Download Strategic action around reputation

Accreditation and rankings
Reputation and Legitimacy: Accreditation and Rankings to Assess
Organizations
Jennifer L Bartlett
Josef Pallas
Magnus Frostenson
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Accreditation and rankings
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Abstract
A key perspective on reputation is that of assessment. Much of the communication
literature focuses on the influence organizations have on impression formation. In this
chapter, however, we suggest that in order to understand reputation assessment, it is
also important to understand the related concept of legitimacy. We address two
approaches to understanding reputation in this chapter: accreditation and ranking.
Accreditation alludes to concepts of legitimacy in which firms may acquire credibility
by meeting formalized standards of certification. Ranking deals with categorizing and
rating organizational reputations so that they may be assessed relative to one another.
The chapter explores the various ways in which the mechanisms of accreditation and
ranking operate and the role of social actors in developing and applying them.
Ranking systems that provide the mechanism for comparing organizations and
assessing their relative value are also explored.
Keywords: accreditation, communication, legitimacy, rankings, reputation,
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Reputation and Legitimacy: Accreditation and Rankings to Assess Organizations
The notion of corporate reputation has developed since the 1980s into a concept that
is widely used both in the academy and in practice. While scholars differ on the specifics of
defining the term reputation (Fombrun & van Riel, 1997), there is greater consensus around
how it has been used in the literature. Barnett suggests that the multitude of reputation
definitions have been used in three ways: awareness, assessment, and as an asset. The
predominant perspective is of reputation as assessment (Barnett et al., 2006). Such a
perspective reflects Fombrun and van Riel’s (1997) assertion that “a corporate reputation is a
collective representation. It gauges a firm’s relative standing both internally with employees
and externally with stakeholders” (p. 10).
Relative assessment of organizations, however, suggests that first organizations meet
standards in order to then be judged in relation to each other. One way to consider this twopart phenomenon is to consider the related concepts of legitimacy and reputation (Deephouse
& Carter, 2005). On the one hand, reputation is about the assessment of future value and
relativity (Fombrun & Shanley, 1990). Legitimacy, on the other hand, relates to meeting
social expectations (Deephouse & Carter, 2005). To date, much of the communication
literature has focused on an instrumental perspective of maximizing the way organizations
can influence the impressions it makes on others and therefore its reputation (van Riel, 1997).
This opens the opportunity, however, to understand more deeply the mechanisms through
which organizations gain legitimacy and relative standing, both of which are collective
phenomena. We do this by examining the relative standing of organizations (reputation), and
the processes of accreditation and ranking that reflect this. We also pay attention to the roles
of various social actors in this process, - in particular, the role of organizations in shaping
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perceptions and the role of external social actors, - with an emphasis on those that can exert
soft regulatory pressure on organizations and ranking systems.
Fombrun and van Riel’s (1997) seminal piece on the reputational landscape noted that
there are multiple approaches to corporate reputation—economic, strategic, marketing,
organizational, sociological, and accounting. Marketing and organizational approaches tend
to favor personalized assessment and subjective perceptions of firm. Economic and strategic
approaches incorporate both the antecedents and consequences of reputation for firm values.
The accounting model focuses on both accounting for and reporting on reputation, which also
includes attempts to quantify and account for intangible firm assets such as reputation. For
sociologists, the interest is in prestige and status and how reputation, with its emphasis on
comparative stature, is conceptualized. To shed light on legitimacy, reputation, accreditation,
and ranking, we draw on a sociologically-informed perspective. This provides insights into
the mechanisms of how socially agreed standards emerge against which organizations and
their reputations are compared and rated. It also yields insights into the social actors involved
in this process and the implications for research into reputation. The reputation literature has
focused on the raft of proprietary models organizations used in practice to make such
assessments (Hillenbrand & Money, 2007), and we consider the role of these models in the
accreditation and ranking process.
We address two approaches to understanding reputation in this chapter: ranking and
accreditation. Ranking is about categorizing and ranking organizational reputations so that
they may be considered in comparison to others. Accreditation alludes to concepts of
legitimacy in which firms may acquire credibility by meeting formalized standards of
certification. Central to understanding this perspective on reputation is the concept of
legitimacy, which is widely used in sociological perspectives of organization studies. Using
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this as a theoretical underpinning, the chapter explores the various ways in which these
mechanisms operate and the role of social actors in developing and applying them. Ranking
systems provide the mechanism for comparing organizations and assessing their relative
value; theoretical and empirical work around reputation assessment is presented and tensions
revealed. Finally, directions for future research are discussed.
