The Path Dependence of Organizational Reputation: How Social Judgment Influences Assessments of Capability and Character
Strategic Management Journal, Vol. 33, No. 5, pp. 459-477
Posted: 15 Feb 2011 Last revised: 7 Mar 2012
Date Written: February 14, 2011
Abstract
Drawing upon theory on social judgments and impression formation from social psychology, this paper explores the socio-cognitive processes that shape the formation of favorable and unfavorable organizational reputations. Specifically, we suggest that stakeholders make distinctions between an organization’s capabilities and its character. We explain the nature and function of each and articulate the manner in which judgment heuristics and biases manifest in the development of capability and character reputations. In doing so, this research explores both the positive and negative sides of organizational reputation by examining the manner in which different types of reputations are built or damaged, and how these processes influence the ability of managers to enhance and protect these reputations.
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