A teams reputation in the editor determines their season expectations. It doesn't really make sense.
The reputation number can be found on the Details section of each team and is rated out of 10,000.
And for example, Juventus' reputation is about 8750. Changing Bologna's reputation to 9100, will result in the season expectations being to (at least) challenge for the title, regardless of transfer budget or finances.
Hope this helps!
-Also, reputation also greatly determines a clubs ability to attract players, and determines the level of players that appear on the Search List when looking for them.