Legitimacy and reputation
Legitimacy is the central imperative of neo-institutional theory, the dominant
perspective in organization theory (Greenwood, Oliver, Suddaby, & Sahlin, 2008).
Institutional accounts dealing with the issue of legitimacy tend to emphasize that legitimacy
for groups of organizations depend on the adaptation of organizational practices or structures
to “symbolic myths” reflecting normative ideas or assumptions in society (Meyer & Rowan,
1977). While this discussion often focuses on groups of organizations or the overarching
field, legitimacy has, in recent decades, become a concept that is looked upon strategically in
the management literature. Typical of the management literature is the treatment of
legitimacy as a strategic resource (Pfeffer & Salancik, 1978). This means that legitimacy,
whether moral (building on value correspondence), pragmatic (resting on self-interested
assumptions), or cognitive (reflecting meaningfulness or comprehensibility), is understood at
the organizational level as something that could and should be managed in order to get hold
of other resources (Suchman, 1995). Research on legitimacy has, one could claim, gone
through a “strategic turn” in which the concept has been transformed into something that the
individual organization can, at least to some extent, actively manage through manipulation or
other strategic activities (Suchman, 1995; Deephouse & Suchman, 2008). This development
has also implied the proximity of legitimacy to the concept of reputation, which is also
dependent on evaluations made in the organizational environment (Fombrun, 1997).
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The link between legitimacy and reputation is clear. For instance, Suchman (1995, p.
574) defined legitimacy as “a generalized perception or assumption that the actions of an
entity are desirable, proper, or appropriate within some socially constructed system of norms,
values, beliefs, and definitions”. On the other hand, Deephouse and Suchman (2008, p. 59)
described reputation as “a generalized expectation about a firm’s future behavior or
performance based on collective perceptions (either direct or, more often, vicarious) of past
behavior or performance”. While the generation and sources of both legitimacy and
reputation are more or less similar, reputation seems to be an issue at the organizational level
that involves, to a higher degree than legitimacy, future expectations on behavior. Reputation,
thus, is a continuous measure that is also relative to other organizations in a certain sector or
other sectors. Its essence, according to Deephouse and Carter (2005), lies in comparisons
among organizations. As they noted in a study of commercial U.S. banks, and in line with
traditional assumptions about legitimacy, isomorphism (the pressure to create similar
structures and processes within a field) increases legitimacy. But this does not imply effects
on reputation for each organization active in the specific field; rather, the reputation of an
organization is relative to other organizations in the sector. Deephouse and Carter (2005) also
noted that higher financial performance tends to increase reputation, but does not increase the
legitimacy of high performing banks.
The strategic turn in legitimacy research underscores the fact that legitimacy can be
understood at different levels. Societal legitimacy is closely linked to the existence of
overarching ideas—those that are successful or popular with a strong capacity of diffusion.
By adopting or conforming to such ideas (often in a modified or “translated” form, see Sahlin
and Wedlin, 2008), organizations are perceived as legitimate in a social context. What is
striking when one turns to organizational legitimacy at the micro-level is the fact that
organizations adopt different strategies whose outcomes are dependent on the ruling or
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dominant master-idea, such as shareholder value or the ideology of globalization. This means
that there is always a discursive backdrop to organizational processes for legitimacy.
Mazza and Alvarez (2000) suggested that legitimacy is a concept that is also valid for
management ideas or practices. Their analysis, much like accounts of management ideas as
fads (e.g., Abrahamson, 1996), suggests that organizations can to some extent obtain
legitimacy by adopting management concepts or practices that are in vogue. This is a form of
indirect legitimation of organizations, where the adoption or existence of a certain practice
(cf. activities related to corporate social responsibility) may in itself contribute to
organizational legitimacy. Management ideas may originate at some authoritative center
(Røvik, 2004) and are diffused through management education institutions, consultants, the
popular press, or other actors. From a managerial point of view, it is, perhaps paradoxically
enough, possible for organizations with high legitimacy to deviate from established practices
(Sherer & Lee, 2002). Legitimacy thus enables change and provides a degree of freedom for
developing new practices or structures. One consequence of this is that legitimacy—most
easily gained by conforming to environments (Suchman, 1995) —may itself be a resource
that allows for heterogeneity rather than homogeneity. If so, there is a possibility for business
schools, taking them as an example, to develop programs, practices, or structures deviating
from standards.
The concept of legitimacy allows us to consider the role organizations play in seeking
to manage the way others see them, and as such, lays the foundations for assessing
organizational reputation relative to others. This has tended to be a central role of
communication. Strategic communication attempts seek to manage impressions of the
organization and its activities. Strategic communication by outsiders to the organization, such
as special interest groups and activists, also play a role in the assessment of organizations in
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comparison to others. Communication is also used to created broader social standards against
which organizations are assessed. This leads us to consider the role that accreditations and
rankings play in reputational assessment.
