to identify key factors that influence how stakeholders perceive the organization. Bunting and Lipski (2000) characterize an online corporate reputation management initiative as having one or more of the following four features: (a) engaging opposition, (b) direct communication, (c) third-party endorsement, and (d) building relationships.

The outcome of this study is framed as a set of three guiding principles for how to manage online corporate reputations. Guiding principles, summarized in Figure 1, are intended to give corporate communication managers and public relation professionals a governing framework for the management of online corporate reputation that allows organizations to meet potential threats to credibility and develop reputation by proactively engaging the Internet culture.

Guiding principles for managing online corporate reputations
Principle #1
Demonstrate Sincerity and Respect as the Essence of All Exchanges
The Internet has given dissatisfied stakeholders, including disgruntled employees, a voice. Use of two-way dialog among stakeholders provides organizations with new tactical options for building and protecting corporate reputation online. Successful online corporate reputation management requires a display of sincerity and respect, as the essence of engaging stakeholders. A defensive reaction or a pronouncement without an option for dialog simply fuels further discontent. Bennett and Martin (2008) find that an overwhelming number of organizations wrongly believe that complaining employees and consumers care only about having their grievances resolved, and not about being treated with respect. The best way to respond is to make sure that the process used in reaching any resolution is fair. Organizations therefore should not only provide an apology, but an explanation of the company's actions, and attend to other relatively inexpensive procedural and interactional components of the resulting decision.
Principle #2
Use a Multi-Step Approach for Effective Online Reputation Management Initiatives
Reputation management online is a full-time job, governed with a constant vigilance. Successful online corporate reputation management requires a multi-step approach to online communications initiatives. This means that the more features that are incorporated into an online corporate reputation management initiative, the greater likelihood of success. Organizations must assume a holistic view of online stakeholders by taking into consideration:
  • The social networks within which they operate,
  • The impact of third party knowledge on their sense of trust in the organization online,
  • Understanding how stakeholders are all interdependent.
Social media used for direct communications alone is not effective; it needs to be coupled with building relationships, as third parties heavily influence online communication.
Principle #3
Integrate the Corporate Communications Function Within the Organizational Core
Organizations need to recognize the evolution of the business environment and restructure their organizations to meet the communications challenges the Internet culture brings. Successful online corporate reputation management requires integration of the corporate communication function into core operations that manage the entire organization. For example, traditional departmental lines between marketing, advertising, and public relations are becoming blurred. By developing a more integrated corporate communications function throughout the organization, managers are more likely to ensure that the organization acts reputably, as a whole. There are additional factors that support the need to develop a highly-integrated function:
  • An increasing regulatory environment,
  • Sophisticated and converging stakeholders,
  • Organizational growth with increasing complexity, and
  • The Internet and its wide-ranging technologies.

Figure 1—Guiding principles for the management of online corporate reputation.


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AIM alumnus Chae Pak

Research Paper Author: Chae Pak, RowHouse LLC—2010 AIM Graduate

Abstract: The Internet culture presents a paradigm shift for corporate communicators; organizational success is increasingly dependent on stakeholder activities online. This study examines online corporate reputation management initiatives, through analysis of literature published since 2000. Three overarching principles emerge: (a) demonstrate sincerity and respect as the essence of all exchanges, (b) use a multi-step approach for the most effective online reputation management initiatives, and (c) integrate the corporate communications function within the core of the organization.

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