Reputation and Organizational Efficiency: A Data Envelopment Analysis Study Carl Brønn The Norwegian University of Life Sciences, Norway Peggy Simcic Brønn The Norwegian School of Management, Norway ABSTRACT In the spirit of the resource-based view, resources can be treated as ‘stocks’ that are used by the firm in its activities. Managerial actions influence, both directly and indirectly, the quantities of the resource stock by ‘filling’ or ‘emptying’ them. Consequently, it is important for the organization to have a measure of the state of the resource stock, as well as an under- standing of how different actions affect their level. In this sense, for any managerial mea- sure to be useful, it should be operation- oriented and not simply an indicator of past performance. In this paper, the Data Envelop- ment Analysis (DEA) methodology is proposed as a way to view reputation from another angle — from inside the organization. The approach is described by means of an example based on data similar to that employed in the reputation quotient (RQ). The implications for applying it to the six attributes that define the RQ are discussed. The authors believe the results of a DEA investigation can lead to an assessment of the internal operational aspects of reputation and thereby can assist practicing managers to better utilize this strategic resource. KEYWORDS: Reputation, DEA, organiza- tional efficiency, intangible resources, measure- ment INTRODUCTION ‘The first step is to measure whatever can be easily measured. This is OK as far as it goes. The second step is to disregard that which can’t easily be measured or give it an arbitrary quantitative value. This is artificial and misleading. The third step is to presume that what can’t be measured easily really isn’t important. This is blindness. The fourth step is to say that what can’t be easily measured really doesn’t exist. This is suicide.’ (Yankelovich, 1972) Reputation is both a complex and increas- ingly relevant construct upon which man- agers and academics are focusing their attention. The Reputation Institute (RI), through its work, has identified 20 indica- tors that are used as the basis for their repu- tation quotient (RQ). This is an important measure that ranks organizations based on respondents’ perceptions of six attributes, which are based on these indicators. In this paper, an approach is proposed that builds on the work of the RI. By means of an example and accessible data similar to the RQ methods and attributes, the authors introduce a quantitative methodology called Data Envelopment Analysis (DEA) that enables computation of a multidimen- sional efficiency measure derived from organizations’ actual performance on sev- eral attributes to compare their relative performance. As the selected dimensions chosen here mirror the RQ attributes, it is reasonable to hypothesize that the resulting Corporate Reputation Review Volume 8 Number 1 Page 45 Corporate Reputation Review, Vol. 8, No. 1, 2005, pp. 45–58 # Henry Stewart Publications, 1363–3589