Accreditations and Rankings: The Signals of Legitimacy and Reputation
Contemporary organizations are subjected to organizational as well as institutional
pressures to be accountable for their activities. These pressures are not only expressed in
terms of financial and economic effectiveness and adjustment to legal and regulatory
constraints; the organizations are also expected to project and justify their commitments to
moral values and social norms and expectations (Djelic & Sahlin, 2006; Engwall et al.,
forthcoming; Scott, 2000). In many cases, these expectations are shaped by other societal
institutions outside the organization’s control (Beck, 1994), which expose the organizations
to a number of reputational and legitimacy risks (Power, Scheytt, Soin, & Sahlin, 2009;
Solove, 2007). This is especially important in times when organizations operate in an
environment characterized by increased distrust and lack of confidence in corporate affairs
(Frostenson et al., 2010).
The institutional demands come, however, only partly in terms of coercive measures.
Instead they take a form soft regulation—rules and norms that emerges through the work of
non-hierarchical actors that scrutinize, monitor, and evaluate organizations and their activities
(Jacobsson & Sahlin-Andersson, 2006, p. 259; Mörth, 2004). Regulation, both hard and soft,
has led to the emergence of a wide variety of external evaluations and audits that describe and
assess how well organizations deal with and respond to the different pressures and
expectations (Power, 1997; Saunder & Espeland, 2009; Wedlin, 2007). These external audits
are central to what Suchman (1995) described as evaluative and cognitive dimensions of
legitimacy (see also Meyer & Rowan, 1977 and DiMaggio & Powell 1983). Such external
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auditing, in its various forms, operates as a tool for defining the constitutional properties of
organizations. That is to say, auditing reflects organizational ability to gain or defend a
favorable position in relevant societal contexts such as industries, fields, or entire societies
(Power 2007; see also Deephouse & Carter, 2005; DiMaggio & Powell, 1983).
Societies are not static or monolithic, however, and the evaluative processes do not
represent absolute or consistent values and norms. In this context, the various auditing firms
and agencies take an active role in production of codes, rankings, certifications, and
accreditations through which organizations such as business firms, universities, museums,
and political parties are assessed and evaluated (Sahlin-Andersson & Engwall, 2002; Wedlin,
2007).
In the following section, we will focus on two major forms of external audits—
accreditations and ranking—and the way they signal the legitimacy and reputational status of
organizations. In line with Deephouse and Carter’s (2005) discussion of the difference
between legitimacy and reputation, we see ranking as mainly based on the “relative standing
or desirability” of an organization, whereas accreditation focuses on “meeting and adhering
to the expectations of a social system’s norms, values, rules and meanings” (Deephouse and
Carter, 2005, p. 331; McKee, 2005; Schwarz & Westerheijden, 2005).
Similarly, Hedmo et al. (2006) argued that rankings and accreditations differ with
respect to the underlying principles of what they focus on: “while accreditation rest on
inclusion, ranking rest on exclusion. A ranking puts in place a hierarchy between those
included, and the inclusion of some means the exclusion of others” (p. 322). Thus, rankings
provide not only an external assessment of organizational reputation, they also signal the
positional status of an organization vis-à-vis its different stakeholders (Martins, 2005; Sauder,
2008). This means that whereas some forms of auditing—such as accreditations and
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certifications—emphasize legitimacy as based on conformity with prevailing institutional
values and norms, other forms—such as rankings and awards—work on the basis of how well
an organization scores on these values and norms relative to other organizations sharing same
institutional environment (Wedlin, 2007, p. 25).
The legitimacy signals expressed by accreditation processes testify to an
organization’s ability and desire to imitate the models and prescriptions included in the
accreditation criteria (Hedmo et al., 2005, p. 203). By their inclusive and imitative function,
accreditations serve to spread and stabilize prevailing institutional values, rules, models, and
ideas among organizations occupying same social landscape (cf. DiMaggio & Powell, 1983,
p. 152; Hedmo et al., 2006, p. 309).
Ranking and its impact on an organization’s reputation influences the status positions
of organizations and embeds organizations in status hierarchies that shape relations within
relevant fields (Rao, 1994; Sauder, 2006). Ranking and reputational status thereby also signal
an organization’s propensity to actively adopt and respond to revised or innovative methods,
criteria, and principles for assessment (Sauder, 2006). Thus, rankings order organizations
with respect to their abilities, values, and assumptions, not only in terms of what is
considered proper and legitimate, but also what is considered competitive and distinctive
(Elsbach & Kramer, 1996; Martins, 2005; Rao, 1994).
