Have you ever dated someone who you thought was a great catch, and then all of your friends and family members told you that they didn't like him or her? Even if you thought this person was the one, you started to have doubts and reservations about them. The same is true in the business world. If you start working for an organization that you believe to be a good fit and then hear about how much people don't like the company, you will start having doubts. This doesn't necessarily mean you will quit the company, but your overall employee experience will be affected negatively.
I'm sure you can think of several examples of organizations that have treated animals cruelly, represented unethical business practices, harmed employees or the environment, or treated customers unfairly. Keep in mind that this isn't just about employees viewing the company positively, but the public as well. We live in a very open and transparent world, so when an organization does something wrong or unethical, people tend to find out. Similarly, when an origination is admired and revered, people wanted to work there. The most recent Fortune list of the world's most admired companies includes Apple, Amazon, Disney, Starbucks, and Southwest Airlines, which shouldn't be a surprise to anyone because these companies have such great reputations.
Sometimes organizations aren't viewed positively because they are simply engaging in poor business practices, but other times organizations don't do a good enough job of letting the world know what they stand for, why they do what they do, and what it's like to work there. In either case the situation needs to be corrected.