Historically, goodwill arose in the commercial practice of England in the first half of the 15th century, but legislation for more than 200 years prohibited such transactions, considering them to limit competition.
in Russia until the 18th century. the concept of "business reputation" corresponded to the image of a "kind person" and a narrower "honest merchant". And the latter, as you know, is fully associated with such a concept as the "merchant's word", which in common understanding means the ability to pay bills, to comply with the terms of transactions.
In world practice, it is customary to determine the value of the business reputation of an organization by the concept of "goodwill" (from the English "good will" -good will) Therefore, the term goodwill meant that an overpayment transaction occurs of the good will of the parties, without coercion.
The value of goodwill can be both positive, due to the fact that the value of the enterprise exceeds the value of its assets and liabilities, and negative (in this case it is sometimes called badwill), when the market value of the enterprise is below the book value of net assets.
Despite the long period of use of goodwill in practice commercial activities, many unanswered questions remain. Companies' balance sheets reflect huge amounts of purchased goodwill that veil and sometimes distort their real financial condition, but do not reflect the actual amount of intangible assets they own.
Ambiguous and contradictory interpretations of goodwill have a negative impact on its decision. Based on this, the purpose of this term paper is the systematization of approaches to the definition of goodwill and substantiation of the reasons for its origin from the point of view of modern needs of company value management.
The Civil Code of the Russian Federation (Article 150) defines business reputation as a non-property right that belongs to a legal entity from the moment of its formation and constitutes an integral part of its legal capacity.
From the point of view of accounting, business reputation is the difference between its purchase price (as an acquired property complex as a whole) and the book value of its assets (Clause 27 PBU 14/2007 "Accounting for intangible assets"). When a company is acquired by the acquirer, a payment is made in anticipation of future economic benefits from assets not recognized in the financial statements, but for which the acquirer is willing to pay. This value is put on the balance sheet of the enterprise as an intangible asset at the time of purchase of the enterprise. Thus, the reason for the "overpayment" at the time of the purchase of the enterprise is the presence of hidden assets in the organization. Such assets may include: highly qualified management, accumulated business experience, an established sales system, a good credit history and reputation in the market, a favorable economic and geographical position, other assets that cannot be alienated from the organization and transferred to other persons.
Business reputation has a number of features that distinguish it from other intangible assets:
- 1. The inability to exist separately from the enterprise and be an independent object of the transaction, due to the fact that the business reputation does not belong to the organization on the basis of ownership.
- 2. The indisputable absence of a material-material form.
- 3. The conditionality of the value of goodwill, because it does not include the actual costs of acquiring, creating, legal protection
- 4. Possibility to write off, pay off the cost of business reputation in accounting without the risk of depriving the enterprise of this reputation.
Business reputation cannot be transferred, sold or donated, as business reputation is inherent in the entire company and is inseparable from it. It cannot be an independent object of the transaction, since it is not the property of the company, and is inalienable from it in the same way as reputation is inalienable from a person. This is the main difference between business reputation and other objects of intangible assets. Even if the enterprise is sold, the reputation of the company can be damaged, as the former management, leaving, takes with them their skills, business connections, experience, etc.
Goodwill is present only if there is excess profit, although from the point of view of accounting, negative goodwill is also possible. A positive business reputation means that the value of the enterprise exceeds its book value. Reputation management becomes the most valuable strategic competitive tool, since it gives the effect of acquiring a certain market power by the organization.
There is still no single interpretation of the concept of business reputation. But, despite this, domestic companies are doing their best to evaluate it.
Most often, goodwill is considered as a tool for reporting the difference between the sale price and the book value of assets, if this difference cannot be recognized as an independent amount of one or more inventory units of intangible assets. On the other hand, the author of one of the popular textbooks on financial management, V.V. Kovalev, believes that the economic meaning of goodwill lies in the valuation of the intangible value accumulated by the company at the time of analysis (trademark, patents held by the company, developed by it and not in the balance sheet). shown, the established team, etc.). That is, in his opinion, goodwill is "the difference between the market valuation of liabilities and the market valuation of assets."
The most precise definition of this concept is given by I.A. Blank: “goodwill is one of the types of intangible assets, the value of which is determined as the difference between the market (selling) value of an enterprise as an integral property complex and its book value (the sum of net assets)”. He believes that such an increase in the value of the enterprise is associated with the possibility of obtaining a higher level of profit (compared to the average market level of investment efficiency) through the use of a more efficient management system, dominant positions in the commodity market, the use of new technologies, etc.”
Another definition is given by G. Desmond and R. Kelly in the book "A Guide to Business Valuation". Goodwill is defined as “the sum total of those elements of a business or personality that motivate customers to continue using the services of that business or that person that generate a profit for the company in excess of what is required to earn a reasonable return on all the other assets of the business, including all intangible assets that may be identified and separately evaluated.
Russian legislation quite fully reflects the modern view of the concept of "business reputation". It recognizes the goodwill of legal entities, provides an opportunity for her judicial protection, and also allows her business reputation and business connections to be considered as a contribution to a simple partnership. In this case, it needs to be evaluated. This is especially true for a profitable, successfully operating company that has strong established business ties, a favorable location and highly qualified administrative staff.
An individual entrepreneur may also have a business reputation. However, when assessing the value of the business reputation of an individual, section VI PBU 14/2007 is not applicable. Therefore, the issue of the cost of business reputation individual entrepreneur under Russian law, it is subjective and the assessment is made at the personal discretion of individual citizens.
So, if one of the participants contributes his personal business reputation to the share capital of a general partnership, then its assessment is determined by the agreement of all partners and is fixed in a document confirming the contribution of a share to the total capital of the company. Based on the specified information, the accountant takes into account business reputation as part of intangible assets.
When it comes to the dissemination of information discrediting the business reputation of a citizen, the assessment of the moral damage caused is made by the court. In this case, the degree of guilt of the disseminator of defamatory information and other noteworthy circumstances should be taken into account.
Business reputation is an intangible benefit, which is an assessment of the activities of a person (both physical and legal) in terms of his business qualities Modern Economic Dictionary.