Ranking systems
Much of the work on rankings in the reputation literature involves identifying and
understanding the various ranking systems available. While there have been various forms of
public rankings of organizations conducted especially through the media, the surge of interest
in and proliferation of ranking systems has emerged concurrent with the emergence of
reputation in the literature. The Reputation Institute identified 183 ranking systems across 38
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countries (Fombrun, 2007). The majority of the lists were based on whether an organization
was a good place to work for, or on overall reputation. The remaining public lists rated or
ranked firms on the basis of citizenship, performance, innovation, governance, or products
(Fombrun, 2007). The reputation rankings are not based on financial performance but on
“soft(-er)” factors such as citizenship and governance (Fombrun, 2007).
The variety of reputation ranking lists and the criteria on which they assess firms are
in themselves the subject of study (Campbell & Sherman, 2010). One of the chief issues with
the reputation ranking lists is being able to compare the outcomes for each firm. There are
two key reasons for the differences in ranking outcomes for firms between ranking systems.
The first is the methodology used to assess reputation. The second is the differences in the
criteria upon which firms are assessed (Schultz et al., 2001). These differences create
significant variation between which organizations feature high on the lists and raise questions
about the value of reputation rankings as a measure of organizational performance and value
(Portfolio.com, 2008).
From a communicative perspective however, high rankings are an important indicator
that communicate with stakeholders about the organization’s relative worth. As such,
achieving a ranking, especially a high level one, provides a distinctive attribute that forms
part of an organization’s identity. Such symbols of status provide useful references to
facilitate identification and alignment with an organization by both insiders and outsiders to
the organization (Hatch & Schultz, 1997). This again highlights the strategic turn
organizations have taken in seeking to manage legitimacy and reputation.
Strategic action around reputation
If reputation is relative and future-looking, the role of legitimacy accreditation and
rankings play important roles in the mechanisms of reputation. These roles rely on two
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elements which we will now discuss—the strategic communication work of organizations to
show that they are legitimate and to highlight the dimensions in which they are distinctive;
and the assessment work by a variety of social actors to rate organizational legitimacy.
Organizations’ strategic attempts to manage legitimacy
The journal Corporate Reputation Review highlights the fact that understanding
reputation is a multidisciplinary arena that brings together various views around the concept
(Fombrun & van Riel, 1997). Earlier in this chapter, we focused on the contribution that
sociological perspectives and organization theory make to understanding the accreditation
and ranking dimensions of reputation. This literature noted the strategic attempts of various
social actors to shape perceptions of organizational compliance and alignment with social
standards and to make comparisons between organizations and their attributes. This
highlights the role of communication in the phenomena surrounding reputation, a role
considered in both the management and communication literatures.
Within the management literature, one stream of legitimacy research focuses on the
rhetoric for obtaining legitimacy for action. As Erkama and Vaara (2010) noted, legitimacy is
actively sought through different rhetorical strategies. The dynamics of legitimation involve
justifying actions, decisions, and structures by means of well-known rhetorical strategies such
as logos (rational arguments), pathos (emotional arguments), and ethos (reference to
authority), as well as what these authors call autopoeisis (auto-communication or selfinvented narratives about who we are; for example correspondence with self-formulated
strategies or visions) and cosmos (a reference to “predetermined” inevitable change
mechanisms at a higher societal level). Such strategies are of course not only a possibility for
management, but also a possibility for individuals or groups trying to resist management
action or plans, for example, those related to shutdowns of production sites. From this
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perspective, legitimacy is a resource emanating from a discursive struggle. As Vaara and
Tienari (2008) noted, such a struggle may involve the use of different discursive elements
like authorization (legitimation by referring to authority), rationalization (legitimacy based
on perceived utility of action), moralization (values-based legitimation), and mythopoesis
(legitimation through narratives). Erkama and Vaara (2010) see a particularly prominent role
for autopoeisis as a strategy for advancing legitimacy in a sensitive shutdown case of a
production site. This strategy has to do with what the organization formulates its nature and
identity to be. Institutions that have deeply rooted self-images (such as educational
institutions) often try to strengthen this identity through spelling out codes and other
documents that endorse this self-image.
Communication scholars have also contributed to our understanding in numerous
ways. Corporate Reputation Review emphasizes the role of corporate communication in
managing reputation. Van Riel (1997) suggested that strategic and integrated corporate
communication is one of the most promising ways for organizations to manage their
reputation. Van Riel (1995) argued that coordinated communication activities from
advertising, marketing, and public relations departments within the organization are
significant contributors to perceptions of the organization. This view suggests that
communication about the organization’s identity results in images of the organization. From
this perspective, the images held by multiple stakeholders over time create the reputation of
an organization (van Riel, 1995).
