Q&A: The Science Behind RepTrak®

Now, more than ever, companies are recognizing the need to measure their reputations. Hits to a company’s reputation can be devastating, whether it’s the Apple Foxconn scandal or the recent data breach involving security contractor USIS and the hacking of the security clearance information of 4.2 million U.S. government employees. What better time than now to talk about the usefulness and statistical validity of RepTrak®? Companies need a reputation measurement system they can count on. It needs to be simple to administer, broadly adopted and keenly accurate in its assessment. This is RepTrak® and the largest global database of reputation scores that it sits upon.

Join me now in this discussion about the RepTrak® Pulse with Ángel Alloza Losana, who recently completed his dissertation cum laude at the Universitat Jaume I of Castellón on this very topic. Ángel is also the director of the think tank Corporate Excellence – Centre for Reputation Leadership. That’s to say, he always has reputation on his mind!

Jamie Bedard: How did you decide on reputation as the topic of your dissertation?
Ángel Alloza Losana: I began this research to help validate a reputation measure that was thorough from an academic standpoint and easy enough for a company to deploy quickly. I sought an indicator that would work alongside the traditional financial and accounting indicators that are used to define the strategy and evaluate the degree of compliance in any organization. One of the problems with current reputation metrics is the lack of a global indicator to represent the general reputation of a company, institution, city, country, etc. Until now, we have had a reputation metric for every segment of the population.

In my dissertation, I demonstrate that organizations could benefit from a common global reputation indicator for the general public, regardless of (1) the gender, age, and educational level of the people evaluating an organization; (2) the cultural differences (people from different countries) and (3) the field of activity of the company that is being evaluated in terms of reputation.

Jamie Bedard: How did you go about proving in your dissertation the usefulness and statistical validity of the RepTrak® Pulse to measure global reputation?
Ángel Alloza Losana: The mathematic and statistical data used in my research follow statistical approaches widely accepted in academia to confirm the reliability and validity of measures. (For those academics out there, the analyses included an exploratory factor analysis, a confirmatory factor analysis, and a multi-group analysis). The results of the mathematical tests lead to the conclusion that the RepTrak® Pulse really does express and encapsulate the global reputation of a company. The RepTrak® Pulse is valid and trustworthy. It considers a single emotional bond that is associated with the positive or negative behaviours of stakeholders.

Jamie Bedard: Why is this an important finding for academic communities and companies?
Ángel Alloza Losana: The findings of my dissertation confirm that the RepTrak® “Pulse measures the global reputation of a company or organization regardless of the gender, age or social class of the respondents” (population invariance). The verification of the hypothesis of population invariance is essential in this research. Not having verified the hypothesis would mean that we would be measuring different feelings and perceptions for every stakeholder and we wouldn’t be able to identify if reputation management is changing the attitudes of stakeholders.

The result of having verified the hypothesis defended in this research is that the RepTrak® Pulse allows companies to measure their global reputation and its evolution over time, to compare it with other companies and between different population segments, stakeholders, activity areas and countries. The findings from my dissertation support that companies should include the RepTrak® Pulse in high-level scorecards together with other key indicators, both financial and non-financial. The RepTrak® Pulse, along with the traditional financial indicators, can help companies establish a long-term strategy and develop a multi-stakeholder approach that will lead them to excellence, integrity and sustainability.

In August, Reputation Institute is launching a global initiative to launch national and industry-specific reputation tracking programs leveraging the Extended RepTrak® model of reputation measurement. In these trackers, companies will be able to benchmark their company reputation against the top companies as well as against targeted competitors. Companies will also be able to look at stakeholder touch points, demographic analysis and key stakeholder behaviours. National reputation trackers will launch in the United States, the United Kingdom, Spain, Denmark, the Netherlands and Mexico. Industry-specific reputation trackers are also underway in the banking, financial services, pharmaceuticals and consumer goods sectors.

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