Destruction and Reconstruction of Corporate Reputation in the International Business Network Context

The purpose of this study is to illustrate how a firm’s corporate reputation can be destroyed by the actions of business partners and other network actors, and what the company can do to reconstruct its reputation. The study case exemplifies the importance of reputation and close interactions with foreign business partners in developing countries. Secondary data of a Nordic-based MNC, Stora Enso, is collected, interpreted, and analyzed. We observed issues surrounding the reputation change of the MNC, while focusing on the actions of their business partners. The paper provides empirical insights into the process of reputation destruction and its reconstruction process, caused by critical events related to a child labor incident in Pakistan. The study shows that a firm’s reputation is strongly influenced by carefully selecting business partners at the outset of international investment. The case also shows that interactions with business partners are crucial for successful reputation reconstruction