Hostname: page-component-78c5997874-ndw9j Total loading time: 0 Render date: 2024-11-10T15:21:16.645Z Has data issue: false hasContentIssue false

Corporate reputation, social performance, and organizational variability in an emerging country perspective

Published online by Cambridge University Press:  12 August 2016

Koustab Ghosh*
Affiliation:
Indian Institute of Management (IIM) Rohtak, MD University Campus, Rohtak, Haryana, India
*
Corresponding author: koustab.g@gmail.com

Abstract

This study estimated and specified a model of corporate reputation, its social performance, and firm-level variables in the context of an emerging country. Corporate reputation is the overall estimation of a firm by its stakeholders expressed by the demonstrative behaviors to its customers, employees, investors, business partners, and general public. The social performance of the firm has been conceptualized in terms of its demonstrative responsible behavior toward community, environment, and employees. Organizational variability has been captured in this study through the representation of firms from various industries as the relationship between corporate reputation and firm’s social performance was contingent on the type of industry and expectation of industry-specific stakeholders relevant to the firm. Data were collected from 220 organizations representing 11 different industry verticals. The findings supported that corporate reputation is determined by the conjoint influence of a host of firm specific as well as its social performance factors. In addition, the reputational effect of firm’s social performance was found to vary both across and within sectors, according to the various types of social performance activities the firm was engaged in. This study demonstrated the comprehensive measures of the firm’s reputation, social performance, and the associative relationship between them conditioned by firm-specific attributes and nature of the industry. The study has far reaching implications in terms of managing the firm’s boundary spanning activities and relationships in the perspective of emerging markets.

Type
Research Article
Copyright
Copyright © Cambridge University Press and Australian and New Zealand Academy of Management 2016 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Acharya, V. V., & Subramanian, K. V. (2007). Bankruptcy codes and innovation. Review Of Financial Studies, 22(12), 49494988.Google Scholar
Adams, M., & Hardwick, P. (1998). An analysis of corporate donations: United Kingdom evidence. Journal of Management Studies, 35, 641654.Google Scholar
Ali, R., Lynch, R., Melewar, T.C., & Jin, Z. (2014). The moderating influences on the relationship of corporate reputation with its antecedents and consequences: A meta-analytic review. Journal of Business Research, 68, 11051117.CrossRefGoogle Scholar
Apéria, T., Simcic-Brønn, P., & Schultz, M. (2004). A reputation analysis of the most visible companies in the Scandinavian countries. Corporate Reputation Review, 7(3), 218230.Google Scholar
Bartkus, B. R., Morris, S. A., & Seifert, B. (2002). Governance and corporate philanthropy: Restraining Robin Hood? Business and Society, 41, 319344.Google Scholar
Berman, S. L., Wicks, A. C., Kotha, S., & Jones, T. M. (1999). Does stakeholder orientation matter? The relationship between stakeholder management models and firm financial performance. Academy of Management Journal, 42, 488506.CrossRefGoogle Scholar
Bowen, F. E. (2000). Environmental visibility: A trigger of green organizational responsiveness? Business Strategy and the Environment, 9, 92107.Google Scholar
Brammer, S. J., Millington, A., & Pavelin, S. (2009). Corporate reputation and women on the board. British Journal of Management, 20(1), 1729.CrossRefGoogle Scholar
Brammer, S. J., & Pavelin, S. (2006). Corporate reputation and social performance: the importance of fit. Journal of Management Studies, 43(3), 435455.Google Scholar
Buskens, V. W. (1999). Social Networks and Trust: Sous-titre. Interuniversity Center for Social Science Theory and Methodology.Google Scholar
Campbell, J. (2007). Why would corporations behave in socially responsible ways? An institutional theory of corporate social responsibility. Academy of Management Review, 32(3), 946967.Google Scholar
Carroll, A. B. (1979). A three-dimensional model of corporate performance. Academy of Management Review, 44, 497505.Google Scholar
Clarkson, M. B. E. (1995). A stakeholder framework for analyzing and evaluating corporate social performance. Academy of Management Review, 20, 92117.Google Scholar
Clemens, B. (2001). Changing environmental strategies over time: An empirical study of the steel industry in the United States. Journal of Environmental Management, 61, 111.Google Scholar