The business reputation of the organization is one of the key factors influencing the creation of a positive (sometimes negative) attitude of counterparties to the activities of the company. It develops as a result of the impact on various spheres of public life: economic, political, legal, social, spiritual, etc. Business reputation can work in two opposite directions: be both positive and negative. Positive is associated with positive emotions, confidence, trust, prestige in relation to the activities of the organization as a result of cooperation between clients. The business reputation of a company also largely determines its ability to raise funds, search for strategic investors and partners, and build relationships with the authorities. A negative business reputation shows the negative situation that has developed in the mass consciousness due to distrust, instability and other factors.
Under current law, a company's goodwill is the difference between the purchase price of the business and the book value of assets, less the amount of liabilities. If the company's shares are listed on the stock exchange, the damage to reputation will be measured by the depreciation of the share price as a result of a decrease in the confidence of shareholders and potential investors in the company. Appraiser.ru.
One of the most important functions of the organization, which determines the success of the company, is the regulation of those factors that directly affect the organization both from the inside and from the outside. The most important components of business reputation are:
The quality of the company's products and services
The attractiveness of the image, the image of the leader
The strength of personality, the charisma of the leader
Ethics in relations with external partners - fulfillment of obligations, responsibility, credit history, decency, openness
Ethics in relations with internal partners (corporate governance) - responsibility of managers to shareholders, majority shareholders to minority shareholders, financial transparency of the business
Company publicity
Reputation of top managers
The financial condition of the company, the dynamics of financial indicators
Availability of information about the company, information openness
Company position in terms of market share, market share dynamics
Company fame.
The most important tasks solved in the course of this activity are the formation of a positive image, the achievement of trusting relationships with partners, consumers and suppliers, and, perhaps most importantly, the creation of a high reputation that would work for the company and bring concrete results.
There are a number of features that help to achieve a positive reputation of the organization:
Firstly: increasing the professionalism of existing staff and attracting more qualified employees to the company.
Secondly: strengthening relationships with current customers and attracting new ones if they are faced with a choice between functionally similar goods or services.
Thirdly: strengthening positions in the market.
Scheme of factors influencing the formation of the business reputation of an organization:
Journal "Personnel Management" (N3 2005) article: "Business reputation as one of the most important strategic advantages of the company." T.Solomanidina, S.Rezontov, V.Novik
It is difficult to find a company that has a reputation protection and performance improvement program for its internal and external audiences. One of the obstacles to building a reputation management system is the lack of unambiguous terminology. Many difficulties arise from the erroneous confusion of the concepts of "reputation" and "image".
Researchers at the University of South Florida College of Business Administration (USA) identified 49 original corporate reputation statements in books and articles published between 2000 and 2003. The analysis showed that, despite the apparent diversity of interpretations, all available interpretations can be divided into three groups that define reputation as:
General awareness of the company's activities, which does not require in-depth analysis and evaluation;
Some knowledge obtained by directly involving target groups in assessing the state of the company - based on own experience or the opinions of third-party experts;
An intangible object that has a value expression, i.e., in fact, is a financial or economic asset.
Such a classification makes it possible to formulate three basic definitions that make it possible to clearly separate concepts and identify a managed object.
The corporate image is a stable emotionally colored image that is formed in the minds of the target groups as a result of the perception of information about the organization.
Corporate reputation is a collective opinion about a company that is formed over time in the minds of target groups based on an expert assessment of the economic, social and environmental aspects of its activities.
Reputational capital is the monetary value of reputation as an intangible asset of a company.
The diverse visual and verbal features of companies help to acquaint customers with it and compare the characteristic features of the organization with its activities. These features include a logo, slogan, design, color, corporate business cards, letterhead, corporate envelope, fax message form, advertising printing, corporate website design, corporate clothing - all that is commonly called the corporate identity of the company. These are means of objective positioning of the company in the market, which can be seen, touched, heard, sometimes smelled, in a word - felt.
What do we mean when we say “image” and “business reputation”? Image is a manifestation of the connection between the interests and needs of the two parties interacting in the process of communication: the one who judges and the one who is judged.
If we highlight the differences between business reputation and image, first of all, it must be said that business reputation is a reflection of stereotyping, the repeatability of assessing the market behavior of a subject of business reputation (product, company, country) by an object of business reputation in a fairly specific direction, that is, business reputation develops as a single image , presented to the entire target group, manifesting itself in the same qualities, signs, features. For example, the reputation of a brand, company, product, etc., but at the same time it can be perceived differently by specific audiences, and, accordingly, a different opinion will be built about the business reputation of the same entity.
And the image, on the contrary, is diverse. Our sensations naturally pass into our perception, which is in our minds. This is where the image of the company is formed. Therefore, the image is not constant sign organization, but represents a strong impression with great regulatory properties. From this point of view, an image is a special mental image that strongly and in a certain way influences the emotions, behavior and relationships of an individual or group. Since people have different information, different experiences and different perceptions, a company cannot have one image.
Of course, at the same time, our assessment of how and in what way business reputation correlates with our needs and requirements, as well as in the image, is significantly emotionalized. But since reputation is built in one particular subject area, where real facts are of great importance, then the rational in reputation is of greater importance than in the image.
On the one hand, we can say that business reputation is a rational basis for the image. On the other hand, business reputation is “wider” than image. These two concepts seem to intersect, having a common core and their own content elements. The fact that in the image plays leading role emotional assessment shows that in image management the main way of influence is the impact on the emotions of the target audience.
Image is a manipulative, attractive mental image that affects the emotional sphere of a person.
The main function of the image is the formation of a positive attitude towards someone or something. As a result of the formed positive attitude, trust in the company comes, and, as a rule, high marks and a confident choice. Such is the psychological chain generated by a positive attitude. In addition, a positive image contributes to an increase in prestige, therefore, authority and influence. A positive image is also an important factor in a high rating, which is very important in a public activity saturated with various information. That is why Americans say that "a positive image is worth billions of dollars."
The reputation of the company is aimed primarily at consumers and reflects the company's desire to make them loyal to the company itself and its products. The high reputation of the company serves as a guarantee for the consumer of the quality of the products sold and (or) the services provided. The confidence of members of the public that a company with a positive reputation will not sell a product of inadequate quality will be reflected in an increase in the speed and volume of sales of goods.