Such communication is not only an externally focused matter. Communication to
employees is also the subject of significant attention in the literature. Research on image and
identity highlights the integral role of employees in the process. This was first noted with the
suggestion that employees play a significant role in influencing the image of an organization
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(Kennedy, 1977). Every time an employee has an interaction with another stakeholder,
especially one outside the organization, he or she is bringing to life the identity of that
organization (Hatch & Schultz, 1997). Employees play an active role both in presenting the
corporate identity to those outside the organization and in translating insights into how the
organizational image back into the organization which can further shape the identity and
image symbols (Hatch & Schultz, 2002). For example, Dutton, Dukerich, and Harquail
(1994) showed in the Port Authority case that when an organization’s legitimacy was
questioned, that employees’ individual identity was also challenged. In the Port Authority
case, employees were active in influencing management to change corporate practices to
influence the organization’s legitimacy. This suggests that organizations need to actively
substantiate their reputation with employees across the organization. Fombrun (2007) argued
that it is imperative to communicate reputation to managers as well as how to use it and what
it means for them. Similarly, Dowling (2007) discussed the importance of storytelling with
employees in order to continue to highlight and substantiate the distinctive elements of the
organization’s reputation, and to therefore replicate these areas of differentiation.
This focus on the role of corporate communication in influencing reputation has also
led to suggestions that this organizational function is in fact responsible for reputation. This is
an assumption and claim made often by practitioners and is reflected in the number of public
relations firms that describe their practices as reputation management (Bartlett & Hill, 2007).
However, this claim is problematic as it can lead to claiming responsibility for aspects of
reputation which are outside the control of the communication professional (Hutton,
Goodman, Alexander, & Genest, 2001). Hutton et al. (2001) noted that because reputation is
considered on a range of organizational attributes such as product quality, governance,
leadership qualities, and the like, the communication professional cannot be responsible for
such attributes and therefore for reputation as a whole.
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Particular attention has been paid to the role of the media in relation to legitimacy,
reputation, and ranking. This has been examined from two perspectives. The first has focused
on the influence of the media as a communication channel on reputation. Given the prior
discussion on corporate communication, this perspective views the role of the media in firms’
strategic communication attempts to influence and manage reputation. The second
perspective, which we will discuss later, focuses on the media as social actors in their own
right. This allows us to consider the media’s role in ranking reputations.
As Deephouse and Suchman (2008) noted, studies are increasingly using different
sources through which legitimacy can be measured or estimated—for example, media
statements, certification, licensing, endorsements, and links to prestigious organizations. This
management perspective highlights the role of media in disseminating information about
organizational attributes that in turn contributes to the perception of an organization’s
legitimacy. From the communication perspective, Carroll and McCombs (2003) investigated
the influence of media coverage on reputation. Drawing on the influential work on the role of
media agenda setting, Carroll and McCombs (2003) posited that just as media agendas can
influence the salience and attributes of political issues and opinions, media coverage can also
influence opinions about corporate reputation. For example, media coverage about an
organization achieving a particular certification or accreditation then influences opinion about
that organization. The individual level effects on opinions contribute to how organizations
and corporate activities are perceived to comply with social and institutionalized norms
(accreditation), but also to a cognitive ranking schema of organizations in relation to one
another.
The media also play a role as social actors in their own right in shaping perceptions of
an organization and influencing elements related to reputation. Through this lens, the media
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are playing a purposive role in reputation and legitimacy management. In the organization
theory literature, the role of the media has been understood as that of a legitimating agent
(Deephouse & Suchman, 2008), conferring legitimacy on organizations and corporate
practices. This provides a useful perspective from which to consider the role of both
accreditation and ranking. Rather than seeing the media as merely providing information
about an organization for individual audience members to make sense of, this perspective
highlights the role of the media as social actors in determining what is appropriate at a
societal level.
In such a view, the role of the media is emphasized—alongside those of other
institutional intermediaries such as academia, consultants, and industry associations—as
central for building an organization’s reputation. The extent and patterns of media coverage
are directly involved in the way an organization’s reputation accumulates and evolves, not
least by way of the media’s varying focus on different reputational components such as
visibility, level of distinctiveness, and tenor (cf. Greenwood, Li, Prakash, & Deephouse,
2005; Rindova, Petkova, & Kotha, 2007). As Pollock and Rindova (2003) found, media
visibility has a strong effect not only on name recognition of a firm, but also on the firm’s
market and financial performance (see also Jonsson & Buhr, 2010; Jonsson, Greve, &
Fujiwara-Greve, 2009).
