Practitioner Perceptions of Corporate Reputation An Empirical Investigation

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Introduction

Reputation management
section Few developments in the fields of corporate
and marketing communications have been the
Practitioner perceptions subject of greater academic interest, scrutiny
and analysis than the implementation of
of corporate reputation: techniques and procedures for managing the
an empirical reputations of companies; as opposed to
corporate image, corporate identity and general
investigation public relations work (see for example
Fombrun and Shanley, 1990; Fombrun, 1996;
Roger Bennett and Fombrun and Van Riel, 1997; Whetten, 1997;
Rita Kottasz Cooper, 1999 for details of relevant literature).
One cause of this upsurge of interest in
corporate reputation has been the conspicuous
successes achieved by a number of high-profile
The authors crisis management programmes (see Barton,
1993; Argenti, 1997), in conjunction with
Roger Bennett and Rita Kottasz are based at London
firms' increasing desires to insure their
Guildhall University, London, UK.
corporate images against adverse publicity
potentially arising from future disasters.
Keywords According to Poe (1998, p. 16), moreover, the
Coporate image, Public relations ``age of nonstop mergers, corporate takeovers
and raging employee distrust'' has led to the
Abstract reputations of businesses and their leaders
routinely ``being shot down by the press, stock
Owner-managers or managing directors of 106 UK public
market analysts and other professional firing
relations consultancies completed a questionnaire
squads'' across all industry sectors. Thus,
concerning the extent of their firms' client reputation
prudent companies will proactively seek to
management activities and their attitudes and opinions
obviate the detrimental impact of possible bad
about reputational work. The results suggested
widespread interest in the concept and practice of
publicity in the future, and the creation of a
reputation management as an area of activity separate
sound reputation is one means for achieving
and distinct from other aspects of PR. However,
this aim. Another reason for the rise of
respondents expressed concerns about the existence of
reputation management has of course been the
barriers to the implementation of reputation management growing realisation that the possession of an
programmes within client companies. The executives excellent reputation can significantly enhance
most likely to agree with the ``academic'' definition of financial performance. Cooper (1999), for
corporate reputation were those whose consultancies instance, suggests that between 8 per cent and
offered a large number of reputation management 15 per cent of a company's share price may be
services; who believed that the demand for these services ascribed to corporate reputation. This might be
was about to rise; and who clearly distinguished between due to the ability of a high-reputation firm to
reputational and general PR activities. Only a small attract customers, investors, and excellent
percentage of the sample disagreed with the proposition employees; to motivate its suppliers; and to
that most innovations in the field of reputation incur less hostility from regulatory bodies
management were attributable to practitioners rather (Fombrun and Shanley, 1990; McMillan and
than academics. Joshi, 1997).
This paper presents the results of an
empirical study of the extent to which
Electronic access
reputation management has been taken up as
The current issue and full text archive of this journal is a separate and substantial aspect of PR among
available at a sample of UK public relations
http://www.emerald-library.com consultancies. Hence it offers an insight into
current practice vis-aÁ-vis reputation
management at the ``grass roots'' level, i.e.
Corporate Communications: An International Journal
Volume 5 . Number 4 . 2000 . pp. 224±234 among PR practitioners operationally
# MCB University Press . ISSN 1356-3289 responsible for assisting client firms to
224
Practitioner perceptions of corporate reputation Corporate Communications: An International Journal
Roger Bennett and Rita Kottasz Volume 5 . Number 4 . 2000 . 224±234