Now the management of business reputation and the definition of the image of the organization are two inseparable streams. Just as it is impossible to single out the rational and the irrational-sensual in one person (since they are elements of one whole - the brain), so it is impossible to hope that corporate reputation management itself can replace corporate image management, and vice versa. These are two mandatory components of all large companies. Underestimation of any of the components leads to the fact that the overall result worsens.
The common denominator for the concept of image and business reputation is the concept of "trust". An effective image is an image that inspires trust of the target audience in the subject of the image. And an effective corporate reputation is a reputation that inspires confidence in the subject of business reputation on the part of the target audience.
By influencing the emotions of target audiences with the totality of information, a trusting image and trustworthy business reputation are formed.
The consumer pays for the image and business reputation of the brand, largely focusing on the irrational perception of the brand. But with all the irrationality of such perception, the cost of the image and business reputation of the brand is very clearly determined by the “brand premium”.
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Introduction
Conclusion
Introduction
In addition to the brand, there are many other marketable assets that also have a significant impact on the capitalization of the company. So, for example, the business reputation of the enterprise (goodwill). Business reputation is one of the most important elements of the intangible assets of an enterprise. Business reputation does not exist separately from the enterprise. These are inalienable property. They cannot be disposed of separately from it, which distinguishes this type of asset from all other accounting objects, including other types of intangible assets.
In practice, business reputation means the good name of the company, which reflects its history, the authority of the founders, the quality of goods and services, the professionalism of the staff, and social responsibility. It is created by the honest activity of the company for a long time. Business reputation is, of course, related to the image of the company. However, it is impossible to equate image and reputation. Unlike reputation, an image is a superficial idea of an object artificially created in the minds of people, and created in a short time. Comparing image and reputation, some scientists use the following analogies: "Image is a mask, reputation is what is hidden behind it." It should be added that the mask-image is often used to hide the true content of the company, the true purpose of its activities, the true intentions. Quite often, many companies succeed.
Decisions on the formation of the company's reputation are a set of strategic steps and procedures designed for the long term. The image is most often created by invited firms specializing in PR-actions, while the reputation is created by the enterprise itself with its impeccable activities. Maintaining the already established reputation of the company at a high level is expensive. Sometimes, in order not to lose their reputation, firms, incurring multimillion-dollar losses, withdraw their product from the market if they begin to doubt its quality.
A textbook example was how in 1982 in Chicago, as a result of the actions of intruders in medicinal product Tylenol, manufactured by Jonson & Jonson, was injected with poisonous substances, which led to the death of several patients. Tylenol was the company's best-selling brand, and there was a real threat to the company's reputation, resulting in future multimillion-dollar losses. The company, using the press, immediately publicized the case and withdrew the entire product from the market, although, as the study showed, not every batch of Tylenol was in doubt. As a result, Jonson & Jonson's reputation was saved, and Tylenol regained a quarter of the American market. The purpose of such steps is to maintain the reputation of firms at the high level they have won. The business reputation of a company is formed over the years, and among the factors that determine it, one can single out such factors as, for example, performance efficiency, high creditworthiness, first-class personnel, service culture, decency of management.
The purpose of this work is to study business reputation as an important element of the company's intangible assets, which significantly affects the company's capitalization.
Objectives: to define business reputation and study the theoretical aspects of its origin, to reveal the essence and mechanisms of formation of the company's reputation, to determine the differences from the actual image of the company.
The subject is the assessment of the influence of the firm's business reputation on behavior in organizations.
The work has a traditional structure and includes an introduction, the main part, consisting of 3 chapters, a conclusion and a bibliographic list. The sources of information for writing the work were the basic educational literature, theoretical works, articles and reviews in specialized and periodicals, reference literature, other relevant sources of information.
1. Goodwill as an object of intangible assets
1.1 Factors affecting the value of goodwill
Business reputation or "Goodwill" exists in any organization, whether it wants it or not. The origins of its formation are in the company itself and are determined by its industry affiliation, legal form, size, age, development history, types and scale of business. At the same time, the individuality of the company is also important, determined by the corporate style, that is, a number of attributes that allow it to be identified, to have features that “speak” for themselves (name, logo, symbols, corporate colors, etc.). The presence of all this allows not only to recognize the company, but also to explain to people what it is, and sometimes even what it does. In addition to this, various contact audiences can also recognize the organization by such features as the building in which it is located, the interior of offices, signboards, and its infrastructural elements.
The business reputation of an organization is one of the types of intangible assets - it is an assessment of a firm, enterprise, businessman by subcontractors, counterparties, consumers; representation of partners about the company, favorable to its activities and taken into account in the conditions of management; "good name" of the company. Considered as a component of intangible assets on a par with copyright, trademark. Typically, a firm's goodwill is assessed in qualitative terms, but quantitative indicators are also applicable, for example, in the form of the difference between the profit received by the firm and the average level of profit in the industry that produces similar products.
Today, the issues of reflecting business reputation in reporting, as well as assessing the expected risks and income or losses in connection with possible insurance, are topical. To recognize goodwill as part of intangible assets, the following conditions must be met:
1) the acquired enterprise loses the status of an independent legal entity;
2) business reputation is reflected separately in accounting and reporting when making a purchase and sale transaction of an enterprise;
3) the reflection of business reputation in the documentation depends on its positive or negative value.
The goodwill of the entity, the premium paid by the buyer in anticipation of future economic benefits, is accounted for as a separate inventory item.
Negative business reputation of the organization - a discount from the price provided to the buyer due to the lack of factors of the presence of stable buyers, reputation for quality, business connections, management experience. Thus, only a positive business reputation can be taken into account as an intangible asset.
The value of the acquired goodwill of the organization for accounting purposes is determined by calculation as the difference between the amount paid to the seller for the organization and the sum of all assets and liabilities on the organization's balance sheet at the date of its purchase. The business reputation of an organization when acquiring privatization objects at an auction or through a tender is determined as the difference between the purchase price paid by the buyer and the estimated value of the sold organization. The acquired business reputation of the organization is amortized over 20 years, but not more than the life of the organization. With a positive business reputation of the organization, depreciation deductions are reflected in accounting by a uniform decrease in its initial cost. A negative business reputation is evenly related to the financial results of the organization as other income. For the development of an organization, it is believed that business reputation is an invaluable capital that is accumulated over the years, but can be irretrievably lost as a result of even one wrong act. Business reputation can suffer under the influence of internal factors caused by one's own strategic or tactical mistakes, and "thanks" to external circumstances that do not directly depend on the company's activities.
