Neuroscience

Neuroscience is an interdisciplinary field of study that aims to understand the human mind. More specifically, neuroscientists study the human nervous system to learn how the brain makes a mind. The goals of neuroscience are to study how people perceive the world around them and how they remember and act based on these perceptions and to understand the biological foundations of emotional life. Neuroscientists seek answers to questions concerning how we learn and remember, the nature and existence of human emotions, and how and why the nervous system becomes damaged. The neuroscientific approach has begun to be used in several areas of social research, such as in communication and organizational studies. However, studies on the theoretical, conceptual, and empirical connections between contemporary neuroscience and reputation studies are scarce. This entry sheds light on these connections and discusses how corporate reputation studies can benefit from neuroscientific methodologies and findings.

The history of the study of the human nervous system can be traced back to ancient times; however, modern neuroscience is quite a young discipline. Breakthroughs in scientific research technologies, such as brain-imaging and computational modeling and analysis software, have greatly promoted neuroscience in the past few decades.

Neuroscience can be divided into several subfields, including molecular, medical, and cognitive neuroscience—the last being the most relevant in the context of reputation studies. Cognitive neuroscience explores the connections between the functions of the brain and human behavior. Social cognitive neuroscience, which examines social phenomena with theories from social science and cognitive neuroscience methodological tools, is a particularly significant contemporary branch.

Because of its multidisciplinary nature, scholars applying neuroscience come from different backgrounds, including the social sciences, psychology, social psychology, and medicine. In the context of corporate reputation studies, neuroscience remains unexplored territory, though some studies have enlisted methodological toolboxes from the area of cognitive neuroscience.

New Branches of Neuroscience

Traditional neuroscience has its roots in biology but has begun to reach different fields of study, including psychology, social psychology, economics, marketing, and brand studies. These new branches are sometimes referred to as neuroeconomics, neuromarketing, and neuropsychology, to name a few.

Neuroeconomics combines neuroscience, economics, and psychology. Researchers in this field are interested in explaining human behavior in the context of financial markets, consumption, loss aversion, and other types of economic behaviors. Neuroeconomics seeks a deeper understanding of how humans make decisions by examining what happens in the human brain when individuals make choices among options and calculate risks, costs, and profits.

In neuromarketing, the interest is focused on consumers’ cognitive and affective responses to marketing-related stimuli. For example, researchers have highlighted the role of emotions in brand evaluations using brain-imaging studies. Not surprisingly, neuromarketing innovations in science have spread to the business sector, where firms are looking for more effective ways to market products and services. In their seminal work, Samuel McClure and colleagues studied how cultural messages, especially related to brands, combine with content to shape human perceptions. The team conducted a famous experiment where they utilized functional magnetic resonance imaging to study how humans’ behavioral preferences differed with regard to Pepsi and Coca-Cola. The study revealed how the brand had a dramatic influence on expressed behavioral preferences as well as on the measured brain responses.

In neuropsychology, the focus is on the relation between the brain and human cognitive, emotional, and behavioral functions. In neuropsychological studies, physiological signals are used to explore psychological phenomena. It is assumed that by measuring bodily reactions, we can deduce something about the human mind: emotions, attentiveness, motion and desires, attitudes, awareness, and conscious and unconscious information processing.

Advances in the neurosciences have also been reflected in organization studies. Researchers have coined the terms organizational neuroscience and organizational cognitive neuroscience to describe organization and neuroscience research and to foster potential collaboration between practitioners in the two fields. Both areas of study examine the specific social processes at the neurobiological level in organizational contexts and emphasize the importance of understanding the connections between the functions of the brain and organizational behaviors of organization members.

Reputation and Neuroscience

Corporate reputation is related to human cognition by definition. Although the phenomenon of corporate reputation has been given various meanings, and the terms reputation and corporate reputation have various definitions, it is widely agreed that reputation has to do with the aggregate views and judgments of the firms’ stakeholders, which are based on cognitive representations of companies. It is common to relate corporate reputation to the knowledge of a company’s true characteristics and the emotions toward the firm held by its stakeholders; thus, reputation reflects what stakeholders think and feel about a company. These representations can then be constructed on direct experiences with the firm or by mediated experiences, such as news or other information disseminated by the media.

In addition to viewing stakeholders’ emotions as rational evaluations and expectations of an organization, recent views focus on these emotions as an essential dominator of corporate reputation. Neuroscience offers an excellent framework for examining the combination of cognitive and emotional dimensions of reputation and the importance of reputation-based decision making in the context of reputation studies. This approach examines the neural mechanisms at work when individuals make decisions under the watchful eyes and evaluations of others; that is, it can reveal how and why people behave differently when they believe others are watching. In the context of corporate reputation, a firm’s past record, current observations, and future prospects are also linked. So in this respect, reputation has an important retrospective component that builds the link between neuroscience’s interest in human memory and how individuals mentally construct the firm’s past.