The ability of the media to influence the social status of individual organizations (i.e.,
reputation) is in this context intimately related to the proliferation of media products such as
rankings, certifications, and accreditations (Fombrun, 1998; Power, et al., 2009). These are
often mentioned as major drivers of the way organizations are perceived, evaluated, and acted
upon (Deephouse, 2000; Fombrun, 1998; Pollock & Rindova, 2003). Rhee and Valdez
(2009), in discussing how organizational age and diversity of market segmentation influence
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stakeholders’ perception of an organization, included media-based quality ratings, winning
awards, and certifications as contributing both to reputational damage and to organizational
ability to retain a positive stand.
As discussed earlier in the chapter, ranking and accreditations work differently in
their ability to discriminate between organizations sharing join social contexts (ranking) and
the extent to which organizations are perceived as following normative prescriptions and
constraints (accreditations). Through the publishing of ranking lists, awards, and
accreditations, the media’s involvement in reputation building is connected to their function
to 1) affiliate organizations with prominent/deviant field members; and 2) spread and
proliferate moral and professional norms, values, and expectations (Carey, 1992; Jonsson &
Buhr, 2010; Jonsson, et al., 2009; Rao, Davis, & Ward, 2000; Wry, Deephouse, &
McNamara, 2006).
The later form of media involvement in reputation building—the creation, translation,
and distribution of models, ideas, and other normative thoughts about what an organization is,
should be, or wants to be—is also a part of the identity formation of individual organizations
as well as the contexts (e.g., organizational fields) that the organizations are a part of (SahlinAndersson & Engwall, 2002). Media-framed identity formation and its evaluation and
categorization is a central part of reputational status because it addresses the increasing need
of organizations to clarify and communicate who they are, what they stand for, and what
moral standards they are built upon (Chun, 2005; Schultz, Hatch, & Holten Larsen, 2000).
The way in which organizations can access and influence media and their coverage
has far-reaching consequences not only for their immediate market and financial
performance, but also for their long-term ability to build institutional foundations—such as
reputation and legitimacy—for their survival (Motion & Weaver, 2005; Pallas & Fredriksson,
2010). Meijer and Kleinnijenhuis (2006) showed in the context of business news how the
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second-level effect of agenda-setting influences the reputation of organizations. They not
only confirmed earlier findings concerning the way news about a certain issue stimulated the
salience of that issue, they also introduced an ownership perspective, suggesting that if
organizations are perceived as not controlling the issue, they may also suffer of reputation
losses (see also Eisenegger & Imhof, 2008; Schultzet al., 2001).
NGOs, consultants, and other social actors
Ranking the reputation of organizations has also been taken up by NGOs and business
consultancies and contributes to the plethora of ranking systems. The notion of transparency
as a business imperative around social and environmental activities has evolved from the
central neo-liberal market principle that open information facilitates efficient markets
(Nadesan, 2011). While governments have not regulated this sector as they have financial
markets, they have supported the role of NGOs in providing checking and monitoring
systems for business activity that might contribute to reputation (Nadesan, 2011).
Rindova, Williamson, Petkova, & Sever (2005) conceptualized reputation as
including two elements: economic and marketing attributes that illustrate organization’s
ability to generate desirable products and services and thereby economic profit, and
institutional recognition that places organizations in a context of larger societal settings such
as organizational fields (see also Wedlin, 2006). Even though the latter has been found to be
more decisive in terms of the effect on organizational reputation (Rindova, et al., 2005),
contemporary research suggests that both of these components are necessary to understand
the accumulative/historical and relative evaluation of organizational performance (Jonsson &
Buhr, 2010; Rindova, Pollock, & Hayward, 2006) .
Ranking is also a commercial arena where different actors compete with each other to
establish their own criteria for inclusion and exclusion. It is notable, for instance, that ranking
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indices are managed by private consulting firms. One example is the Dow Jones
Sustainability Indices, where the Swiss consulting firm SAM plays a constitutive role in
assessing the sustainability performance of companies from all industries. Following a bestin-class approach, companies are evaluated against a number of long-term economic, social,
and environmental criteria. Indices may also be values-based (only including companies
living up to certain values) or compiled according to other criteria. Often, commercial actors
like KLD combine these indexing and rating services with the screening of companies
according to social or environmental investment criteria with other traditional consulting
services. It is evident that corporate ranking and reputation has created a commercial industry
marked by active product and service innovation. For companies and other ranked or rated
institutions, the downside of this is not only the risk of reputational loss but also the burden of
information placed on them by the actors in the field. Non-synchronized forms and
questionnaires from a variety of competing actors must be filled out, and this task becomes in
itself a full-time duty for employees, for example at the communications or CSR departments
(cf. Dubbink, Graafland, & van Liedekerke, 2008).