One of the most important factors affecting business reputation is the business trust of individuals and organizations. In the process of relationships, they form common views, ideas, opinions, interests, they share information, considerations, and make joint decisions. Long-term productive relationships, due to shared material and moral values, create the prerequisites for trusting relationships and repeated transactions. This suggests that the trust of the organization on the part of business entities is the basis for the formation of its business reputation. The question is how to form it.
Trust in an organization is a multifaceted concept. It can be summarized as the five most important modern ideas about the company:
1. competence,
2. honesty,
3. sequence,
4. care,
5. resonance of values.
The concept of competence is based on the belief of consumers and business partners that the company has the knowledge and skills to conduct the business in which it is engaged. The concept of honesty implies the company's readiness to comply with the terms of contracts, to conduct business fairly, that is, not to try to cheat and mislead business participants, not to deliberately involve them in illegal and unethical actions. The next element of organizational trust - caring - has become important relatively recently. After all, the notions of competence, integrity, and consistency are being implemented by many companies today. Against this background, care can become a new factor of differentiation. The concept of caring is associated with two components: value in exchange for money and motivated employees. Of course, the company must bring certain benefits (values) to consumers of its goods and services that are adequate to the set price, expectations and perceptions of customers. At the same time, the employees of the company should be motivated to show concern for the quality of the goods or services they provide, a high level of service.
The final component of an organization's trust is the resonance of values. It assumes the belief of the company's partners that it does not violate the "consensus of values" accepted in society and in the market. key issues related to the operation of the product, as well as additional issues such as environmental protection and ethics. A company that implements in real practice the above concepts of trust in an organization may well have a good business reputation. However, trust is not the only characteristic of the concept of "business reputation of the company". Business reputation is also closely related to such concepts as image, brand, fame, respectability, authority. In order to more deeply reveal its content, it is necessary to understand the factors and prerequisites for its formation and development. The business reputation of a company depends on many factors that can be classified according to various criteria. In the most generalized form, they can be divided into two groups: internal and external factors.
Internal factors. The most important internal factors influencing the reputation of a modern organization are also its long-term vision, mission and strategy, which testify to the company's understanding of its mission and its desire to develop dynamically. An organization that does not have development guidelines, does not inspire confidence among business partners and consumers, and is not of interest to investors. Equally important factors affecting the business reputation are the solvency and financial stability of the company, that is, its ability to operate profitably for a long time. This, in turn, is determined by the volume and quality of goods (works, services) sold, the level of organization of production and labor, technical, technological and other factors.
The use of modern information technologies. They allow you to increase the transparency, information and investment openness of the organization, which, on the one hand, provides customers and business partners with greater access to information about it, and, on the other hand, the speed of dissemination of false or negative information may adversely affect its reputation. In addition, this information can be used by competitors of this company. The quality of management and human resources are also the most important factors influencing the formation and development of the organization's business reputation. A company should be headed by a leader who is a professional, an effective manager, an extraordinary personality capable of leading people to achieve their goals. Having such a personality certainly enhances the company's reputation in the business world.
The managerial corps must also possess such qualities as professionalism and competence, the ability to manage people, delegate authority and take responsibility, and communicate with business partners, observe business ethics. Employees of the organization, their professionalism, motivation to achieve the goals, style of behavior, ethical standards directly affect the reputation of the company. Although top management is undoubtedly the core of the company, must express and support those ideas that will be implemented by subordinates, the embodiment of the mission and goals of the organization depends on the employees.
Among the internal factors influencing the formation and development of business reputation, a special role is played by corporate culture, that is, the norms and values that employees adhere to. Corporate culture is a complex composition of important assumptions accepted and shared by team members. It manifests itself in the relationships between people in the organization, which are based on common value orientations, beliefs, expectations, beliefs and norms. Value orientations should not only be declared, but also become an integral part of the inner life of both management and employees of the company. Corporate culture is designed to solve, on the one hand, the tasks of internal integration, and, on the other hand, external adaptation associated with the organization finding its niche in the market and its adaptation to a constantly changing external environment. Consequently, the corporate culture can also be classified as external factors that influence the formation of the company's business reputation.
External factors. Among the external factors influencing the business reputation of the organization, sponsorship, social and charitable activities should also be noted. By sponsoring cultural, sports and social events, organizations form or strengthen their image and business reputation. Charity also indicates the desire of the company to participate in the decision social problems the most vulnerable segments of society, financially disadvantaged institutions and territories. As evidence of the stability of the company's development, its success, charity, of course, creates the preconditions for a positive perception of this organization. Corporate communications also have a dual nature of influence on business reputation. They play an important role both within the organization itself and in its external environment. If internal communications are designed to establish and maintain interactions between people and structural divisions in the company itself, then external communications are aimed at organizing interaction with the subjects of its external environment (consumers, suppliers, investors, creditors, authorities, etc.). In the external environment, they also serve as a means of positioning a positive image of the organization, form ideas about its potential, success, purpose, social responsibility. Of particular importance is the coverage of the company's activities in the media. The complex of positive information about it in the media plays an important role in the "untwisting" of the company and its positive image.
The reputation of an organization also depends on the image of the industry in which it operates and the image of the territory (region) where it is located. Of even greater importance in the process of forming a company's business reputation are the nature and duration of relationships with consumers, business partners, and authorities. The considered factors influencing the formation of the company's business reputation are not exhaustive, moreover, they are closely interrelated. Therefore, when solving problems in the field of reputation management, it is necessary to identify these factors, assess the degree of their importance and interdependence, monitor their changes and make timely adjustments to the targets and the resulting unforeseen intermediate results.
1.2 Difference of goodwill from other objects of intangible assets
Goodwill occupies a special place among intangible assets, since it differs from other intangible assets by the valuation method, the acquisition method, and the depreciation method.
