INVESTIGATING THE SIGNIFICANCE OF REPUTATION MANAGEMENT IN REAL ESTATE BUSINESS DURING AN ECONOMIC CRISIS
Investigating the Significance of Reputation Management in Real Estate Business during an Economic Crisis
Introduction
Real estate business involves the financing, leasing and buying and selling real estate. During the 2007-2008 Global Financial Crisis, real estate business was among the worst hit business sectors. Given that it involves huge investments, investors had taken bad loans, which are one of the reasons why the crisis occurred in the first place (Real Estate Agent, 2014). However, despite the fact that the crisis had adverse effects on various business sectors, other sectors emerged stronger than ever. Studies have attributed this emergence to reputational management present in the sectors. Among the business sectors which stood out after the crisis was real estate business. Reputational management refers to the sum of all images that a firm portrays. In other words, Sikula and others (2011) suggest that reputational management involves communication plus behavior plus performance. In other words, it evidently seems to be a vital ingredient to a firm’s success and productivity (Doorley, 2011). It is, therefore, significant to examine and explore the significance of reputational management in real estate business in times of a financial crisis to determine whether it could be extrapolated to other business sectors.
Purpose of the research
The main purpose of the study is to investigate the significance of reputational management in real estate business at a time of economic crisis. To achieve this aim, the researcher also seeks to accomplish other specific objectives. These objectives include:
Research Questions
How is reputation managed and measured in real estate firms?
How do firms incorporate and implement reputational management in their daily operations and activities?
What role does reputational management play in a firm’s operation and corresponding performance?
What are the effects or outcome of incorporating reputational management in a firm's operations?
Can the results of this finding be extrapolated to other industries? If so, how?
Literature Review
There is a limited amount of studies conducted on reputational management. However, from the few available materials on the topic, detailed and rich information can be accessed. Notably, the causes and effects f the global economic crisis that occurred from 2007 are complex and too many. Massive greed from investors, business leaders as well as consumers characterized the crisis. It came out that a major cause of the crisis was a collaboration of real estate businesses and banks who came together to facilitate property transactions to clients who had much anticipation that the property’s value would rise. Therefore, with the profligate lending and bad spending, the value of property leveled off and then suddenly fell.
According to a 2008 Reputation Quotient Report in the USA, while the tobacco industry enjoyed a huge reputation, industries such as banks and real estate had a little public support. Just before the collapse, firms continued to increase executive compensation. On the other hand, people continued to lose their jobs and money. However, businesses remained unaware of the public sentiments implying that firms experienced what is referred to as behavioral failure (Sikula, et al. 2011). They had no place for public voice thus, doing things blindly to profit their greedy bellies. Apart from performance behavior, another crucial aspect of reputational management is communication behavior.
Notably, given that most firms lost reputation during the global crisis, the connection with consumers got lost. For instance, it was hard for industries such as pharmaceuticals to convince their key stakeholders that the sector supports reform because it is good for society and not necessarily because it will attract new customers (Arneel, 2011). Firms portrayed negatively in the popular press are adversely affected regarding liquidity, funding levels and access to stock valuation. According to Helm and other, (2011), a reputation is an integration of al views that all stakeholders have about a firm. The firm’s leadership should be cheerful if all these views are portrayed in the one image that the firm has (Doorley, 2011). Apart from communication and behavioral failures as results of lack of reputational management, identity failure is also another consequence. For instance, when banks lend loans with the property as collateral under the viewpoint that it will appreciate, they are forced to sell these bad loans to other banks.
This frees the original lender from any form of vulnerability, but only for a moment. When this unscrupulous business practice becomes more lucrative, consumers are forced to buy the illusion that they have the ability to stay in a house that they cannot afford. In essence, the available literature talks more of the adverse effects of lack of reputational management without taking into account its significance, the role it plays and how it is done. As noted earlier, it is significant to assess the significance of reputational management in real estate business, especially during an economic crisis. The research, therefore, will serve as a pioneering study into filling the gaps that are present in prior literature.