manage their corporate communications. As been the case. Other interesting issues are
well as contributing to knowledge about PR whether practitioners see reputation
consultancies' views and activities in this management as nothing more than a
rapidly expanding area, the research has a ``management fad'' with a strictly limited
more general significance considering the lifespan, or a notion not essentially different
enhanced role of PR recently observed at both from that of ``corporate image''.
the marketing and corporate communications
levels (Kitchen, 1996), and the likelihood,
according to Pinkleton and Austin (1999), Reputation management in theory and
that fast changing commercial environments practice
are actively forcing PR firms to re-examine
fundamentally their facilities and services in Balmer's (1998) review of the evolution of the
order to demonstrate improved effectiveness. theory of corporate reputation identified three
Pinkleton and Austin (1999, p. 85) argue that stages of development. The first phase (in the
nowadays PR consultants whose past 1950s) focused on corporate image, giving
successes were based on practical way in the 1970s and 1980s to an emphasis
understanding of local media, excellent on corporate identity and corporate
contacts and powerful media skills communications, and then in the 1990s to a
increasingly ``find themselves struggling to mounting interest in corporate brand
maintain client confidence in an era of greater management and thence reputation.
programme accountability and fewer financial According to Balmer (1998, p. 971), image
resources''. differs from reputation in that whereas the
The research also examined whether the PR former concerns the public's ``latest beliefs''
executives participating in the study generally about an organisation, reputation represents a
agreed or disagreed with the academic view of value judgement about the organisation's
what ``corporate reputation'' involves. Note qualities ``built up over a period and focusing
that UK (as opposed to US) approaches to on what it does and how it behaves''. Thus,
PR have traditionally regarded the terms reputation has an historical dimension as it
``public relations'' and ``reputation'' as represents ``the estimation of the consistency
synonymous. The UK Institute of Public over time of an attribute of an entity based on
Relations, for example, defines PR as ``about its willingness and ability to perform an
reputation'', and PR practice as ``the activity repeatedly in a similar fashion''
discipline which looks after reputation'' (Herbig and Milewicz, 1995, p. 24). These
(Institute of Public Relations, 1999, p. 1). assessments of past actions may derive from
Equally, however, the volume of academic personal experience; yet equally could result
literature dedicated to reputation from word-of-mouth information, a firm's
management as a distinct and relatively self- media profile, or the company's general
contained field of study has expanded public relations. Fombrun and Van Riel
enormously in recent years (see Fombrun and (1997, p. 10) similarly emphasise the
Van Riel, 1997; Balmer, 1998); numerous historical nature of reputation which, they
books have appeared about corporate suggest, is a ``subjective, collective assessment
reputation, and academic and other of an organisation's trustworthiness and
conferences committed to reputational reliability'' based on past performance.
matters have proliferated. To what extent Because reputations evolve over time they
have contemporary academic interpretations cannot be fashioned as quickly as images.
of and approaches towards reputation Moreover, an organisation might have a good
management spread among senior PR reputation (e.g. for providing excellent
practitioners? This is a question worthy of products) yet possess a low-impact, old-
investigation because, to the degree that fashioned or otherwise inappropriate image.
differences of opinion concerning the The reverse could also be true: a strong image
meaning of corporate reputation occur crafted via a powerful organisational identity
between the academic and practitioner programme, advertising, public relations and
domains then far greater attention may need integrated marketing communications might
to be given to the dissemination of the not be matched by a cogent reputation.
findings of academic research about ``Images'' themselves involve the knowledge,
reputation management than previously has feelings and beliefs about an organisation that
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Practitioner perceptions of corporate reputation Corporate Communications: An International Journal
Roger Bennett and Rita Kottasz Volume 5 . Number 4 . 2000 . 224±234