What distinguishes goodwill from other intangible assets of an enterprise? The difference lies in the fact that, unlike other intangible assets, such as brands, licenses, patents, etc. business reputation cannot be separated from its bearer - an enterprise, firm, businessman, etc. For example, the attractiveness of a company logo or symbol strongly influences and attracts potential buyers positive emotions, approval and desire to make a purchase, start cooperation, but unlike the business reputation of the company, this logo can easily be separated from the company and sold separately to another company. But business reputation remains in its place, with its company.
Also, unlike other intangible assets, goodwill arises in connection with the acquisition of an enterprise as a property set.
1.3 The business reputation of the firm as one of the factors determining organizational behavior
The conduct and reputation of a company are its most important values. They determine the behavior of employees towards colleagues, consumers, suppliers and shareholders, the society for which the company operates, the entire global community as a whole, as well as competitors. The team, represented by senior officials and ordinary employees, must fully share the commitment to ethical behavior and business practices. To do this, companies create a code of business ethics, which includes many issues, including the resolution of conflicts of interest, confidentiality of information, compliance with legal requirements, respect for employees, proper use of company funds, etc. The ethical behavior of a company and its employees has more value than profit, sales volume, or other measure of success. Ethical behavior is not only the norm, but also a factor contributing to success.
Organizational behavior is a field of knowledge about how people behave in an organization and how their behavior affects the results of its work. The behavior of individuals in an organization is determined by the rules and restrictions that operate in it to achieve its goals.
A qualitative characteristic of managing the organization's behavior is the organization's reputation. The reputation of the organization is the elements of the internal and external environment of the organization that affect the creation of a stable opinion about the qualities, advantages (disadvantages) of the organization, consisting of the image of the organization, the authority of the first person, and the organization's fame in the market. Reputation, strictly speaking, means "good name". Although we hear the combination "bad reputation". Reputation is what people say behind your back (Edgar Howe).
A good reputation helps:
Attract those who are currently needed for a sensation;
To keep in the sphere of one's own influence groups that have already been conquered;
Manage people more effectively through persuasion, influence and manipulation;
Achieve your goals;
As a result, you get a feeling of confidence and peace of mind.
The existence of an organization in the market involves a constant search for forms and methods to strengthen its position, expanding the range of products and services that it provides to the buyer. The behavior of employees is set by the development strategy of the organization and is integral part the reputation of the organization and the competence of the staff. This direction involves the formation and maintenance of the required standards of behavior among employees in accordance with behavior patterns.
The behavior of employees is decisive in the activities of the organization and is an integral part of such a general indicator of activity as the competence of personnel. Competence is a combination of the following elements: knowledge, professional skills, behavioral and communication skills of personnel. To maintain an impeccable business reputation, employees of the firm must use attractive clientele behavior. Attractive customer behavior implies such behavior of employees, which is aimed at maximizing the attraction of customers, which allows you to increase the performance of the organization.
As a rule, an organization with a good reputation attracts not only customers, but also employees. Therefore, employees value their work and their behavior corresponds to the status. Each employee, both at the time of hiring and in the process of work, must meet the qualification requirements, that is, have practical skills and experience in the relevant field, necessary cultural level and vocational education.
The active work of an employee to improve the level of professional knowledge, study domestic and foreign experience and apply them with high efficiency is one of the main conditions for career growth. The initiative and creativity of employees are especially noted, proposals for strengthening the authority of the company, achieving high results, energetic participation in the development and implementation of ideas and proposals valuable to the company are highly valued. The duty of each employee is to maintain honest relationships with clients and work colleagues, not to take actions that could humiliate their dignity. Each of the company's employees contributes to creating a good impression of the company. The business reputation of the company is formed over the years, which obliges employees to behave in such a way as to correspond to it. Therefore, when talking on the phone, communicating in person or in writing, employees are required to behave “in style”. The idea of style is carried out due to the observance of certain rules.
"Person" of the staff:
When talking with a client or colleague, employees should be polite, friendly, friendly;
You should be attentive to the requests of the client. In this case, the employee must give advice or provide the necessary assistance.
"Person" in correspondence:
The language of the staff in letters should also be stylish. All correspondence (faxes, letters, memos) demonstrate a level of efficiency and professionalism. All copies of outgoing correspondence must remain in the office. In addition, correspondence:
Must be printed on the appropriate form;
Must be properly formatted;
Must be addressed to a specific person with their full name;
Should not contain spelling errors;
Should not be handwritten;
Must always contain a signature under the name and position of the sender.
"Face" in telephone conversations:
The staff of the firm should talk on the phone with the client, as if he is in front of your eyes. Answer the call quickly, no later than the third call. This speaks to the courtesy and efficiency of the staff. It is necessary to introduce yourself and present the place that the client called, as well as offer your help. You should speak calmly, slowly, giving the client the opportunity to contact you with requests.
The appearance of the staff creates an initial impression of the company for the client. Therefore, all employees should take care to look smart and well-groomed, tidy.
The goal of the team is to create an open, friendly atmosphere. An important role is played by the relationship of the team with each other. After all, employees of the company can differ in gender, age, nationality, etc. Employees must treat each other with respect, regardless of position and cultural differences. Each member of the team becomes one with the goods and services provided by the company.
The behavior of an employee includes all aspects of the external and internal culture of a person, namely: the rules of behavior and treatment, the ability to correctly express one's thoughts, to observe speech etiquette. Politeness testifies to the culture of a person, his attitude to work and the team. It is important for employees to be tactful, to always remember about respect for the person. Tactful behavior of employees consists of a number of factors. The main one is the ability not to notice mistakes and shortcomings in the behavior of customers, not to focus on them, not to show excessive curiosity about clothes, customs, and traditions. You can not ask unnecessary questions, talk about your affairs, be importunate. You can’t show the client whether you like him or not, make comments, read moralizing, express various claims, ask about his personal life. Continuous quality improvement is not a cost, but a long-term investment based on securing customer loyalty by meeting their needs. This statement is based on research showing that the cost of acquiring a new customer is several times greater than the cost of retaining an old one by offering quality service.
Thus, the quality and business reputation of the company to a large extent depend on the qualifications and interest of human capital, on its creative abilities, the ability to master new technologies, as well as on the use of new organizational processes and forms used to serve customers.