Study Rationale
Methodology
Research Design
The study will adopt a descriptive framework (research design) to investigate the significance of reputational management in real estate business during a financial crisis. An explanatory design is specifically utilized when a researcher seeks to describe certain phenomena by studying and explicating its underlying factors (Kothari, 2001). The study will specifically be a qualitative research utilizing more of qualitative data. The qualitative approach is significant because it gives the researcher a chance to be interested only in gaining a detailed and rich understanding of individual's experiences.
Research Strategy and Data Collection
The research falls within the widely used form of data collection method known as desk-based research. The method entails data retrieval through gaining access to information already collected and stored. Sarah & George (2005) note that desk-based research primarily depends on the third party information availability from journals, reports, websites and newspaper articles among others. Questionnaires and WhatsApp surveys will as well be used.
The desk-based research provides a major advantage over other research methods concerning ease of information access. The information on different research topics is easily accessible from journals, newspapers and diverse online platforms that have facilitated an easy access to a vast amount of research literature. The re-analysis of previous literature and statistics in desk-based research is instrumental in making new discoveries that further contribute to the growth of the research fraternity.
The researcher will access information from news articles, journals, online databases, and insights from previous studies on the same topic. To ensure validity, reliability and credibility of the information, the researcher will make sure that sources are less than nine years old and those they are legitimate and authoritative in their analysis of the global financial crisis.
Data Analysis and Expected Outcomes
Inferential statistics will be used in the data analysis process. Notably, most of the data collected will be qualitative in nature. Data analysis will involve the correlation of the qualitative information in tabular form and draw conclusions from the data. The data retrieved in this study is less quantitative, and therefore, there will be no need for statistical analysis. The conclusions will be used to test the hypothesis. It is expected that the researcher will be successful in assessing the significance of reputational management in real estate during a financial crisis and that the results of the study will be useful in understanding the underlying causes of the financial crisis.
Ethical Considerations
The researcher, before carrying on the study, will seek approval from the rightful authorities about the conduct of the study. Any humans involved in the study will be treated with utmost respect to their rights. The researcher will not harm any of the research participants whether emotionally or physically. Furthermore, before accessing proprietary information and data about real-world companies, the researcher will seek their consent and approval. The information retrieved will be used primarily for the study. The researcher will not disclose the information to any authorized third parties without the firms' approval. Furthermore, the researcher will acknowledge information from other sources by citing them in the final document.
Bibliography
Arneel, K., 2011. Doing Well By Doing Good: The Grand Illusion. California Management Review (Winter 2011) 53: 69-71.
Doorley, J., 2011. Reputation Management: The Key to Successful Public Relations and Corporate Communication, 2nd Ed. London: Routledge
Helm, S., et al. 2011. Reputation Management. New York: Springer.
Kothari, C.R., 2001. Research Methodology, New Delhi: Wishaw Prakashan
Real Estate Agent, 2014. Reputation Management Guide for Real Estate Agents. [Online]. Available at http://realestateagentu.com/reputation-management-guide-real-estate-agents/. [Accessed 22nd Nov 2015].
Sarah, J. A. & George, N., 2005. Research Methodology: An Introduction. New York: New McGraw-Hill
Sikula, A., et al., 2001. A “New” Theory of Management’, Ethics & Behaviour, Vol. 11(1), p. 3-21.
Appendix
Appendices
Questionnaire
How reputation management supports the real estate business in an economy crisis?
Dissertation
BA Public Relations
2016
Kindly take utmost 20 minutes to complete the questionnaire.
How do you find a house to rent?
Word-of-mouth (buzzgood reputation)
Online (search tools)
Flyers
Is it possible to use reputation to find the best neighborhood?
How do you define reputation?
Are you aware of the practice of reputation management?
Do you think online reviews affect the possibility to rent houses?
Does the practice of online reputation help corporate reputation in real estate business?
Do you believe Real estate reputation is based on the company history or in the agents’ performance?
How can real estate agents and investors build a good reputation?
Real estate agents are successful because of the company reputation or their performance?
Do you think the Real estate websites search tools lack of privacy can result in economy crisis?
Do you think any country economy crisis affect real estate businesses? And how?
Can you mention three possible reasons for an economy crisis in real estate?
Choose the most common economy crisis in Real Estate.
Low demand
Difficulty in acquiring loans
Difficulty in obtaining construction financing
Late loans due date
Mortgage losses
Suggest corporate reputations actions for the problems above
WhatsApp survey
