The theoretical model

The model is the map of how opinions form. Macro issues, trends, events and channels shape what people believe about a firm. Beliefs form the firm's reputation and the value people see in what it offers. Those evaluations drive what people do: buy, apply, recommend. Without the map, a number moves and nobody knows which link moved it. With the map, every measurement has a place and a route to behaviour.

The blocks

Inputs. Macro issues are the firm-related themes of the period; macro concerns are the wider worries people carry about the economy and society; social events are the things that happen to or around the firm; social channels are the ways people come into contact with it, from advertising and news to colleagues and social media.

Beliefs. What people hold to be true about the firm: its expertise, its ethics, whether it can be trusted, how well it is managed, the quality and value of what it offers. Beliefs are formed daily and are the layer through which every input reaches the evaluations. They have direct effects on the outcomes and also carry the indirect effects of the inputs.

Evaluations. Reputation, separated into character and capability, and the value people see in the firm's products and in working for it.

Outcomes. Purchase intention, intention to work for the firm, intention to influence others, and the broader measures of sentiment and overall reputation.

The theory behind it

Social exchange theory (Blau, 1964; Cropanzano & Mitchell, 2005) holds that a relationship between a person and an organisation continues as long as each side expects to get back at least what it puts in; reputation and value are the person's running estimate of that balance. Network theory (Granovetter, 1973, 1985) holds that these estimates are not formed alone but travel through the contacts a person has, which is why channels sit in the model as causes in their own right and why a change among one stakeholder group can reach another. Stakeholder theory (Freeman, 1984; Mitchell, Agle & Wood, 1997) supplies the groups the model is estimated for.

The separation of character from capability follows the reputation literature (Rindova et al., 2005; Lange, Lee & Dai, 2011; Mishina, Block & Mannor, 2012): the two move on different information and at different speeds, and the dashboard shows them separately because a firm in trouble needs to know which one has been hit.

Since when

The model was developed with researchers at VU Amsterdam and has been in daily use since 2022. The causal engine that estimates it every evening runs for clients today. How it is estimated is described under Method.