In other words, reputation is not only what a company produces, but also how it conveys it to the consumer and by what means it draws attention to itself. In today's market, concern for the company's reputation is moving from the category of advantages to the category of necessary market requirements. A company's reputation is much more than its products. These are the actions of management and employees, and relationships with partners, media, customers, etc. Therefore, at certain periods of company development, it is reputation that helps many companies to “save their face” and not lose business.
2. Evaluation of business reputation and reputation ratings
Since goodwill is an intangible asset, it is very difficult to quantify it. Today, there are many scientific models for quantifying business reputation. E. Griffin, the author of the fairly well-known book “Reputation Risk Management: A Strategic Approach”, describes one of the most complex, according to him, models - the RepTrak Pulse measuring tool, created by the American Reputation Management Institute as “a reputation assessment program that includes 23 attributes , grouped into seven dimensions that describe the common platform on which companies build their reputation." Among these attributes are "Responsiveness to change", "First company to enter the market", "Stands for fair social action", etc.
The question arises: how correctly do 23 attributes and seven parameters reflect the true assessment of business reputation? Why are there not 22 or 25 attributes, for example, and not five or 10 parameters? That is, a certain subjectivity is inherent in this evaluation mechanism from the very beginning. The Rep Trak Pulse model has a very limited use in practice. Griffin writes that reputation scoring is not a science, and it is hardly possible to calculate the total cost of reputation based on only 23 attributes. AT economic theory offers various methods for assessing the business reputation of the company. Usually they are recognized as more correct, since they are based on quantitative indicators.
Thus, one of them involves the assessment of business reputation by the excess of the paid price of the enterprise (property complex) over the value of all its net assets according to the balance sheet. This is the official approach to assessing reputation in accordance with accounting rules. However, today there is no single established practice for assessing business reputation in general and intangible assets in particular. The valuation can also be based on turnover, excess profits, options, etc., but none of these valuation options is generally accepted and each has its own drawbacks. Difficulty in assessing business reputation also arises when it comes to a non-public company whose shares are not traded on stock exchanges and, accordingly, it is extremely difficult to assess the company's market value.
Reputation ratings are also used to assess reputation. The best known is probably Fortune magazine's "World's Most Admired Companies" ranking, compiled on an annual basis. Also, since November 2006, Forbes magazine has published the World's Best Corporate Reputations rating, prepared by the Reputation Institute. Another of the most recognized ratings can be noted such ratings as The Dow Jones Sustainability Index (ranking of the most sustainable companies in the world) and The 100 Best Corporate Citizens (Ranking of 100 companies with the most active public position of Corporate Responsibility magazine).
Ratings are good because at a certain point in time with regularity, as a rule, once a year they measure the business reputation of the world's leading companies. However, it is incorrect to talk about an accurate quantitative assessment of the reputation of companies through ratings. There are many examples of how places in reputation ratings do not fully reflect the financial and economic performance of companies. Such financially successful companies (in terms of revenue and profit5) as, for example, Exxon Mobil, Nestle, Intel, Toyota, do not necessarily occupy leading positions in reputation ratings. For example, in the Fortune ranking in 2012, these companies ranked only in the third ten. However, if we take the value of the leading companies in the Fortune rating on the stock exchanges, then there is a connection between the place of these companies in the rating and their capitalization. Thus, according to the results of 2011, all companies of the top five of the Fortune reputation rating, except for Amazon.com, were among the 25 largest companies in the world in terms of capitalization, and the leader of the reputation rating, Apple, is today the largest in the world in terms of market value, which exceeds $520 billion
In conclusion of the discussion of the value of ratings for assessing business reputation, it is also important to note that in recent years, more and more attention has been paid to the analysis of ratings in the business community. Accordingly, managers are also making efforts to improve the indicators of the business reputation of their companies.
At the end of 2011, the results of a survey conducted by Ernst & Young and GreenBiz Group showed that 55% of companies participating in the survey fill out various questionnaires and forms to participate in various ratings to assess the reputation and corporate social responsibility of companies. This happens despite the fact that filling out the questionnaires takes time.
a) communicates to external audiences that the company is responding to the challenges of the times and is striving to strengthen its reputation through regular disclosure of information and improvement of its performance in the ratings,
b) promotes involvement on a permanent basis in solving serious reputational problems of the company's top management, which receives a signal that regulators, the press, investors, and employees of the company are closely watching the ratings.
And a correct assessment of the initial position and the formation of the target value of business reputation following the assessment in the future dictate the need to develop and implement a clear strategy for its effective management.
Conclusion
Based on the above, the following conclusions can be drawn.
Reputation is a set of opinions about the company of representatives of stakeholders, one way or another connected with this company (employees, investors, creditors, consumers, government officials, analysts, media, etc.). Reputation is the "good name" of the company, it is formed under the influence of many factors and is evaluated according to various parameters.
Benefits of a good reputation:
Ability to sell products at higher prices;
Possibility of cheaper acquisition of labor: most employees are more willing to work in well-known companies;
The better the reputation, the longer the period during which it receives the maximum income from its activities.
To build a positive reputation you need:
Impeccable product quality
High level of customer service,
Correctly defined mission of the company,
Evaluation of the company's activities in the media,
The attitude of state and public structures towards it,
Effective business connections;
Developed corporate culture;
Unique corporate identity;
Positive image;
Social responsibility in business.
List of used literature
1. Buksha K.S. Business reputation management. Russian and foreign PR practice. - M.: Williams, 2007. - 144 p.
2. Vikhansky O.S. Strategic management: textbook. - 2nd ed., revised. and additional - M.: Gardarika, 2006.
3. Galumov E. Fundamentals of PR. - M.: Chronicle XXI, 2004.
4. Glumakov V.N. Organizational behavior: textbook. allowance. - M.: Finstatinform, 2007.
5. Dowling G. Reputation of the firm: creation, management and performance evaluation. - M., 2003.
6. Dowling G. Company reputation: creation, management and performance evaluation: M.: Image Contact, 2003. - 368 p.
7. Kondratiev E.V., Abramov R.N. Public Relations: A Study Guide for high school. - M.: Academic project, 2009.
8. Kochetvova A.V. etc. Theory and practice of public relations. - St. Petersburg, 2009.
9. Milner B.Z. Organization Theory: Textbook - 4th ed. revised and additional - M.: INFRA - M, 2007.
10. Timofeev M.I. Public relations (public relations). Tutorial. - M.: RIOR Publishing House, 2006.
11. Chumikov, A.N. Public relations. - M.: DELO, 2000.
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The activities of the organization are carried out in conditions of various interactions and relationships, in an environment that has various interests - economic, political, legal, social, spiritual, etc. her activities. The flexibility of interaction and feedback is a process that contributes to the achievement of the goals of the organization. The most important tasks solved in the course of this activity are the formation of a positive image, the achievement of trusting relationships with partners, consumers and suppliers, and, perhaps most importantly, the creation of a high reputation that would work for the company and bring concrete results. The good reputation of the company helps it:
- to give additional psychological value to products and services;
- attract new consumers if they are faced with a choice between functionally similar goods or services;
- attract more qualified employees to the company and increase job satisfaction of existing staff;
– raise funds in the stock market and survive in the event of a crisis.
