Corporate reputation, trait covariation and the averaging principle ‐ The case of the UK pensions mis‐selling scandal

Abstract

Presents the results of an empirical investigation into whether the attribution by members of the public of an unfavourable reputational trait (e.g. dishonesty) to a company covaries with other traits ascribed to the same enterprise. Additionally it examines whether people aggregate successive pieces of unfavourable information received about a business to form a continuously worsening impression of it; or whether they mentally average bad news, so that successive adverse items can actually improve the overall impression – provided the later messages are not as damaging as the earlier ones. The study is based on the UK pensions mis‐selling scandal, which generated severe, long‐term media criticism of the large UK insurance companies. Hence it analyses a unique reputational management situation in that the firms involved are subject to continuous and intense scrutiny, protracted and hostile media coverage, periodic public censure by regulatory authorities, and interference in day‐to‐day management by government agencies. The proposition that pensions are an “avoidance product” is also explored.

Citation

Bennett, R. and Gabriel, H. (2001), "Corporate reputation, trait covariation and the averaging principle ‐ The case of the UK pensions mis‐selling scandal", European Journal of Marketing, Vol. 35 No. 3/4, pp. 387-413. https://doi.org/10.1108/03090560110382084