Reputation as Reservoir: Buffering Against Loss in Times of Economic Crisis

摘要: The premise of this study is that a good reputation serves as an intangible asset which can help protect the organization in times corporate crisis — public-relations terms, ‘reservoir goodwill’ presumption. Using data from stock market crashes 1987 and 1989, examined whether companies with better reputations, measured by Fortune's annual ratings America's largest corporations, suffered less severe declines value. Results show no significant difference between higher lower reputations 1987, when dropped over 20 per cent one day. During crisis, there was high volume automated computer trading great deal investor panic may have precluded rational investment decision making. In however, took sudden, unexpected downturn, prices significantly than those not favored such positive standing. This supports hypothesis provide reservoir goodwill buffers decline uncertainty economic turmoil (short panic), underscoring importance attentive management.