Naturally, it is clear to everyone that reputation is very important aspect activities of any firm that should be constantly worked on, but it is difficult to find a company that has a program to protect its reputation and improve its characteristics for its internal and external audiences.
Most often this happens for one simple reason - the concept of "reputation" is replaced by the concept of "image", on the formation and development of which all the company's activities are oriented. So what is the difference and what is a more important element for the successful functioning of the company - image or reputation?
Acquaintance with any company begins with various visual and verbal signs by which people can identify this company and which form the essence of it. corporate identity. These features include a logo, slogan, design, color, corporate business cards, letterhead, corporate envelope, fax message form, advertising printing, corporate website design, corporate clothing - all that is commonly called the corporate identity of the company. These are means of objective positioning of the company in the market, which we can see, touch, hear, sometimes smell, in a word - feel.
Our sensations naturally pass into our perception, which is in our minds. This is where the image is formed. companies. Therefore, the image is not a permanent feature of the organization, but is a strong impression with great regulatory properties. From this point of view, an image is a special mental image that strongly and in a certain way affects the emotions, behavior and relationships of an individual or group. Since people have different information, different experiences and different perceptions, a company cannot have one image - its image is diverse.
The concept of "image" was introduced into scientific use only in the early 60s of the twentieth century. Image comes from the Latin word "imago" - an image that is associated with another lexeme -"imitari" , i.e. imitate. Dictionary Webster gives the following definition of this concept: image - artificial imitation or presentation of the external form of a certain object, especially a person. It is a mental representation of a person, product or institution, purposefully formed in the public mind with the help of publicity, advertising or propaganda.
Other researchers argue that the term "image" has English roots and is most often used to define the image that is designed, created in order to cause the desired changes in the minds and behavior of people, to have a certain socio-psychological impact on them.
One of the first to introduce this concept into the special Russian literature was O. Feofanov. In his famous book "USA: Advertising and Society", published in 1974, he considers the image as the main means of psychological influence of the advertiser on the consumer. In domestic literature, the concept of "image" usually means an artificially formed image of someone or something - a politician, entrepreneur, company, product.
There are many definitions of image, but one can single out their common part - it is an artificial image that is formed purposefully and has an emotional and psychological impact on a certain group of people. That is, this is all that the company creates in order to stand out externally and become recognizable and attractive.
The viability of the image is based on the effect of perception noticed by Heraclitus: "The main thing is not what is, but how we understand it." Therefore, the main task of the company is the right choice of means that act on the minds of people. Image is a socio-psychological impact that can strongly influence consciousness, therefore, the development of the image should be carried out by professionals who know not only the basics of business, but also the basics of the psychology of the individual and social groups. The purpose of the image is to transform an individual image into a collective image, while the developers must take into account people's behavior patterns and their possible reaction to a particular image. To penetrate into the consciousness of a person, it is necessary to establish contact with him, that is, to develop effective communication, and the main media will be media sources, namely television, radio and the Internet.
The regulatory power of the image is also determined by the fact that "the image is the reality of an illusory space." It is believed that people live, as it were, in two worlds - the real and the illusory, or imaginary.
AT real world events occur, people act, relations dominate, the meaning, meanings and characteristics of which are adequately reflected in the minds of people and are evaluated. There are no or very few crafty versions, distortions and deceit in it.
In the illusory space, however, reality is purposefully distorted and presented in a certain way, usually in accordance with hidden interests. In most cases, we are not dealing with true information, but with specially constructed images that have the character of stereotypes and attitudes.
The illusory world is psychologically much more comfortable than the real one, because it has the following characteristics: it is fundamentally unverifiable, therefore, there are fewer disappointments in it; irrational, therefore it is perceived as a non-alternative given; harmonious, holistic, consistent; always extremely friendly, directed at a person, etc.
Based on the foregoing, the image is a manipulative, attractive mental image that affects the emotional sphere of a person.
Like any object and a special mental image, the image has the following characteristics:
- implies a strong emotional response, this follows from its very definition;
- an ideal object that arises in the minds of people;
- is not subject to direct measurement, it can only be assessed by the relationships manifested in communication, activity, choice;
- is holistic and consistent, corresponds to unambiguous generalized ideas;
- unstable, it constantly needs to be "reinforced" with advertising or various targeted promotions;
- contains a limited number of components: the complexity of the design interferes with its perception, and therefore makes the attitude towards it ambiguous;
- to some extent realistic, although it is an illusory image;
- pragmatic, i.e. focused on a limited range of tasks that correspond to the goals of the organization or the specifics of the current situation, its development;
- has the property of variability, i.e. absolutely "rigid and unchanging construction" is unacceptable, the image is always dynamic, it may be necessary to make adjustments.
The main function of the image is the formation of a positive attitude towards someone or something. As a result of the formed positive attitude, trust in the company comes, and, as a rule, high marks and a confident choice. Such is the psychological chain generated by a positive attitude. In addition, a positive image contributes to an increase in prestige, and consequently, authority and influence. A positive image is also an important factor in a high rating, which is very important in a public activity saturated with various information. That is why Americans say that "a positive image is worth billions of dollars."
When forming an image, it is necessary to clearly understand what kind of image is needed. Naturally positive and attractive, but specification is still needed. The choice of the type or type of image determines the strategy and content of the activity for its creation. To do this, it is necessary to consider image typologies developed on the basis of general and special grounds according to the criteria of similarity and difference.