Examples of the Neuroscientific Approach in Reputation Studies

Although neuroscience has not been widely applied in reputation studies, a couple of experiments have been conducted. Studies that explore the connections between reputation and emotion build on the idea that emotional reactions affect the individual’s ability to make rapid decisions in uncertain situations. The somatic marker hypothesis proposed by neuroscientist Antonio Damasio suggests that mental processes are often affected by automatic, bioregulatory marker signals. In this regard, positive- and negative-reputation companies are automatically associated with specific emotions and feelings. Thus, it can be argued that bioregulatory signals affect subjective, repetition-induced beliefs, as well as cognitive and decision-making processes, and can therefore be studied using neurophysiological research methods and measurements.

In their explorative studies, the research team led by Pekka Aula examined participants’ emotional responses to good- and bad-reputation companies. Two neurophysiological experiments were conducted following the premise that emotions direct human cognition and that communication-related emotional experiences have a powerful influence on human behavior. Together with self-reporting, the researchers used three neurophysiological measurements: (1) electroencephalography, (2) facial electromyography, and (3) electrodermal activity.

The first study focused on psychophysiological responses during a reputation appraisal process of firms with good and bad reputations selected from a longitudinal reputation evaluation of Finnish publicly traded companies. Each subject evaluated the reputation of the firm separately. They were shown individual company names written in plain text in a randomized order and were asked to rate each company’s reputation. The neurophysiological signals were measured throughout the evaluation process. The experiment confirmed the notion of emotional appeal related to reputation in previous reputation studies. Positive-reputation companies elicited greater orbicularis periocular muscle activity, which is related to positive emotions. On the contrary, negative-reputation companies elicited greater corrugator supercilii muscle activity, which is related to negative emotions.

The second study examined the emotional, motivational, and evaluative responses to positively and negatively valenced messages in online news articles about companies with good or bad corporate reputations. The research design involved favorable or unfavorable news messages about firms with good or bad reputations, accompanied by positive or negative comments supposedly written by other readers. The findings showed that corporate reputation affects emotional and motivational processes and that the emotional tone of the messages and reader comments in online news affects reputation formation. For example, relative left-frontal electroencephalography activation (i.e., approach motivation) and electrodermal activity were higher for good-reputation than bad-reputation companies.

The studies concluded that neurophysiological measurements provide several advantages over traditional self-reported reputation measures. The self-reported data may be affected by the facility to respond in socially acceptable ways, whereas psychophysiology admits the study of unconscious processing. In addition, psychophysiological data can be collected continuously throughout the entire experimentation. Therefore, psychophysiological signals have good temporal accuracy and make it possible to distinguish the reactions elicited by a certain stimulus.

Criticisms and Limitations

Neuroscience has also been under heavy criticism for various reasons. For example, critics argue that studies in social cognitive neuroscience have been mainly explorative, concentrating on how different aspects of social cognition are linked to the different parts of the brain and how the activities of the different parts of the brain correlate with, for example, various behavioral tasks. Thus, critics argue that despite the vast research, the discipline lacks major theoretical breakthroughs.

Another issue is the question of sociality. Although the social nature of human action is important, neuroscience as a study of the brain operates mainly on the individual level. For example, neurophysiological measurements of emotions are taken from individuals, not groups.

In addition, one criticism is wrapped around the fact that neuroscientific experiments are largely conducted in laboratory settings and that the conditions in the laboratory can never imitate real life perfectly. Thus, the limitation is related to so-called reduced ecological validity—that is, that it is impossible to cover the rich environmental stimuli of the “real world.” For instance, real-life social phenomena exist within historical dimensions. Corporate reputation, for example, is a construct based on previous experiences with an organization. This time-based factor is very problematic to manipulate in controlled laboratory surroundings.

Conclusion

Neuroscience in corporate reputation studies is largely uncharted territory. So far, academics have been unable to build new theories about corporate reputation, and practitioners of reputation management are still waiting for big breakthroughs in neuroscience-guided reputation explorations that could be broadly applied in practice. However, the results are promising. Studying reputation-related cognition and emotions with the help of empirical neuroscience allows us to gain new knowledge of how corporate reputation affects individual decision making and how corporate reputations are actually constructed in the human mind. These studies could also help us understand the role of emotional responses in the formation of corporate reputation—be it good or bad. Recent developments in social cognitive neuroscience could be an especially promising answer to the growing interest in the emotional aspects of corporate reputation. Neuroscientific research tools could be more broadly applied to the study of the emotions and experiences evoked by a company and its products and services.