Trust and reputation in the age of globalisation

Abstract

It will be shown in this paper that the reputation of all agents in our society invariably consists of three components. Firstly, their own competence and associated successes must be continuously demonstrated (functional reputation). Secondly, agents must adhere to social norms and values in a responsible way (social reputation). And thirdly, every agent relies on an emotionally attractive profile to separate him sharply from his competitors (expressive reputation). On the basis of this three-dimensional reputation approach, it is examined how the logic of reputation constitution has changed in the age of globalisation. Among other things, it becomes evident that the greatest reputation risks lurk in the sector of social reputation. In today's global communications society, significantly more attention is generated by denouncing moral misconduct than by honouring socially responsible behaviour. In particular, companies that boast in their external communications of having a clean vest carry a high risk of falling into the moral trap. One of the rules of successful reputation management described in this paper is consequently: credible social commitment builds on actions and not on words. This rule applies all the more strongly at times like the current crisis of the financial markets. The concluding focus of this paper is directed to this crisis and its consequences for the reputation dynamics in the economy and society. © 2009 Springer-Verlag Berlin Heidelberg.