Accounting for Corporate Reputation

(Hardback)

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This work examines conceptual, empirical and practical issues associated with corporate reputation. Emphasising the importance of the roles of corporate social disclosure and organisational effectiveness, the authors stress the need for an integrative framework in explaining the nature of corporate reputation. Utilising valuable data provided by "Fortune" magazine, the book provides both an historical evaluation of reputational rankings of "Fortune's" 500 firms for the period 1987-1991 and insights as to the market reaction to disclosure of these rankings. These can be utilised by firms in building reputation, investors in evaluating their strategies, and public policy officials in dealing with corporations. Following an extensive review of the conceptual foundations of corporate reputation, namely corporate social performance and disclosure and organisational effectiveness, the authors present explanatory and predictive models of corporate reputation. They then examine the potential relationship between corporate reputation and shareholders' wealth - the market reaction to reputation signals. Their findings suggest that a firm's benefit from the disclosure of reputation signals will depend on size and expectations, and that such disclosure appears to lead to a significant, lagged market reaction. Based on a detailed analysis of the 1987-1991 performance of US firms on eight key attributes of reputation, the authors conclude with insights that should be of use to corporations and investors.

Author Bio

AHMED RIAHI-BELKAOUI is Professor of Accounting at the University of Illinois at Chicago. He is the author of more than twenty books on finance and accounting, including Miltinational Financial Accounting (Quorum Books, 1991), Cost Accounting: Theory and Practice (Quorum Books, 1991), Judgement in International Accounting (Quorum Books, 1990), and Determinants of Executive Compensation (Quorum, 1991) with Ellen Pavlik. ELLEN L. PAVLIK is Assistant Professor of Accounting at Loyola University Chicago. She has coauthored articles in The British Journal of Management and Managerial and Decision Economics, as well as Determinants of Executive Compensation (Quorum Books, 1991) with Ahmed Riahi-Belkaoui.