Measuring the Immeasurable Corporate Reputation

Abstract

Research on any topic seems incomplete till the time a standardized measure for it is not evolved. Measuring intangible assets seems to be a challenging core for the financial academia. More specifically, assigning value to company’s reputation is subjective which confound researchers around the globe. Despite prolific research into this issue, its measurement still baffles the scholars, practitioners, and managers. Although large number of survey methods (like Fortune Most Admired Companies [FMAC] list) have been used extensively, but certain serious limitations of these methods, finally paved way for quantitative tools to measure corporate reputation. An endeavour has been made through current study to compile the efforts of various researchers, who developed proxies for measuring corporate reputation. Reputation of 500 Indian companies constituting BSE 500 index has been measured using six proxies, and Spearman correlation is computed among these proxies. It is interesting to observe that Indian companies are able to maintain their reputation over the years. The findings of the study clearly reveal that reputation research still lacks a concrete measurement. It is high time for the accounting standard setters to devise a framework for measuring and reporting corporate reputation as it has been widely acclaimed as an indispensable asset.