Kevin T. Jackson's Building Reputational Capital: Strategies for Integrity and PDF

By Kevin T. Jackson

This sensible advisor finds easy rules of integrity and equity with which companies can construct a permanent recognition. the writer outlines the benefits of an effective popularity, describes the important position the firm's chief needs to play, and masses extra.

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Additional resources for Building Reputational Capital: Strategies for Integrity and Fair Play That Improve the Bottom Line

Example text

Nevertheless, many laws help to buffer nonshareholder groups from rampant violations of their implicit contracts. Residual risk. Problem: The contractual model says that shareholders carry all residual risk. That's why it grants them control over the firm. In reality, though, other constituencies, such as employees and suppliers, shoulder risk too. If you think about it, savvy shareholders with well-diversified portfolios bear comparatively little risk. The idea, though, is that they lay claim to the firm's residual returns.

That's why many start-up companies offer employees shares of stock or stock options. And groups besides shareholders that carry residual risk sometimes win a seat on the board of directors. Wealth and power imbalance. Contracting groups have unequal bargaining power. The imbalance shakes out in the unfair distribution of the wealth that a firm generates. Powerless, disenfranchised workers can't bargain well in a cluster-of-contracts firm. Inequality of bargaining power is a big problem, especially in developing countries.

The company really is more than just the sum of its images. This sense of reputation is the one worth singling out because it is directly linked to the firm's moral character and its virtues. Here's a first step to getting a handle on reputation reality. Ask these questions: • Who counts? Which constituencies does your firm need to build a solid reputation with? 1, principles are grouped according to their relevance to key constituencies. 1: Reputation Checklist Reputation Driver Overall Generates value for all constituencies Follows the spirit as well as the letter of the law Combats corruption and bribery Respects human rights in all countries of operation Promotes economic and social development in the Third World Is environmentally friendly Vision and Leadership Has credible leadership Has leaders with clear vision for future Has leaders who recognize and seize market opportunities Clients and Customers Offers quality that meets/exceeds customer expectations Offers good customer service Ensures health and safety of customers, discloses risks Doesn't create products that harm the environment Shows respect for people in products, marketing, and advertising Employees and Associates Provides jobs and compensation that allow good living conditions Preserves employee health, safety, and dignity Listens and responds to employee concerns Handles workplace conflicts/negotiations in good faith Accords equal treatment and opportunity regardless of age, gender, race, religion, disability Helps employees develop transferable skills and knowledge Sensitive to unemployment and dislocation problems Shareholders and Investors Shows prospects for future growth Maintains strong record of profitability Obtains a fair and competitive return on investment Discloses accurate, relevant information Conserves, protects, and increases investors' assets Respects investors' input (suggestions, complaints, formal resolutions) Deploys corporate assets for business, not personal, use Chapter 4: How to Gauge Reputational Capital Is it met?

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