exist in the thoughts of its audiences (see such as image/reputation management. The
Hatch and Schultz, 1997), i.e. ``what comes authors attributed these difficulties in part to
to mind when one hears the name or sees the client firms demanding ``familiar and
logo'' (Gray and Balmer, 1998, p. 696). This compartmentalised services'' (Schultz and
is not the same as corporate ``identity'', which Ervolder's, 1998 p. 39) and to their not being
relates to the ``self presentation'' of an able to grasp the natures of the relationships
organisation and thus consists of the cues that between image-related constructs.
it offers via its symbols, communications and
other signals (Van Riel, 1995). Rather, image
represents a mental interpretation of an entity The study
based on these symbols.
A substantial amount of academic research An exploratory investigation was deemed
has been completed into how organisations appropriate consequent to the paucity of prior
manage their reputations (see, for example, research in the area. Exploratory studies are
Post and Griffin (1997) and Davies and Miles suitable for ``probing new substantive areas
(1998) for details of recent literature). which may rest on still unformalised and
Investigations have focused both on corporate unintegrated theoretical, hypothetical and
policies relating to reputation management methodological arguments'' (Mills, 1959,
(e.g. Schrum and Wuthnow, 1988; Fombrun p. 32), and where relatively little is known
and Shanley, 1990; Davies and Miles, 1998; about an issue (Churchill, 1991, p. 70).
Gray and Balmer, 1998) and on the Accordingly, the aim of the study was to
marketing communications themes and establish frameworks for future analysis rather
channels employed by organisations engaged than to specify and test particular hypotheses
in reputation management (e.g. Wilson, per se. Information was collected via a mail
1985; Herbig and Milewicz, 1995; McMillan questionnaire (reproduced in the Appendix)
and Joshi, 1997; Fombrun and Rindova, comprising four sections. The first part
1998). In contrast, research into how queried the nature of the reputation
reputational issues are seen by the PR management services offered by the
consultancies and agencies which service the respondent consultancy. Firms which
corporate sector has been sparse: a disturbing undertook dedicated reputational work were
fact as the PR industry itself recognises that then asked to indicate the extents of their
``there is a consensus among consultants that involvement (sections 2.1 and 2.). This was
corporate reputation management will be followed by a listing of the eight items
even more important just over ten years from incorporated into the Fortune reputation
now'' (Gray, 1999, p. 6). Moreover, the index and a request to specify whether the
limited amount of research that has been consultancy provided reputation building or
undertaken has tended to focus on barriers measurement services in relation to any or all
and problems inhibiting the adoption of of these headings. The Fortune index is by far
reputation management within client firms. the most commonly used and debated
Implementation difficulties allegedly include measure of corporate reputation (see
narrow thinking on the part of marketing Fombrun, 1998). It has been criticised for
executives, heavy commitments to resting heavily on matters concerned with a
conventional corporate image programmes in financial orientation (see Caruana, 1996; Van
conjunction with a reluctance to invest in an Riel, 1995, pp. 101-2), yet remains a popular
unexplored field, lack of experience of and measure which has been found to perform
expertise in the techniques of reputation reliably across a variety of disparate industry
management, budgetary constraints, and sectors (see Fombrun and Shanley, 1990;
lengthy timetables for research and strategic Cordeiro, 1999).
planning (Semons, 1998). Schultz and Section 3 of the questionnaire explored
Ervolder's (1998, p. 30) study of 93 Danish respondents' perceptions of the levels of client
marketing consultancies (including PR demand for reputation management services
agencies) noted the difficulties that the (items 3.1(a) and 3.2(a), (d) and (e)); their
professional suppliers of reputation attitudes towards measurement (3.2(f) and
management services themselves commonly (h)) and implementation problems (3.1(b) to
experience when ``crossing boundaries'' into (f)); and opinions regarding reputation
the provision of fresh ``value-based'' services management generally. The final section
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Roger Bennett and Rita Kottasz Volume 5 . Number 4 . 2000 . 224±234

