The Gestalt of Corporate Reputation and its Impact on Wall Street Anna Karenina vs. The Great Gatsby
Abstract
In response to the growing focus on intangible assets as sources of competitive advantage, this study explores the multidimensional nature of corporate reputation and its implications for firm performance. While prior research has often examined corporate reputation from an aggregated perspective, we address the gap concerning the relative importance of its subdimensions (organizational culture, CSR, innovativeness, customer satisfaction) and the gestalt of corporate reputation. Specifically, we question whether all subdimensions contribute equally to financial performance and whether a balanced or imbalanced gestalt is more beneficial. Using a portfolio analysis, we find that the relative importance of organizational culture is a key driver of financial performance. Additionally, our results suggest that an imbalanced gestalt, where certain subdimensions dominate, leads to stronger financial performance compared to a balanced approach, where all subdimensions are equally high. This balanced gestalt introduces the "Anna Karenina Principle" to corporate reputation literature while we also propose the "Great Gatsby Principle", referring to an imbalanced gestalt, as a contrary principle. These findings offer a nuanced understanding of corporate reputation’s performance implications, providing both theoretical contributions to strategic management literature and practical guidance for reputation managers on resource allocation and for portfolio managers on stock selection.
Date Issued
2024
Publication Type
Conference Item
Subjects
Corporate Reputation
•
Firm Performance
•
Gestalt Perspective
•
Stock Returns
Language(s)
en
Additional Credits
Access(Rights)
metadata.only