One should also bear in mind that media rankings are often carried out with the
assistance of commercial actors. One example is the Newsweek 2010 Green Ranking, an
assessment of the largest companies in the U.S. and in the world. These rankings were the
result of teamwork between Newsweek and three commercial research organizations within
the environmental field. This also shows that there is not only a connection between the
media and NGOs when it comes to monitoring companies (Grafström, Göthberg, & Windell,
2008), but also between commercial organizations and the media in terms of ranking and
rating.
One corollary of the expansion of the ranking industry is that intermediaries, such as
consultancies, play a dual role when it comes to ranking and reputation. They are part of the
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ranking industry while at the same time benefitting from the existence of the ranking industry
because they assist commercial actors and others in the quest for improving reputations. And
recently, a new arena for consultants has been created by the rise of social media, where the
ranking and rating industry to some extent becomes privatized.
Academic literature on the relationship between social media and reputation is still
limited, but parallels can be made; social media provides a broadcast form of word of mouth
that has impacts in terms of both dissemination of information in the same way that
traditional mass media have functioned. However, social media has an added dimension of
personal influence in that the information from person to person influences the perceptions of
the subject (Katz & Lazarsfeld, 1964). If we consider reputation as largely based on
perceptions, then social media raises numerous issues about organizations’ ability to attempt
to manage perceptions of the organization. It also allows a range of social actors to influence
large numbers of people about organizations and organizational attributes.
Scholarly tensions and future research
While reputation has been a central concern for practitioners, there has been relatively
little attention paid to accreditation and ranking in the communication literature. As noted
earlier, much of the literature around reputation arises from an applied area of corporate
communication that encompasses public relations, integrated marketing communication, and
employee communication. There is also an arm of marketing literature devoted to image,
identity and branding, and reputation that is significant. Media and reputation work is
arguably the most theoretically sophisticated. The concept of the reputation ranking process,
however, is inherent within all these discussions, as previously mentioned, in terms of their
role in capturing future expectations (Deephouse & Suchman, 2008) and relativity
(Deephouse & Carter, 2005).
Accreditation and rankings
21
Much of the existing work has considered the role of reputation—which is inherently
work on rankings—as an antecedent or consequence of various organizational performance
factors. For example, the relationship between financial performance and reputation has been
noted. These are not overtly the domain of communication scholars. The role of
communication has centered more on the communication or dissemination of reputation
attributes, accreditations, and rankings to influence perception of an organization. Van Riel
(1995), for example, suggested that this is one of the most important contributors to
reputation for an organization. This process, however, can be understood at multiple levels.
The first is from the organization’s perspective, focusing on their strategic approach to
communicating the distinctive attributes of their business while also managing the legitimacy
of their business or alignment with existing rules. The second focuses on the role of the
channels of this communication. The third focuses on the perception formation of the
communicated attributes and on reputation.
Strategic communication, reputation, rankings, and accreditation
The role of communication in seeking to strategically manage reputation is prominent
in the literature, which leads us to consider the structure-agency debate. At present, the
applied communication perspective of communication and reputation reflects a largely
instrumental approach to reputation which emphasizes the agentic approach. However, the
implications at a macro level is that multiple organizations engaging in the reputation ranking
competition creates effects in its own right. At one level, the largely instrumental approach
institutionalizes the emphasis on organizational performance on non-financial measures,
which aligns with the corporate social responsibility movement and the triple bottom line
imperative for organizations. It also is related to governance and transparency movements
where, again, a range of organizational matters are of importance for executives.
Accreditation and rankings
22
Channel
The internal-external dimension of employees’ impacting how their firm is perceived
also opens up a host of research opportunities for examining the role of employees as
channels of communication related to reputation. Hatch and Schultz (1997; 2002) have
discussed the intertwining of the internal and external aspects of how organizations seek to
construct what is distinctive about them, and also the role of employees in interpreting and
enacting those desired images. There is also a literature on “dirty work” (Ashforth & Kreiner,
1999, p.?) and the role of employees in managing their own and the organization’s reputation
when that reputation is very poor. This highlights the paradox of organizations that can
continue to operate and be considered legitimate, while at the same time having a poor
reputation.