Table I Definitions of reputation


Definition Source

1 A reputation can be defined as a bundle of attributes and the interrelationships Andersen et al. (1999)
among them, shared among a group of individuals in a socio-cognitive
community
2 Corporate reputation refers to the perception of an organisation which is built Balmer (1998)
up over a period of time and which focuses on what it does and how it behaves
3 Corporate reputation is the evaluation (respect, esteem, estimation) in which an Dowling (1994)
organisation's image is held by people
4 A corporate reputation is a perceptual representation of a company's past Fombrun (1996)
actions and future prospects that describes the firm's appeal to all of its key
constituents when compared with other leading rivals
5 Corporate reputation is a collective representation of a firm's past actions and Fombrun, and
results that describe the firm's ability to deliver valued outcomes to multiple Rindova, (1996)
stakeholders. It gauges a firm's relative standing both internally with
employees and externally with its stakeholders, in both its competitive and
institutional environments
6 Reputation is a representation of the cumulative judgements of a constituency Fombrun and Shanley,
group over time, based upon socially constructed perceptions of an (1990)
organisation's substantive and symbolic actions
7 Corporate reputation indicates a value judgement about a company's attributes Gray and Balmer,
and evolves over time as a result of consistent performance, reinforced by (1998)
effective communication
8 Reputation is the estimation of the consistency over time of an attribute of an Herbig and Milewicz,
entity. This estimation is based on the entity's willingness and ability to (1995)
perform an activity repeatedly in a similar fashion. An attribute is some specific
part of the entity ± price, quality, marketing skills. Reputation is an aggregate
composite of all previous transactions over the life of the entity, a historical
notion, and requires consistency of an entity's actions over a prolonged time
for its formation
9 A company's reputation ± from a buyer's perception ± consists of the extent to Levitt (1965)
which the firm is well known, good or bad, reliable, trustworthy, reputable and
believable
10 Corporate reputation is a synthesis of the opinions, perceptions, and attitudes Post and Griffin (1997)
of an organisation's stakeholders, employees, customers, suppliers, investors,
community members, activists, media, and other stakeholders
11 A firm's corporate reputation is a shorthand evaluation of the stock of information Schweizer and
about that firm in the possession of a particular actor or group of actors that is Wijnberg (1999)
used by those actors to make decisions, involving a certain degree of risk with
regard to the firm, without feeling the need to collect more information
12 Reputations describe the expectations that key stakeholders have about a Sever and Fombrun
company's products, practices and performance (1992)
13 Corporate reputation refers to a corporation's values which are kept alive in a Smythe et al. (1992)
collective memory of its behaviour, with its leaders responsible for keeping the
vision of its founders fresh
14 Corporate reputation is the outcome of a competitive process in which firms Spence (1974)
signal their key characteristics to constituents to maximise social status
15 Corporate reputation is a set of economic and non-economic attributes ascribed Weigelt and Camerer
to a firm, inferred from the firm's past actions (1988)
16 A company's reputation reflects the history of its past actions Yoon et al. (1993).

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Roger Bennett and Rita Kottasz Volume 5 . Number 4 . 2000 . 224±234

presented the executive with an ``academic'' 30 per cent and latest 30 per cent of return
definition of reputation and then asked for mailings, no significant disparities emerging.
assessments of its usefulness (sec. 4(a) to (d)). Firms in the sample had an average of nine
Table I lists 16 definitions of corporate employees.
reputation obtained from a review of
academic literature on the subject and thence
employed to derive the compound statement Results
appearing in section 4. It can be seen from
Table I that, so far as the academic Only 15 per cent of the sample consultancies
community is concerned, reputation has a stated that they did not offer any of the services
cognitive-perceptual dimension (definitions listed in questionnaire section 1.2 (see the
1 to 4, 6, 7, 9 to 11), an historical dimension Appendix). The commonest services reported
(definitions 2, 4 to 8, 13, 15, 16), and by the remaining 85 per cent of the firms were
involves a firm's qualities and behaviour crisis management (78 per cent), the provision
(definitions 1, 2, 7, 8, 14, 15), stakeholders of advice on reputation building strategy (70
(definitions 4 to 6, 10, 12, 14), corporate per cent), and the completion of surveys and
image (definitions 3, 4, 9 to 11) and research to establish how key audiences
expectations about how the business will act perceive clients' reputations (48 per cent).
in the future (definitions 4, 8, 12). These Around one-third of the respondents recorded
elements were synthesised by the authors into their involvement in reputation measurement
a general definition which was then placed and auditing; similar proportions applied to
before five senior academics specialising in each of the other section 1.2 items. About a
marketing communications. On receipt of quarter of the firms spent less than 10 per cent
their comments the statement was iteratively of their time on reputation management; a
reworded until a consensus that it accurately further 25 per cent spent between 11 per cent
reflected the ``academic'' view of corporate and 20 per cent of their time on the activity.
reputation emerged. Only 13 per cent devoted more than half their
The draft questionnaire was pre-tested via time to reputational matters, and just 8 per
discussions with academic experts in the PR cent had a separate person or section solely
field plus executives in three leading UK PR employed on client reputation management
consultancies, and a trial distribution of the (2.2). As regards the elements of the Fortune
questionnaire to 50 PR firms selected at reputation index (2.3), the four main areas in
random from the sampling frame. After the which the consultancies helped clients
pre-test the wording of the questionnaire was promote their reputations were community
refined and the final version mailed to a and environmental responsibility (54 per cent),
further 355 UK public relations consultancies the quality of goods and services (56 per cent),
selected at random (using the random and innovativeness (41 per cent). The least
number generator available on SPSS) from reported area was ``long term investment
Section 4 (``PR Consultancies: UK'') of the value'' (13 per cent). Responses to section 3
Hollis UK Press and Public Relations Annual from the entire 106-strong sample indicated a
1999. As the purpose of the study was to division of opinion on whether clients were
obtain an insight into the views of the PR generally uninterested in reputation
consultancy sector as a whole, five PR firms management (3.1(a)). Twenty-eight per cent
appearing in the sampling frame and known agreed or strongly agreed with this proposition,
to specialise exclusively in reputation 44 per cent either disagreed or strongly
management (Shandwick for instance) were disagreed. However, a clear majority (58 per
excluded from the survey. Data obtained from cent) agreed/strongly agreed that clients will
such consultancies could be heavily biased in increasingly demand reputation management
favour of all aspects of reputation services in the future (item 3.2(a)). There was
management. After a follow-up, responses general consensus that reputation
were received from 46 chief executives, 16 management was as vital an ingredient of
chairmen and 44 other senior managers of the business as accounting, finance etc. (3.2(b)),
businesses approached, representing 26.5 per with 78 per cent of the sample agreeing/
cent of the sampling frame. Responses were strongly agreeing with the proposition. A
scanned for differences between the average quarter of the sample believed nevertheless
values of the replies received from the earliest that corporate reputation was nothing more
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Practitioner perceptions of corporate reputation Corporate Communications: An International Journal
Roger Bennett and Rita Kottasz Volume 5 . Number 4 . 2000 . 224±234

