Managing company reputation during layoffs

Abstract

The role of reputation in a company's everyday business has only been recognized in the literature in recent decades. Reputation influences how willing stakeholders are to cooperate with the company, and how they react to its actions. Achieving and maintaining desired reputation is based on the company’s ability to fulfil stakeholder expectations. These expectations are created by the company’s brand, the values and norms of its stakeholders, and external laws and regulations. Layoffs pose a threat to company reputation, as the announcement alone can disappoint stakeholders. Previous literature has identified meeting stakeholder expectations as the foundation of company reputation, which becomes particularly challenging during the layoffs process. The goal of this thesis was to identify different approaches companies can use to manage their reputation in layoff situations. To explore this, a review of reputation and brand literature was utilized. The main finding was the identification of three approaches to reputation management: (1) the company strives to support its laid-off and remaining employees, (2) the company strives to support its laid-off employees and (3) the company does not strive to support its employees. The conclusions made were observed empirically through multiple case study with three layoff cases. Empirical analysis validated the division made and supported existing theory but also questioned prior knowledge on reputation formation and management. The findings and conclusions attained in this thesis provide additional information and perspectives to reputation management in layoff situations. These findings can be useful for theory building and corporate decision-making. The phenomenon was examined from a high technology perspective and through a small sample, so the results are not broadly generalizable.