Jan.

18, 2011 14:50 9in x 6in Corporate Social Responsibility, Governance… b1081-intro

Introduction

Corporate reputation is a global and general, temporally stable,

evaluative judgment about a corporation that is shared by multi-
ple stakeholders (Highhouse et al., 2009). It is a long-term intangible
corporate asset or liability that is important for organizational com-
petitiveness (Friedman, 2009). It is a perceptual representation of a
company’s past actions and future prospects that describe the com-
pany’s overall appeal to all its key constituents when compared to
its rivals. Corporate reputation represents what is actually known
by both internal and external stakeholders (Walker, 2010). Corporate
reputation is the collective judgment of a corporation (Einwiller et al.,
2010). Reputation is a combination of reality such as economic and
social performance and perception such as performance perceived
by key stakeholders (Hemphill, 2006).
Corporate reputation is an important asset or liability bestowed
upon a corporation by its stakeholders (Love and Kraatz, 2009). For
example, if the stakeholders perceive a corporation to be corrupt or
involved in other forms of white-collar crime, then corporate repu-
tation is likely to be a liability rather than an asset. Awareness of the
link between corporate reputation and white-collar crime has risen
substantially in the business world after the joint collapse of Enron
and Arthur Andersen. As a consequence, companies have become
more sensitive to the value of their reputation. Corporate audiences,
including institutional and individual investors, customers and sup-
pliers, public authorities and competitors, evaluate the reputation

1
CORPORATE SOCIAL RESPONSIBILITY, GOVERNANCE AND CORPORATE REPUTATION
© World Scientific Publishing Co. Pte. Ltd.
http://www.worldscibooks.com/business/8024.html

Electronic copy available at: http://ssrn.com/abstract=1884761

 Jan. 18, 2011 14:50 9in x 6in Corporate Social Responsibility, Governance… b1081-intro

2 Corporate Social Responsibility, Governance & Reputation

of firms when making choices and other decisions (Linthicum et al.,

2010).
Classical examples of white-collar crime include business orga-
nizations such as Enron, Arthur Andersen, Siemens, WorldCom, and
Royal Bank of Scotland. These examples are known throughout the
world. But just as many, or even more examples are known locally in
different countries. For example, in the five-million people country
of Norway, a number of white-collar scandals have emerged in the
last decade, such as Sponsor Service, PEAB and Finance Credit.
White-collar crime is financial crime with certain characteris-
tics. It is a broad concept that covers illegal behavior that takes
advantage of positions of professional authority and power (Kempa,
2010). White-collar crime can both benefit and harm business enter-
prises by being either an offender or a victim of crime. White-collar
crime occurs in all kinds of organizations (Ventura and Daniel, 2010).
Links between white-collar crime and corporate reputation are
explored in this book. Damage to corporate reputation caused by
white-collar crime is discussed, and different approaches to repu-
tation repair are presented. Other relevant topics such as internal
investigations, corporate compliance, corporate governance, foren-
sic accounting and detection of suspicious transactions are dis-
cussed. The book concludes by emphasizing the need for knowledge
management to combat white-collar crime and to build corporate
reputation.

CORPORATE SOCIAL RESPONSIBILITY, GOVERNANCE AND CORPORATE REPUTATION

© World Scientific Publishing Co. Pte. Ltd.
http://www.worldscibooks.com/business/8024.html

Electronic copy available at: http://ssrn.com/abstract=1884761