Assessing a financial value for a corporate entity's reputation; a proposed formula

Bowd, Ryan and Bowd, Les (2006) Assessing a financial value for a corporate entity's reputation; a proposed formula. UNSPECIFIED. Manchester Metropolitan University. ISSN 1471-8209

Preview

Available under License In Copyright. Download (116kB) | Preview

Abstract

Public Relations like many service related, consultative, management professions is continually being called upon to quantify its value, the value of its activities and the value of investing in those intangible assets that it advocates add value to organizations, assets such as brands, reputation and organizational identity. This paper is an attempt to provide a new and vital examination for public relations both as a profession and an area of academic study. First the document examines whether both the academic and public relations communities view reputation as making up part of a corporate entity's financial value? It accomplishes this through a review of the literature and qualitative interview process. The foundation research also examines what exactly is corporate reputation, what kind of values reputation can have, are these values recognised, how is reputation currently valued, and in any future valuation what attributes of reputation, financial elements and parameters would a measurement formula need to account for. This examination found that reputation does make up part of a corporate entity's financial value. Based on this finding the study develops a proposed formula for accounting for reputation. The formula is then tested using quantitative data collected during the research process. The formula is found to be effective and would be applicable for use in annual reports or as a snapshot monitoring of reputation. With acceptance of the financial, accounting and public relations communities this formula could provide an exciting launch pad for proving the value of reputation management to corporate entities and their CEOs and CFOs.