We draw on a detailed grounded theory study of the reactions of Dutch food firms to the recent introduction of genetically modified foods to inductively identify the capabilities that firms develop in response to reputational threats. Central to the view on capabilities we propose are the decision rules organizations use to link individual actions to organizational outcomes. Four reputation management capabilities were identified, which were aimed at, respectively, (1) engaging in a cooperative dialogue with relevant stakeholders, (2) presenting the organizational point of view favorably in the eyes of external beholders, (3) avoiding organizational "ownership" of critical reputational threats, and (4) communicating meaningfully with affected parties, even under conditions of high adversity and time-pressure.
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