This requires us to consider the implications of rating and accreditations in the
perception formation process. Accreditations and ratings are evaluated and awarded by
specific social actors (e.g., formal accreditation bodies, the media, NGOs). The question is
how the achievement of accreditation and ranking is communicated to others, how
perceptions are formed, and what the implications are for other relationships and dimensions
of the organization- stakeholder relationship. There is an assumption that a good ranking
leads to greater access to resources. This further suggests that the perceptions of some
stakeholders are more important than others, particularly in relation to their ability to provide
access to resources. Therefore, the instrumental suggestion that good employee
communication is important for reputation requires far deeper exploration and understanding.
This might relate to how knowledge of accreditation and ranking may boost the identification
between employee and organization and, in turn, higher levels of service provision, third
party endorsement, and problem solving.
Accreditation and rankings
23
The existing consideration of the role of employees in the third party endorsement
process also requires extension as the boundaries of organizations continue to expand. As
noted earlier, to date there has been limited empirical research on the role of social media in
relation to reputation, and while there is considerable interest in the topic, this work remains
in its nascent stages. However, social media open up organizational boundaries in two ways.
First, social media give stakeholders who are perceived to have credible knowledge about an
organization a platform from which their views may be constructed, accessed, and
disseminated. This is particularly so in an environment characterized by increased distrust
and lack of confidence in organizational operations (Frostenson et al., 2010). Second, the
potential reach in disseminating information about the organization through social media is
global.
Role of evaluating organizations
Constructing the guidelines for accreditation and ranking organizations opens up
important questions about communication—not for the focal organizations who are the
subject of reputation rankings, but for those organizations creating and employing the
guidelines. These groups often include NGOs, media, and social movement groups (Engwall
et al., forthcoming). The management literature has paid little attention to these groups,
particularly in relation to legitimacy (Deephouse & Carter, 2005). The role of these groups in
the broader process of constructing the norms underpinning accreditation and ranking also
opens up theoretical research opportunities. The social constructionist perspective, for
example, can be useful in this task. Because societies, legitimacy, and evaluation standards
are constantly evolving (Meyer & Rowan, 1977), the role of communication in the processes
through which this takes place offers important opportunities for further research. One
perspective is on the role of communication as organization (Taylor & van Every, 2000;
Cooren, 1999) so that communication constitutes the organization and the meaning of its
Accreditation and rankings
24
attributes. Lammers and Barbour (2006) also suggested that the insights on the social
construction of reality (Berger & Luckmann, 1966) from institutional theory (Meyer &
Rowan, 1977) can also add macro level perspectives to understanding communication
phenomena. These perspectives allow communication and management studies to inform
each other in relation to how communication studies allow us to understand the ways that
social norms develop and how accreditation and ranking systems evolve. Doing this allows a
shift in the exploration of reputation away from the instrumental perspective, which is largely
at the level of the organization and management of perceptions, to a broader perspective from
which legitimacy and reputation as social norms and organizational differentiation can be
studied.
Conclusion
In this chapter, we have examined the role of accreditation and rankings in relation to
studies of corporate reputation. Given that reputation is a matter of relative standing between
organizations, accreditation and ranking provide ways to examine the inclusion and exclusion
of organizations, as well as the order of standing among competitors. We noted that both the
management and communication literatures have been involved in research on these topics,
and both provide insights into the reputation process. The two literatures also suggest a host
of interesting and important future studies that offer greater understanding of the dynamics of
reputation ranging from the micro, across the meso, and up to the macro level of analysis.
Given the emphasis in industry on the importance of reputation, and the claims by the public
relations industry, in particular in regards to reputation management, there are significant
opportunities for the academic research to further inform this area of organizational life.
Accreditation and rankings
25
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BIOGRAPHIES
Jennifer Bartlett (Ph.D., Queensland University of Technology, 2007) is senior lecturer in the
School of Advertising, Marketing, and Public Relations at the School of Business at
Queensland University of Technology, Australia. Her research has been published in the
Public Relations Review, the Asia Pacific Journal of Public Relations,the Journal of
Communication Management, and the Australian Journal of Communication. She serves on
the editorial boards of Prism: The Online Public Relations Journal in Australia and New
Zealand. Bartlett is the previous Secretary and incoming Vice-Chair of the International
Communication Association’s Public Relations division. She is also a Fellow of the Public
Relations Institute of Australia (PRIA).
Josef Pallas
Josef Pallas (Ph.D.) is lecturer and researcher in the Department of Business Studies and the
Department of Informatics and Media at Uppsala University. His research focuses mainly on
the increased mediatization of the Western economy and the implications this has for the way
modern organizations are governed. He is co-author and co-editor of number of books/book
chapters as well as of journal articles and reports dealing with the topics of mediatization,
corporate communications, and corporate governance.
Magnus Frostenson