Academic journal article Management Dynamics

A Customer-Based Corporate Reputation Scale: A Study of a Clothing Retailer's Customers

Academic journal article Management Dynamics

A Customer-Based Corporate Reputation Scale: A Study of a Clothing Retailer's Customers

Article excerpt

ABSTRACT

Corporate reputation is an intangible multi-stakeholder concept resulting from the perceptions that diverse stakeholder groups - such as customers and suppliers - have of a firm. Stakeholders' perceptions of corporate reputation are formed by different expectations of and experiences with a firm. Therefore, the dimensions that constitute corporate reputation can also be expected to differ among different stakeholder groups. The continual measurement of the dimensions relevant to a particular stakeholder group is important to detect areas that need timely adjustment.

The primary objective of this study was to validate the shortened version of the customer-based corporate reputation (CBCR) scale of Walsh, Beatty and Shiu (2009) on a sample of customers of a national clothing retailer. The findings only support two of the five dimensions of the scale, namely 'customer orientation' and 'a reliable and financially strong company'. Both these dimensions are strongly associated with outcome variables such as 'trust', 'loyalty', 'repatronage intention' and 'overall reputation'. The secondary objective of this study was to investigate respondents' awareness of the retailer's involvement in social responsibility programmes. It was found that many of the retailer's customers who participated in the study were unaware of the retailer's support of social causes. The study concludes that caution should be exercised when scales measuring corporate reputation are used in an environment dissimilar to the one where the scale was originally developed.

INTRODUCTION

Aßländer (2013) cites two reasons why corporate reputation has been receiving increased attention in scholarly research during the past decade. The first reason is the role of corporate reputation in corporate citizenship behaviour, while the second reason relates to the ability of corporate reputation to contribute to successful business. Given its multi-disciplinary nature, its relationships with various stakeholders and linkages with other constructs such as corporate responsibility and corporate citizenship, corporate reputation has been studied from various perspectives. Despite the growing interest in corporation reputation, Ohnedo-Cifuantes, Martínez-León and Davies (2014) point out that there has been little agreement about defining the concept corporate reputation. Balmer (2001: 252) even goes as far as to view the domain of corporate reputation scholarship as "Byzantine" in its complexity. Highhouse, Broadfoot, Yugo and Devendorf (2009), for instance, examined corporate reputation assessments with the so-called 'generalisability theory' and found that corporate reputation assessments support the theory underlying the corporate reputation construct. Gatti, Curuana and Snehota (2012) suggest that many scholars have viewed corporate reputation from a 'signalling theory' perspective, concluding that this theory enables stakeholders to fabricate a firm's reputation from the intrinsic and non-observable product features by the cues transmitted by the firm. These cues serve to support "a positive reputation by acting as a signal of a high-quality offering in particular when there are no possibilities to verify the actual quality of the item before purchase" (Gatti, Curuana and Snehota, 2012:66).

Helm (2011; 2007) explored the beneficial role that employees play in the development and maintenance of corporate reputation by means of the cues they convey and their interactions with a variety of other stakeholders. Baldarelli and Gigli (2014: 589) regard corporate reputation as "a multi-stakeholder concept that is reflected in the perceptions that stakeholders have of an organisation". Olmedo-Cifuentes and Martínez-León (2011: 84) define corporate reputation as the "estimate of the global perception that different stakeholders have about a company, evaluated by means of a set of dimensions and attributes that create value, are linked to the organisation and distinguish it from the rest". …

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