Influence your firm's resilience through its reputation: Results won't happen overnight but they will happen!

Much of the reputation literature tends to approach the relationship between firms’ reputation and performance as one of a direct causal relationship. We propose here that to improve our understanding of corporate reputation it is necessary to re-conceptualise reputation as having a more indirect influence. We highlight that reputation acts as a source of resilience which provides firms with an enhanced ability to adapt when faced with external difficulties as well as allowing the firm to rebound following a performance decline. Rather than relying on traditional measures of reputation, such as Fortune ratings, this research analysed the content of 10,582 Australian firms’ annual reports over 17 years to identify what senior executives communicate to their stakeholders. These results were then subjected to survival analysis which identified that firms with superior financial and service reputation tended to outperform firms without such standing, across three objective measures of financial performance.