Cochran, P. L., & Wood, R. A. (1984). Corporate social responsibility and financial performance. Academy of Management Journal, 27, 4257.Google Scholar
Damanpour, F. (1987). The adoption of technological, administrative and ancillary innovations: Impact of organizational factors. Journal of Management, 13, 675689.CrossRefGoogle Scholar
Davidson, R., & MacKinnon, J. G. (1993). Estimation and Inference in Econometrics . New York: Oxford University Press.Google Scholar
Deephouse, D. L., & Jaskiewicz, P. (2013). Do family business have better reputations than non-family firms? An integration of socioemotional wealth and social identity theories. Journal of Management Studies, 50(3), 337360.CrossRefGoogle Scholar
Donaldson, T., & Preston, E. (1995). The stakeholder theory of the corporation: Concepts, evidence, and implications. Academy of Management Review, 20(1), 6591.Google Scholar
Dozier, D. M. (1993). Image, reputation and mass communication effects. In W. Armbrecht, H. Avenarius, & U. Zabel (Eds.), Image and PR – Kann Image Gegenstand einer Public Relations Wissenschaft sein? (pp. 227250). Opladen.Google Scholar
Dukerich, J. M., & Carter, S. M. (2000). Distorted images and reputation repair. In M. Schulz, M. Hatch, & M. H. Larsen (Eds.), The Expressive Organization – Linking Identity, Reputation and the Corporate Brand (pp. 97112). Oxford: OUP.Google Scholar
European Commission (2001). Promoting a European framework for corporate social responsibility, Green Paper, 264 Final, Brussels.Google Scholar
Fama, E. F. (1970). Efficient capital markets: A review of theory and empirical work. Journal of Finance, 25, 383417.Google Scholar
Fama, E. F., & French, K. R. (2001). Disappearing dividends: Changing firm characteristics or lower propensity to pay? Journal of Financial Economics, 60, 343.Google Scholar
Fassin, Y. (2012). Stakeholder management, reciprocity and stakeholder responsibility. Journal of Business Ethics, 109, 8396.Google Scholar
Fombrun, C. (1996). Reputation: Realizing value from the corporate image. Harvard, MA: Harvard Business School Press.Google Scholar
Fombrun, C. (2001). Corporate reputation – its measurement and management. Thesis, 18(4), 2326.Google Scholar
Fombrun, C. & Rindova, V. (1996). Who’s tops and who decides? The social construction of corporate reputations, Working paper, New York, Stern School of Business, New York University.Google Scholar
Fombrun, C., & Shanley, M. (1990). What’s in a name? Reputation building and corporate strategy. Academy of Management Journal, 33, 233258.CrossRefGoogle Scholar
Friedman, M. (1970). The social responsibility of business is to increase its profits (13 September), New York Times Magazine, pp. 122–126.Google Scholar
Frooman, J. (1999). Stakeholder influence strategies. Academy of Management Review, 24, 191206.Google Scholar
Fryxell, G. E., & Wang, J. (1994). The Fortune corporate reputation index: Reputation for what? Journal of Management, 20, 114.CrossRefGoogle Scholar
Gabbioneta, C., Ravasi, D., & Mazzola, P. (2007). Exploring the drivers of corporate reputation: A study of Italian securities analysts. Corporate Reputation Review, 10(2), 99123.Google Scholar
Gardberg, N. A. (2006). Reputatie, reputation, réputation, reputazione, ruf: A cross-cultural qualitative analysis of construct and instrument equivalence. Corporate Reputation Review, 9(1), 3961.Google Scholar
Gompers, P. A., & Metrick, A. (2001). Institutional investors and equity prices. Quarterly Journal of Economics, 116(1), 229259.Google Scholar
Griffin, J. J., & Mahon, J. F. (1997). The corporate social performance and financial performance debate: Twenty five years of incomparable research. Business and Society, 6, 315331.Google Scholar
Hall, R. (1992). The strategic analysis of intangible resources. Strategic Management Journal, 13(2), 135144.Google Scholar
Halme, M., & Huse, M. (1996). The influence of corporate governance, industry and country factors on environmental reporting. Paper presented at Academy of Management Conference, Cincinnati, August.Google Scholar
Hart, S. L. (1995). A natural-resource-based view of the firm. Academy of Management Review, 20, 9861014.CrossRefGoogle Scholar
Helm, S. (2010). Employees’ awareness of their impact on corporate reputation. Journal of Business Research, 64, 657663.CrossRefGoogle Scholar
Hillenbrand, C., Money, K., & Ghobadian, A. (2013). Unpacking the mechanism by which corporate responsibility impacts stakeholder relationships. British Journal of Management, 24(1), 127146.CrossRefGoogle Scholar
Hillman, A. J., & Keim, G. D. (2001). Shareholder value, stakeholder management and social issues: What’s the bottom line? Strategic Management Journal, 22, 125139.Google Scholar
