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

The reputation literature tends to approach the relationship between firms’ reputation and performance as a direct causal relationship. To improve our understanding of corporate reputation it is necessary to re-conceptualise reputation as having an indirect influence. Reputation acts as a source of resilience providing 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, this research analysed the content of 10,582 Australian firms’ annual reports over 17 years to identify what executives communicate to their stakeholders. These results were then subjected to analyses which identified that firms with superior financial and service reputation tended to outperform firms without such standing.