than ``old wine in new bottles'' (as opposed to A majority of the respondents believed that
43 per cent holding the alternative view ± see new ideas concerning reputation management
3.2(c)). More than half the sample thought came from practitioners rather than academics
that reputation management was about to (52 per cent in favour of statement 3.2(i), 7 per
become as important as corporate image, but cent against and 41 per cent having no firm
only 5 per cent reported current switches of opinion). However, many more respondents
client expenditures towards reputation at the (64 per cent) agreed or strongly agreed that the
expense of other PR activities (3.2(d) and (e)). ``academic'' definition of corporate reputation
Opinions differed regarding whether reproduced in section 4 accurately captured
measuring reputation was basically the same as the true meaning of corporate reputation than
measuring corporate image. Forty-four per disagreed/ strongly disagreed with the
cent agreed or strongly agreed with this proposition (17 per cent). The difference was
statement, while 35 per cent held the opposite more pronounced among the consultancies
view. A similar breakdown applied to item actually offering reputation management (70
3.2(g) about whether managing a client's per cent in favour and 14 per cent against).
reputation was comparable to managing its Also, just 8 per cent of the sample regarded the
image. It was the case nonetheless that the stated definition as irrelevant to the majority of
majority of respondents clearly distinguished their clients, and only 26 per cent disagreed or
reputation management from other PR strongly disagreed that it offered a sound
activities (3.2(m)), although 31 per cent still foundation for devising reputation
thought there was no need to differentiate management policies. These results are
between reputational work and PR generally heartening from an academic perspective as
(51 per cent disagreed or strongly disagreed they indicate that practitioners in consultancies
with this position). Likewise, 67 per cent felt most heavily involved in reputational work are
there was a real difference between reputation significantly more likely than others to agree
management and PR (item 3.2(o)), with just with the academic definition.
16 per cent disagreeing. Only 24 per cent of
the sample equated corporate reputation with
corporate identity (3.2(k)). Respondents did Regression analysis
not generally feel that the PR industry had
failed to understand how to manage clients' In order to analyse more closely the
reputations (3.2(j)). Also, less than a quarter of determinants of agreement or disagreement
the sample did not believe that reputation with the academic definition presented in
management would require long-term changes section 4, a multinomial logistic regression was
in the ways that PR firms operate (3.2(l)). On completed using the three categories:
the other hand, respondents were less than 2 = agree or strongly agree that the definition
complimentary about their clients' abilities to accurately captures the true meaning of
participate effectively in reputation corporate reputation; 1 = neither agree nor
management programmes. Only 20 per cent disagree; 0 = disagree or strongly disagree, as
disagreed or strongly disagreed with the the dependent variable. Covariates were
proposition that clients frequently lack the selected via a stepwise procedure whereby any
expertise necessary to participate effectively in explanatory variable failing to attain
reputation management programmes (3.1(b)). significance at the 0.05 level was deleted from
Moreover, 71 per cent saw clients as being so the regression. (Items 3.1(a) and 3.2(a), (d)
heavily committed to conventional corporate and (e) were highly intercorrelated (R = 0.81;
image programmes that reputation Cronbach's alpha = 0.9) and thus were
management took a back seat (3.1(c)), and combined into a single scale labelled
only 18 per cent of the respondents believed ``perception that the demand for reputation
that clients' internal cultures were conducive management will rise sharply''.) A multinomial
to the introduction of reputation management. logistic/regression model was employed
The main complaint however was that clients because it enables the calculation of the
were reluctant to employ extra staff to probability that a particular response will fall
implement relationship management on behalf into any one of three or more categories.
of their companies. Eighty-four per cent Table II presents the results, which are based
agreed/strongly agreed and less than 2 per cent on the use of the category ``neither agree nor
disagreed with this statement (3.1(f)). disagree'' as the ``reference category'' for the
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Table II Multinomial regression analysis Conclusion