Hoffman, A. J. (1999). Institutional evolution and change: Environmentalism and the US chemical industry. Academy of Management Journal, 42, 351371.Google Scholar
Johnson, R. D., & Greening, D. W. (1999). The effects of corporate governance and institutional ownership types on corporate social performance. Academy of Management Journal, 42, 564576.CrossRefGoogle Scholar
Kansal, M., & Singh, S. (2011). Measurement of corporate social performance. Social Responsibility Journal, 8(4), 527546.CrossRefGoogle Scholar
Kitchen, P. J., & Laurence, A. (2003). Corporate reputation: An eight-country analysis. Corporate Reputation Review, 6, 115.Google Scholar
Lange, D., Lee, P., & Dai, Y. (2011). Organizational reputation. A Review. Journal of Management, 37(1), 153185.Google Scholar
Loderer, C., & Waelchli, U. (2010). Protecting minority shareholders: Listed versus unlisted firms. Financial Management, 39, 3357.Google Scholar
Mattera, M. & Baena, V. (2015). The key to carving out a high corporate reputation based on innovation: Corporate social responsibility. Social Responsibility Journal, 11(2), 221241.CrossRefGoogle Scholar
McGuire, J. B., Sundgren, A., & Schneeweiss, T. (1988). Corporate social responsibility and firm financial performance. Academy of Management Review, 31, 854872.Google Scholar
MacMillan, K., Money, K., & Downing, S. (2002). Best and worst corporate reputations: Nominations by the general public. Corporate Reputation Review, 4, 374384.Google Scholar
McWilliams, A., & Siegel, D. (2000). Corporate social responsibility and financial performance: Correlation or misspecification? Strategic Management Journal, 21, 603609.Google Scholar
McWilliams, A., & Siegel, D. (2001). Corporate social responsibility: A theory of the firm perspective. Academy of Management Review, 26, 117127.Google Scholar
Miles, R. (1987). Managing the corporate social environment: A grounded theory. Englewood Cliffs, NJ: Prentice-Hall.Google Scholar
Milgrom, P., & Roberts, J. (1986). Price and advertising signals of product quality. Journal of Political Economy, 94, 796821.Google Scholar
Miller, D., & Chen, M. J. (1996). The simplicity of competitive repertoires: an empirical analysis. Strategic Management Journal, 17(6), 419439.Google Scholar
Mitchell, R. K., Agle, B. R., & Wood, D. J. (1997). Toward a theory of stakeholder identification and salience: Defining the principle of whom and what really counts. Academy of Management Review, 22, 853886.CrossRefGoogle Scholar
Morris, S. (1997). Environmental pollution and competitive advantage: An exploratory study of US industrial-goods manufacturers. Academy of Management Conference Proceedings, August 1, 1997:1, 411–415, Boston, MA.Google Scholar
Moskowitz, M. (1972). Choosing socially responsible stocks. Business and Society, 1, 7175.Google Scholar
Musteen, M., Dutta, D. K., & Kemmerer, B. (2010). Corporate reputation: Do board characteristics matter. British Journal of Management, 21(2), 498510.Google Scholar
Navarro, P. (1988). Why do corporations give to charity? Journal of Business, 61, 6593.Google Scholar
Pastor, L., & Veronesi, P. (2003). Stock valuation and the learning about profitability. Journal of Finance, 58, 17491789.CrossRefGoogle Scholar
Pfeffer, J., & Salancik, G. R. (1978). The external control of organizations. New York: Harper and Row.Google Scholar
Podolny, J. M. (1993). A status-based model of market competition. American Journal of Sociology, 98, 829872.CrossRefGoogle Scholar
Podolny, J. M. (1994). Market uncertainty and the social character of economic exchange. Administrative Science Quarterly, 39, 458483.Google Scholar
Porter, M. E., & Kramer, M. R. (2002). The competitive advantage of corporate philanthropy. Harvard Business Review, 80, 5668.Google ScholarPubMed
Rindova, V. P., & Martins, L. L. (2012). Show me the money: A multidimensional perspective on reputation as an intangible asset. In M. Barnett & T. Pollock (Eds.), Oxford Handbook of Corporate Reputation (pp. 1633). Oxford: Oxford University Press.Google Scholar
Roberts, P. W., & Dowling, G. R. (2002). Corporate reputation and sustained superior financial performance. Strategic Management Journal, 23, 10771093.Google Scholar
Rowley, T., & Berman, S. (2000). A brand new brand of corporate social performance. Business and Society, 39, 397418.CrossRefGoogle Scholar
Ryan, L. V., & Schneider, M. (2002). The antecedents of institutional investor activism. Academy of Management Review, 27, 554573.CrossRefGoogle Scholar
Russo, M. V., & Fouts, P. A. (1997). A resource-based perspective on corporate environmental performance and profitability. Academy of Management Journal, 40, 534559.CrossRefGoogle Scholar
Sabate, J. M., & Puente, E. Q. (2003). Empirical analysis of the relationship between corporate reputation and financial performance: A survey of the literature. Corporate Reputation Review, 6, 161178.Google Scholar
