The Effect of Layoffs on Firm Reputation

David J. Flanagan · K. C. O’Shaughnessy

241 citations0/0 files storedJournal of Management

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Corporate Identity and Reputation Public Relations and Crisis Communication Organizational Downsizing and Restructuring

Abstract

A firm’s reputation is perhaps one of its most important strategic resources. Using data from Fortune’s America’s Most Admired Companies survey, this article examines how layoffs affect the reputations of firms. The authors found that layoffs have a negative impact on a firm’s reputation and that this relationship is significantly stronger for newer firms than older firms. Limited support is found for the hypothesis that larger firms’ reputations will be buffered from the adverse effects of a layoff on their reputations. Implications of this research and future research questions are discussed.

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References

1991Firm Resources and Sustained Competitive Advantage 2004Firm resources and sustained competitive advantage 1984A resource‐based view of the firm 1995The Theory of the Growth of the Firm 1985An attributional theory of achievement motivation and emotion.1990WHAT'S IN A NAME? REPUTATION BUILDING AND CORPORATE STRATEGY.2004Social Structure and Organizations 1 1967Attribution theory in social psychology

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2019Which of These Things Are Not Like the Others? Comparing the Rational, Emotional, and Moral Aspects of Reputation, Status, Celebrity, and Stigma 2014Company reputation and the cost of equity capital 2014The moderating influences on the relationship of corporate reputation with its antecedents and consequences: A meta-analytic review 2007Reputation as a moderator of political behavior-work outcomes relationships: A two-study investigation with convergent results.2010Family Management, Family Ownership, and Downsizing: Evidence From S&P 500 Firms

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