Agree/ Disagree/
The results suggest that most PR practitioners
strongly strongly
in the UK have taken on board the concept
agree disagree
and practice of reputation management as an
Independent variables Odds p Odds p
activity separate and distinct from general
(a) Perception that the demand for public relations work. There was widespread
reputation management will rise support for the propositions that clients will
sharply (i.e. the composite of 3.1(a) increasingly demand additional reputation
and 3.2(a), (d) and (e)) 2.31 0.011 0.96 0.027 management services and that in the future PR
(b) Extent of reputation management consultants will provide a broader range of
services provided 3.22 0.003 0.91 0.011 reputation management facilities. On the other
(c) Belief that reputation management hand, the responses indicated (see section 3.1)
will require long-term changes in a number of barriers to the adoption of
how PR firms operate (3.2(l)) 2.19 0.004 0.89 0.013 reputation management among companies.
(d) Belief that there is no difference Respondents overwhelmingly believed that
between reputation management new ideas concerning reputation management
and general PR (3.2(o)) 0.98 0.05 1.16 0.05 have come from PR practitioners rather than
(e) Belief that reputation management academics. However, the definition of
is just ``old wine in new bottles'' corporate reputation derived from the
(3.2(e)) 0.92 0.023 1.96 0.036 academic literature on the subject received
Notes: Model Chi-square (6 df) = 14.45, p < 0.025; Nagelkerke substantial support from practitioners in
R-square = 0.801 consultancies actually engaged in reputation
management. Respondents who agreed with
dependent variable. Thus, the ``Odds'' the definition tended to be those whose firms
columns of Table II show the changes in the provided a large number of reputation
probabilities of a respondent either agreeing or management services, who thought that client
disagreeing with the definition consequent to a demand for reputation management would
one-unit increase in each of the explanatory rise in the future, and who believed that
variables, relative to the reference category. reputation management was new and different
(Odds values below unity indicate inverse from general PR and would require change in
relationships, i.e. reductions in the odds.) It PR firms' working practices.
Although the section 4 definition of
can be seen that, for instance, a unit rise in the
corporate reputation (with which practitioners
perception that the demand for reputation
substantially agreed) was derived from the
management will grow in the future (regressor
academic literature in the reputation area, only
(a)) leads to a 2.31 times increase in the
a meagre 7 per cent of the sample disagreed
probability that a respondent will agree or
with the statement that most new reputation
strongly agree with the academic definition. management ideas came from practitioners
Table II reveals that the greatest positive rather than the academic domain. An
impact on the probability of agreement is implication of the present study is therefore
exerted by independent variable (b): the extent that the academic community needs to
of the reputation management services broadcast and emphasise the value of its
provided by the consultancy. This variable was contributions in these regards more forcefully
formed by counting the number of items than previously has been the case. Further
ticked in questionnaire section 1.2. The belief research is required into the precise
that reputation management will require long- mechanisms whereby academic developments
term changes on how PR firms operate relating to reputation management are
(variable (c)) was also a positive and significant disseminated to PR executives ``in the field''.
determinant of agreement. Conversely, people
who thought that reputation management was
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Appendix: The questionnaire

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