Saiia, D. H. (2000). Measuring business exposure: An empirical measure of stakeholder influence and enterprise visibility. Paper presented at IABS Conference, August 2–5, Burlington, VT.Google Scholar
Saiia, D. H., Carroll, A. B., & Buchholtz, A. K. (2003). Philanthropy as strategy: When corporate charity begins at home. Business and Society, 42, 169201.Google Scholar
Sarstedt, M., Wilczynski, P., & Melewar, T. C. (2012). Measuring reputation in global markets – A comparison of reputation measures’ convergent and criterion validities. Journal of World Business, 48(3), 329339.Google Scholar
Scott, W. R. (1987). The adolescence of institutional theory. Administrative Science Quarterly, 32, 493511.Google Scholar
Scott, W. R. (1995). Institutions and Organizations. Thousand Oaks, CA: Sage. Google Scholar
Sen, S., & Bhattacharya, C. B. (2001). Does doing good always lead to doing better? Consumer reactions to corporate social responsibility. Journal of Marketing Research, 38, 225243.Google Scholar
Sharma, S. (1997). A longitudinal analysis of environmental responsiveness strategies: Antecedents and outcomes. In J. B. Keys & L. N. Dozier (Eds.), Best Paper Proceedings of the Academy of Management. Boston, MA: Academy of Management.Google Scholar
Sharma, S., Pablo, A., & Vredenburg, H. (1999). Corporate environmental responsiveness strategies: The importance of issue interpretation and organizational context. Journal of Applied Behavioral Science, 35, 87109.Google Scholar
Shumway, T. (2001). Forecasting bankruptcy more accurately: A simple hazard model. Journal of Business, 74, 101124.CrossRefGoogle Scholar
Simon, H. (1985). Goodwill and Marketing Strategies. Wiesbaden: Deutscher Universitats-Verlag.Google Scholar
Soleimani, A., Schneper, D., & Newburry, W. (2014). The impact of stakeholder power on corporate reputation: A cross-country corporate governance perspective. Organization Science, 25(4), 9911008.CrossRefGoogle Scholar
Spence, A. M. (1974). Market signaling: Informational transfer in hiring and related screening processes (Vol. 143). Harvard University Press.Google Scholar
Staw, B. M., & Epstein, L. D. (2000). What bandwagons bring: Effects of popular management techniques on corporate performance, reputation, and CEO pay. Administrative Science Quarterly, 45(3), 523556.Google Scholar
Sur, S., & Sirsly, C. T. (2013). What’s in a name? Decomposing corporate reputation to assess the relative impact of temporal, firm and industry level factors. Journal of Management Governance, 17, 10471072.CrossRefGoogle Scholar
Tischer, S., & Hilderbrandt, L. (2013). Linking corporate reputation and shareholder value using the publication of reputation rankings. Journal of Business Research, 67, 10071017.Google Scholar
Turban, D. B., & Cable, D. M. (2003). Firm reputation and applicant pool characteristics. Journal of Organizational Behavior, 24, 733752.Google Scholar
Turban, D. B., & Greening, D. W. (1996). Corporate social performance and organizational attractiveness to prospective employees. Academy of Management Journal, 40, 658672.Google Scholar
Waddock, S. A., & Graves, S. B. (1997). The corporate social performance-financial performance link. Strategic Management Journal, 18(4), 303319.Google Scholar
Walker, K. (2010). A systematic review of the corporate reputation literature: Definition, measurement and, theory. Corporate Reputation Review, 12(4), 357387.Google Scholar
Walsh, J., Weber, K., & Margolis, J. (2003). Social issues and management: Our lost cause found. Journal of Management, 29(6), 859881.Google Scholar
Walsh, G., Mitchell, V., Jackson, P., & Beatty, S. (2009). Examining the antecedents and consequences of corporate reputation: A customer perspective. British Journal Management, 20(2), 187203.Google Scholar
Weigelt, K., & Camerer, C. F. (1988). Reputation and corporate strategy: A review of recent theory and applications. Strategic Management Journal, 9, 443454.Google Scholar
White, H. (1980). A heteroscedasticity-consistent covariance matrix estimator and a direct test for heteroscedasticity. Econometrica, 48, 817838.Google Scholar
Wiedmann, K. (2002). Analyzing the German corporate reputation landscape. Corporate Reputation Review, 4, 337353.Google Scholar
Williams, R. J., & Barrett, J. D. (2000). Corporate philanthropy, criminal activity, and firm reputation: Is there a link? Journal of Business Ethics, 26, 341350.Google Scholar
Wood, D. J. (1991). Corporate social performance revisited. Academy of Management Review, 16, 691718.Google Scholar
Woodward, D. G., Edwards, P., & Birkin, F. (1996). Organizational legitimacy and stakeholder information provision. British Journal of Management, 7(4), 329347.Google Scholar