The orientation of the manifestation, that is, information about the signs by which the image is formed:
- external orientation, that is, manifested mainly in the external environment focused on customers or consumers (corporate identity, logo, office interiors, appearance personnel, etc.);
- internal, formed as an impression of the work and relations of personnel (corporate relations, ethics of behavior, features of business communication, traditions, etc.).
Obviously, there are close functional links between these types of image. Moreover, interconnections are desirable and necessary - their non-coincidence will cause distrust in the organization and its activities.
Emotional coloring of the image:
- positive image;
- a negative image (formed mainly in politics by political opponents with the help of the so-called "black PR" and anti-advertising).
Focus:
- a natural image that develops spontaneously as a result of the practical activities of the organization, without special promotions and advertising;
- artificial, created specifically by advertising or promotions and not fully corresponding to the nature and effectiveness of the organization's activities.
The degree of rationality of perception:
- cognitive, giving "dry" special information (focused mainly on people who are knowledgeable, narrow specialists);
- emotional, sensual (such an image is aimed at a wide audience and is designed to evoke a strong emotional response).
The content of the image, the correspondence of the image to the specifics of the company's activities:the image of the organization; image of the leader (team); image of an idea, a project.
The most important for the emergence of trust in the organization and, accordingly, the formation of its positive image are people's ideas about the financial situation of the company, about the history of the company, its traditions, about social responsibility to society, about managing the organization, about the personality of the leader, about the attitude towards personnel, about the ethics of activity. and relationships.
Analyzing research on the image, one can draw a paradoxical conclusion: the image is contradictory, since it must obey the requirements of society and at the same time be individual, that is, the image is perceived in contrast to the unified and at the same time unique image companies.
If any feelings and beliefs about the company (its image) correspond to a person's ideas about corporate behavior, then a good reputation this company. Thus, a good reputation reflects a close match between the company's image and own system the values of the individual.
Climbing the steps of the pyramid from the bottom up demonstrates our path from ignorance of the company to recognition, positive perception and, finally, formation reputation as a strong belief in the advantages of this company, a strong desire to use only the products of this company and a strong desire to recommend this company to your friends and acquaintances. The result of such an ascent is the formation of a company's superbrand in a person - a sense of trust, reliability and ownership of its affairs. Achieving a superbrand is only possible through the right match between the corporate image and the values of the audience.
The reputation of the company is aimed primarily at consumers and reflects the company's desire to make them loyal to the company itself and its products. The high reputation of the company serves as a guarantee for the consumer of the quality of the products sold and (or) the services provided. According to consumer opinion surveys, 62% of consumers believe that a company with a good reputation will not sell products of inadequate quality. The confidence of members of the public that a company with a positive reputation will not sell a product of inadequate quality will be reflected in an increase in the speed and volume of sales of goods.
Since the company is aimed at self-development and adaptation to the conditions of work in the market of products and services, there is a natural circuit in the model. Practice shows that the most efficient companies characterized by an adaptive organizational culture.
If for the analysis and characterization of the corporate image we used such concepts as: recognition, trust, consumer orientation, quality of management, emotionality, sensuality, innovation, then to describe reputation, we should use characteristics based on a system of values - honesty, ethics, decency, respect, authenticity, responsibility, high self-esteem, etc.
Reputation is a strong opinion about the qualities and merits of an organization in the business world (in a certain market segment). The most important components of reputation are:
- having a strong organizational culture;
- the company's reputation in the market as a combination of financial capabilities and long-term leadership in product quality;
– innovativeness of the strategy;
– presence not only in the domestic, but also in international markets;
- Social responsibility;
- decency;
- law-abiding.
The resulting characteristics of a stable positive reputation - a superbrand - are: reliability, trust, support, positive recommendations.
It is necessary to distinguish between such concepts as "reputation" and "business reputation of the company". The business reputation of a company operating in the conditions of information (post-industrial) business development is its main intangible asset, which has a significant value and is formed at the expense of such company assets as reputation, image and financial stability of the company.
Under current law, a company's goodwill is the difference between the purchase price of the business and the book value of assets, less the amount of liabilities. If the company's shares are listed on the stock exchange, the damage to reputation will be measured by the depreciation of the share price as a result of a decrease in the confidence of shareholders and potential investors in the company.
Goodwill should be assessed by experts, and its assessment may be based on the following components:
– ethics in relations with external partners – fulfillment of obligations, responsibility, credit history, decency, openness;
– ethics in relations with internal partners (corporate governance) – responsibility of managers to shareholders, majority shareholders to minority shareholders, financial transparency of the business;
– management efficiency – profitability, turnover increase, market expansion, innovations;
– quality of products, services;
- the reputation of top managers.
Over the past 15 years, the share of business reputation in the total value of Western companies has increased from 18% to 82%. An increase in the business reputation index of a firm by 1% gives an increase in its market value by 3%. The value of an enterprise's business reputation increases if it stimulates consumer confidence in its products.
Thus, reputation is that intangible legally unidentifiable asset that is difficult to value in terms of value, but which causes additional substantial income and other economic benefits.
In this regard, the question arises about the formation, maintenance and protection of the company's reputation, i.e. on the development of a system of reputation management measures.
Maintaining effective and ongoing public relations is one of the key points corporate reputation management. The formation of a company's reputation is greatly facilitated by its publicity.
Publicity (English "publicity" - publicity, openness) is a wide positive fame and recognition of the company, its personnel and activities. Publicity is formed with the wide use of the media and represents the external fame of the enterprise. To create publicity, modern companies carry out the following activities, which are subsequently widely covered in the media and strengthen their reputation:
holding promotions designed for the target audience;
participation in exhibitions;
creation of professional associations.
Other external methods of managing a company's reputation include:
– formation of expectations of business partners and building relationships with them;
– building relationships with suppliers based on trust and mutual respect;
- Creation of an "institution of trust" among consumers.
Within the organization, reputation management should be carried out in the following areas:
– development of the mission and philosophy of the company;
– creation and implementation of a corporate code of conduct;
– formation of the image of the first persons and top management of the company;
– development of a position of social responsibility of the company;
– development of the company management system from the standpoint of "human capital", careful attitude to employees.