Abstract:

A high level of corporate reputation is usually viewed as an intangible asset of the firm, which results in considerable competitive advantages. However, the existing research has also revealed that, possessing a high reputation can burden firms and individuals both under normal operation and crisis situations. The negative effects of a high reputation originate from its micro-foundations, which are the stakeholders’ cognitions and emotions. Under normal operation situation, a high reputation has negative influences on firms via cognitive mechanisms and on employees via emotional mechanisms; while in crisis situation, it impacts firms through cognitive mechanisms. In addition, the negative effects of a high reputation have multi-level moderators, including individual-, firm-, and market-level factors. Moreover, the correspondingly boundary conditions under the normal and crisis situations are different. Future research can focus on the multi-dimensionality of corporate reputation and delve into the unique mechanisms and the boundary conditions of different dimensions of a high reputation in terms of negative effects, while exploring the interactions between multiple dimensions. Researchers can also further study the negative influences on employees, expand upon the dynamic evolution of the negative effects of a high reputation, and consider a meta-analysis.

Key words: corporate reputation, negative effects, micro-foundations, underlying mechanisms