The Impact of CEO Reputation: Negative News and Economic Decisions

Abstract

In this true experiment the impact of a negative news story about a CEO is measured on the purchasing decisions and potential employment decisions of a college-age demographic. The age group tested is the #1 purchaser of the stimulus product, an MP3 player; additionally, these primarily juniors and seniors are interested in future employment and job searching issues. Findings support that CEO reputation is of critical importance to economic decisions among the age cohort. Negative news has profoundly adverse effect, while positive news, while pleasant to read, has a negligible impact. Public relations implications for managing a CEO's reputation are discussed.