Business interaction between managers, employees, institution encirclement and other institution stakeholders results in creating organizational identity. Organizational identity has a significant impact on different types of organizational behaviours, and thus on the institution's functioning, as well as on achieving institutional goals as a whole. Organizational identity is a strategically planned and operational self - presentation of a company, based on long term company goals, combined with the desire to use all the instruments of the company as one unit achieved by means of behaviour and communication. Employee perception toward the workplace has significant impact on institutional reputation and is a part of the features of the institution and also includes emotional reactions and stakeholders’ knowledge about the institution's identity. It is indisputable to articulate these concepts as key factors in the success of institutions in competitive markets, respectively their importance as intangible assets that provide companies with competitive precedence on the market. The aim of the paper is to examine conceptual and strategic relations between organizational identity and organization's reputation perception on the example of the higher education institutions in the Republic of Croatia. The paper also discusses possible directions for further research in this relevant and interesting field of research.