Symbolic or Behavioral Management? Corporate Reputation in High-Emission Industries

In this paper, we identify two important approaches to corporation reputation building: symbolic management and behavioral management. Within the first approach, corporate communications are intended to generate positive impressions among ‘media audiences’. Within the second approach, corporate actions are changed to more closely align with the message being conveyed by corporation communications. Many corporate managers assume that the symbolic alignment between what is wanted by media audiences and what is said enhances corporate reputation and this, in turn, improves corporate profitability. In this paper, we tested the relative efficacy of the symbolic and behavioral management approaches to corporate reputation and profitability. We found that symbolic management had a positive effect on symbolic reputation, whereas behavioral management had a positive effect on performance reputation. We also found that a positive reputation in the media did not contribute to corporate profitability, whereas a positive performance reputation had a significant effect on profitability. We conclude that the behavioral management approach is more effective for reputation building and for contributing to profitability. We also discuss implications of our findings for reputation management and corporate performance.