How is reputation threatened according to the text?

Reputation is fundamentally linked to how an organization is perceived by its stakeholders, including customers, partners, and the public. Negative external perceptions can arise from various factors such as poor customer service experiences, negative media coverage, or social media backlash. When an organization is viewed unfavorably, it can affect trust, brand loyalty, and overall market position. Thus, if external perceptions turn negative, it directly threatens the organization’s reputation, potentially leading to financial losses and diminished credibility.

In contrast, while increased internal costs, fluctuating market trends, and improvements in customer service can impact the overall functioning and profitability of an organization, they do not directly relate to reputation in the same clear and immediate way as negative perceptions do. Increased costs may affect profitability but do not inherently alter how the public views the organization. Similarly, market fluctuations might influence business strategy but are not directly tied to reputation. Improvements in customer service, while crucial for positive perceptions, do not threaten reputation; in fact, they are likely to enhance it.