The Vulnerability of the Company’s Business Reputation in the Current Competitive Environment

Abstract:

The article deals with the economic nature of the vulnerability of the company’s business reputation in the current competitive environment. Any business in a competitive economy is potentially vulnerable, the activity of an organization might be undermined by both internal and external factors, therefore, the subject of the research is relevant. To clarify the essence of the vulnerability of the company’s business reputation, the author identifies the causes, which increase vulnerability in the modern economy. I have proved a point that the vulnerability of company’s business reputation may occur as its inadequate positioning in the relevant marketplace as well as in the case of troubled relationships with business rivals, partners, suppliers, consumers, authorities, mass media, etc. I propose the definition for the categories of the reputation of an organization and the vulnerability of the company’s business reputation. I have put forward and supported the proposition that any organization always potentially has reputational risks. In this regard, continuous monitoring of the reputation’s vulnerability and proactive activities aimed at its decline are very important. The technology of «competitive early warning» helps to identify the external factors, which may have reputational risks. Among the prerequisites reducing the vulnerability of company’s business reputation, the following ones are important: focus on the preservation of the existing and creation of new competitive advantages; development of business cooperation with both partners and competitors; reasonable business transparency; development and compliance with the corporate code of an organization; the use of proactive methods of identification, evaluation and minimization of reputational risks. The main findings and suggestions will be useful for more profound study of the vulnerability of company’s business reputation, the identification of the reasons for the vulnerability as well as for the management of a company as the conclusions might be included in the strategic projects for the business development.