Rankings both shape and reflect university standings, and in a sector where institutions continue to shy away from true distinctiveness and focus, they will act as invaluable proxies in the long term, argues Louise Simpson

Just as every generation thinks it invented sex, today's scholars, chief executives and PR professionals argue that they are the first to really understand reputation and advance the idea of the "brand". Yet Socrates shows that the concept of reputation - or one's good name - is as old as civilisation itself, even though it seems harder to define than to understand.

Brand and reputation are commonly mixed up, of course. "Reputation" comes from the Latin reputare, "to think over", while "brand" comes from the Norwegian brandr, "to burn". Stone seals were burned on bricks and pots in early civilisations to indicate quality, but also to show who was to blame if the product was faulty. So right from their earliest use, brand was the producer's stamp (controlling one's wares) and reputation was the public's perception of those wares - different, but related.

Reputation management is the art of trying to get brand and reputation to converge: that is, to create a product that has a distinctive look and feel, which is recognised and appreciated by the consumer in the way that the producer wants it to be. If you get it right, there is money to be made.

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Studies show that there is a strong correlation between value and reputation among companies listed in Fortune magazine's top 200. The Turnbull Report, the guidance issued to listed companies on the London Stock Exchange, regards the monitoring of companies' reputations to be as important as assessing financial risk. A good reputation is even more important for universities because their "product" is so expensive and time-consuming, and because (unlike, say, chocolate or beer) it cannot be sampled before purchase by the consumer: it is high cost, high value and intangible.

The higher your reputation, the more likely you are as an institution to attract funding and partners of choice. Prestigious donors like to give to prestigious universities. Research led by Charles Fombrun and published in the book Reputation: Realizing Value from the Corporate Image (1996) showed that a better reputation allows an organisation to win contracts on more favourable terms and, of course, to charge more.

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University rankings are relatively new in terms of amplifying reputation, emerging first as national lists that were then joined by international tables of specific academic and institutional achievement. To some extent, the rankings evolved as a way of verifying whether the reputations that universities enjoyed were to be trusted - an audit of reputation itself, in a sense.

Universities, particularly those at the top of the tables, feel uneasy about them because there is only one way to go. And those at the bottom, or not present at all, do not like them for obvious reasons. But despite the grumbling, universities quote them and use them and therefore make them more credible to the public.

My own research has shown that most universities have strategies to rise up the rankings. Although the majority of academics are still inclined to dismiss them as distortions of reality, university managers increasingly use them because they know that the outside world values them, which therefore yields tangible benefits (for example, better students, research partners and donations). Their importance was aptly illustrated when The New York Times reported in 2007 that Michael Crow, president of Arizona State University, had been incentivised by a $10,000 bonus to shepherd his institution up the domestic rankings.

Studies also show that university rankings are an important factor in student decision-making. And as study becomes increasingly expensive (a UK university education is likely to cost from ???50,000 to ???80,000 from this year onwards as a result of higher tuition fees), they are likely to become even more influential.

Research by Minjung Sung, an associate professor in the department of advertising and public relations at Chung-Ang University in the Republic of Korea, and Sung-Un Yang, a public relations expert from Syracuse University in the US, has found that the greater a university's external prestige, the greater its students' commitment to and identification with it and the better their measured "supportive behavioural intentions".

This is perhaps not surprising, but what is revelatory is their finding that external prestige (defined in the study as rankings, positive media reports and endorsements) is four times more influential in encouraging supportive attitudes than student satisfaction. So the reputation of the universities on graduates' CVs will be more beneficial than alumni's own experiences. This all feels rather Orwellian: what you think of the university is more important than what I know about it.

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But rankings aren't the same as reputations, are they? Shanghai Jiao Tong University's Academic Ranking of World Universities does not attempt to measure reputation at all. The Times Higher Education World University Rankings give a 33 per cent weighting to the findings of a reputation survey (revealed in isolation in the World Reputation Rankings) - but it polls academics rather than the general public. And 25 per cent of the US News & World Report rankings' overall scores depend on the opinions of college presidents.

But if university rankings are not based on reputational assessments in the vox populi sense, do they influence public reputation and thereby become proxies for reputation?

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It appears that they both form and reflect reputation, and thus are both formative and summative indicators. If a university goes up the rankings, it can choose better students, which in turn allows it (possibly) to continue its ascent. A 1999 study by James Monks and Ronald Ehrenberg showed that a one-unit increase in US News & World Report standings corresponded to a 0.4 per cent decrease in acceptance rates (students have less chance of getting in), a 0.2 per cent increase in yield (more applicants) and a 2.8 per cent increase in average entry scores (student quality). A 2004 study by Marc Meredith of Stanford University's Graduate School of Business also showed that higher rankings led to greater selectivity.

Rankings have a halo effect: rising up the league tables becomes a metaphor for the positive attributes of the university brand more widely. Students and parents are attracted to big names in higher education, and rankings play a part in establishing brand hierarchies.

Domestic rankings in the UK appear to be used by high-achieving candidates. Research in 2007 by The Knowledge Partnership showed that those who use league tables are likely to be high-income students and high achievers.

Rankings are also attractive in a world where, let's face it, universities are, in marketing terms, pretty indistinguishable when compared within mission groups. Managers are still reluctant to exercise the strategic leadership needed to manage reputation and thus invest in what makes their institutions distinctive. University marketing departments have much less influence than their counterparts in the commercial sector, although this is changing in the UK academy as it apes the US. American universities have more empowered corporate affairs vice-presidents who tend to sit on senior management teams, although in Europe this remains rare.

Improving reputation is also a leadership function: decisions need to be made that lead to the alignment of what the university is good at and what the public values most. This is never easy nor quick - too much focus on visual branding and logos probably reflects a desire to be seen to be doing something, because universities find real change, integrated PR and academic prioritisation much harder than rolling out new branding.

So while universities shy away from distinctiveness - with too many holding on to the notion of the comprehensive institution - rankings are likely to continue to be proxies for university reputation in the longer term.

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Louise Simpson is director of the World 100 Reputation Network and The Knowledge Partnership, a higher education strategy consultancy. She has just completed an MPhil at Manchester Business School on reputation in higher education and the impact of international rankings on reputation in higher education.