ABSTRACT

Studies focusing on difficult-to-measure variables, such as corporate reputation (Fombrun, 1996; Fombrun & Shanley, 1990), corporate social responsibility (Conine & Madden, 1986; McGuire, Sundgren & Schneeweis, 1988), and stakeholder orientation (Chakravarthy, 1986; Preston & Sapienza, 1990) have looked predominantly to the Fortune Reputation Index (FRI) as a solution for operationalizing their variables. Although the Fortune Reputation Index has been widely regarded as a haven for here-to-for illusive variables, a study conducted by Fryxell & Wang (1994) provides evidence that questions the use of the Fortune index, citing the index's close dependence on financial performance measures. However, a study by Lee & Hall (2008) has reestablished the confidence in the Fortune Reputation Index as a measure of corporate reputation and social responsibility. The present study seeks to assess the effects of corporate reputation on firm performance utilizing an international data set that includes firms from the United States and Japan. Results reveal a significant and positive relationship between firm performance and corporate reputation.

Keywords: International Management, Corporate Reputation, Diversification and Performance