How did Johnson & Johnson respond in a way that protected its reputation?

Recalled all products and communicated openly

What most damaged Wells Fargo’s public trust during the 2016 scandal?

Blaming junior staff instead of taking responsibility

What do studies show about corporate reputation’s effect on the cost of equity?

Higher reputation lowers cost of equity, even after controls

How can the Reputation QuotientSM (RQ) impact a company’s operational activities?

Enables stakeholder strategy that boosts efficiency, engagement & loyalty

What does the VW case show about the strategic value of corporate reputation?

Severe reputational loss can pressure deep strategic transformation

Why did the CEO’s “I want my life back” comment hurt BP’s reputation?

It showed a lack of empathy and moral responsibility

Why are innovations from reputable companies more likely to succeed?

People assume quality and trust the company’s intent

Which of the following best distinguishes brand from reputation?

Brand is internal; reputation is shaped by public experiences

Why does a CEO’s personal reputation influence how people view the entire company?

It signals strong leadership and boosts trust in the company

What moderates the negative impact of downsizing on a firm's corporate reputation?

Firms with strong prior reputation suffer less damage

How does a strong corporate reputation help in times of crisis?

Encourages stakeholder support despite difficulties

What does Patagonia’s success show about reputation and business value?

Clear values and action build loyalty and performance

What best defines the concept of reputation capital in the context of corporate reputation? (IP=intellectual property)

Intangible value from stakeholder trust and goodwill used for advantage

Why is reputation a sustainable competitive advantage in crowded markets?

It builds slowly and is hard to imitate

Why did United's CEO's first response worsen the backlash after a passenger was forcibly removed in 2017?

Pseudo-apology lacked empathy, deflected blame, hurt stakeholder trust

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Reputation Management Topic 1 and 9 - Melis Gurdag and Jacqueline Viktoria Hulin

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Questions 15

Answers

1
How did Johnson & Johnson respond in a way that protected its reputation?
Relaunched Tylenol under a different brand
Limited news coverage through legal channels
Kept selling while pursuing legal action
Recalled all products and communicated openly
2
What most damaged Wells Fargo’s public trust during the 2016 scandal?
Blaming junior staff instead of taking responsibility
Over 10 million fake customer accounts were created
Donations to promote financial literacy
The drop in stock price following the scandal
3
What do studies show about corporate reputation’s effect on the cost of equity?
No effect after controlling size and performance
Reputation lowers cost of equity only for firms not on Most Admired List
Higher reputation lowers cost of equity, even after controls
Higher reputation improves earnings quality but not cost of equity
4
How can the Reputation QuotientSM (RQ) impact a company’s operational activities?
Enables stakeholder strategy that boosts efficiency, engagement & loyalty
Predicts stock movements by tracking brand sentiment in markets
Replaces financial KPIs with consumer sentiment data
Boosts short-term brand visibility through media ranking coverage
5
What does the VW case show about the strategic value of corporate reputation?
Severe reputational loss can pressure deep strategic transformation
Reputation is mainly a marketing concern, not a business issue
Damage mostly affects short-term ops but not long-term strategy
Innovation alone can fix reputation, no need to change strategy
6
Why did the CEO’s “I want my life back” comment hurt BP’s reputation?
It unfairly blamed external contractors
It showed a lack of empathy and moral responsibility
It ignored the environmental damage
It downplayed financial losses from the spill
7
Why are innovations from reputable companies more likely to succeed?
Firms avoid risks to protect their image
People assume quality and trust the company’s intent
Reputation guarantees all R&D efforts
Consumers become more price-sensitive
8
Which of the following best distinguishes brand from reputation?
Reputation is entirely controlled through branding
Brand is internal; reputation is shaped by public experiences
Brand depends on profits and sales
Reputation is about logos; brand is about public trust
9
Why does a CEO’s personal reputation influence how people view the entire company?
The public usually ignores executives and focuses on products
Respected CEOs are immune to public criticism
It signals strong leadership and boosts trust in the company
CEOs can directly control what investors think through press releases
10
What moderates the negative impact of downsizing on a firm's corporate reputation?
Firm age, where older firms never lose reputation from downsizing
Firms with strong prior reputation suffer less damage
Firm size: Larger firms always face less reputation damage
Any layoff over 1% causes equal damage regardless of firm.
11
How does a strong corporate reputation help in times of crisis?
Removes need for media communication
Only benefits small or nonprofit organizations
Prevents legal and financial penalties
Encourages stakeholder support despite difficulties
12
What does Patagonia’s success show about reputation and business value?
Clear values and action build loyalty and performance
Green efforts hurt short-term sales
Activism works only for small brands
Neutral messaging is always safest
13
What best defines the concept of reputation capital in the context of corporate reputation? (IP=intellectual property)
Total brand equity measured by customer loyalty and recognition
The tangible financial assets a company owns that enhance its market value.
Sum of patents & IP protecting a company’s innovation capacity
Intangible value from stakeholder trust and goodwill used for advantage
14
Why is reputation a sustainable competitive advantage in crowded markets?
Competitors can easily ruin it with bad PR
It builds slowly and is hard to imitate
It removes the need for innovation
It can be created quickly through advertising
15
Why did United's CEO's first response worsen the backlash after a passenger was forcibly removed in 2017?
Pseudo-apology lacked empathy, deflected blame, hurt stakeholder trust
Support for staff showed value-led leadership, reassured inter. stakeholder
Late apology seemed evasive in fast-moving social media context.
Focus on legal tone over emotion worsened public perception

Reputation Management Topic 1 and 9 - Melis Gurdag and Jacqueline Viktoria Hulin Flashcards | StudBud