1

Corporate Reputation as a Strategic Resource

Autoria: Eliane Pereira Zamith Brito, Jos Carlos Thomaz, Luiz Artur Ledur Brito
Abstract
Corporate reputation can be seen as a strategic resource, or a resource that can lead to
competitive advantage using the resource-based view logic. It passes the test of being a
valuable, rare, difficult to imitate and to substitute resource. This research investigates the
components and characteristics of the corporate reputation construct and its relation other
organizational constructs like to image, communication, identity and culture. Formalization of
knowledge and investigation of resources is a key path to development of a resource-based
theory and this research addresses this aspect. The empirical part of the study covers an
investigation of hospitals in the state of So Paulo, in 2003. Close to 900 subjects (patients
and medical staff) were interviewed using a structured questionnaire and the several
constructs above mentioned were measured and their relation analyzed using several
multivariate techniques.
Introduction
Corporate reputation has been receiving increasing attention from strategic management
researchers, since it represents an intangible asset that can turn into a source of competitive
advantage (Barney, 1991; Grant, 1991; Collis and Montgomery, 1997; Dierickx and Cool,
1989). Practitioners are also interested in the subject and a research has indicated that
executives regard corporate reputation as the most important intangible asset (Hall, 1992)
Dowling (2001) and Davies et al. (2003) indicate several positive effects deriving from
a good corporate reputation. A psychological value is added to products and services offered
by the company. Corporate reputation exerts an influence in the consumer choice of products
perceived as similar otherwise. Advertising and sales promotion become more effective. It
supports new products and gives the company a second chance, should a crisis occur. It
increases the power of distribution channels and reduces the perceived risk by the customer. It
allows access to the best suppliers and to capital markets and investors. Finally, it increases
the chances of attracting and retaining more qualified people. Fombrun (1996) supports this
perception adding the external observers use strongly the corporate reputation when judging
the quality of products and the growth perspectives. Roberts and Dowling (2002) point that
the corporate reputation can cause consumers to pay a premium for offers from companies
with high reputation. A virtuous circle emerges, where the increased profitability leads the
companies into actions that further enhance their already good reputation. As this circle
evolves, the company can enjoy a sustained stream of above norm returns.
Although the management of corporate reputation is still an underdeveloped subject
(Deephouse, 2000) the empirical evidence of superior performance associated to good
reputation has been studied and supported by several authors (Fombrun and Shanley, 1990;
McGuire, Schneeweis and Branch, 1990; Podolny, 1993; Herremans, Akathaporn and
McInnes, 1993; Landon and Smith, 1997). Another stream of research supported a positive
association between financial returns or market value and good corporate reputations (Roberts
and Dowling, 2002; Brown and Perry, 1994; Capraro and Srivastava, 1997; Vergin and
Qoron-Flesh, 1998; McMillan and Joshi, 1997; Srivastava et al., 1997; Davies et al., 2003).
This positive effect of a good corporate reputation in the performance of firms can be
understood, from the strategic perspective, by the resource-based view (RBV) (Wernerfelt,
1984; Dierickx and Cool, 1989; Barney, 1991; Corner, 1991; Grant, 1991, Peteraf, 1993)

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Corporate reputation can be seen as a resource capable of producing value, exhibiting rarity,
since not all companies have good reputations. It is difficult to be imitated and is not easily
transferable. It has, thus, all the promising characteristics of a resource that can be a source of
competitive advantage (Barney, 1991). This resource is clearly one of the type described by
Dierickx and Cool (1989) with a characteristic of accumulation and flow.
Although the resource-based view had become the prevailing paradigm in strategy
research, it has been subjected to serious critique about the possibility of elevating it to the
status of a theory (Priem and Butler, 2001). One of the important criticisms is its lack of
formalization and boundaries. Almost everything can be a resource. The RBV inclusiveness
is, at the same time, its theoretical weakness. There is a need to further understand the
resources, when, where and how they can be useful. If a resource can be anything, it will be
always possible to find an appropriate resource to explain the revealed success (ex-post) of a
certain company. Future research should focus on detailing and understanding in depth the
resources and how they can produce competitive advantage. (Priem and Butler, 2001). One of
the managerial benefits of resource based logic is that it can allow managers to ensure that
they nurture and maintain the resources that are the sources of firms current competitive
advantage (Barney and Arikan, 2001). To do this it is necessary to understand the detailed
nature of these resources and what creates of destroys them.
The objective of this paper is exactly to fill this gap. It intends to be a contribution to
understand the nature and characteristics of an important resource: the corporate reputation.
Specifically it intends to identify the relationship between corporate reputation and other
organizational variables like corporate identity, image, culture, and communication. It will
also do it using a dual perspective: customers and employees.
The hospital service industry, where reputation is clearly of importance, was selected
for this study. A non-probabilistic sample of eleven hospitals, in the state of So Paulo, was
selected. Almost 900 interviews were conducted, approximately half of respondents were
customers and medical staff complete the sample. Two structured questionnaires were used
for the interviewing process. Results were analyzed using multivariate techniques and
highlighted the relationships between the several constructs investigated. Without attempting
to be a rule for riches, results can also be used by hospital managers to give direction of
how to maintain and nurture the resource of reputation.
The next section makes a brief review of the resource-based view of strategy
developing the issue that corporate reputation is clearly a strategic resource. The several
constructs involved in the research, corporate reputation, image, identity, and communication
are explained and discussed in the following section. Details of the method, sample are then
presented. The presentation of results and its discussion follow. In the final section, a
conclusion, suggestions for future studies, and a discussion on the limitations of this research
is offered.
The resource-based view and corporate reputation as a strategic resource
The resource-based view (RBV) is a recent approach to strategy. Although its origins
can be traced back to earlier works of Penrose (1959), defining a firm as a set of resources and
extracting the services from these resources, and the distinctive competencies of Selznick
(1957), it only developed itself into almost a theory during the late 80s and the 90s.
Wernerfelt (1984) is usually referred to as the first paper of this modern stream, and was
followed by several other authors (Rumelt, 1984; Barney, 1986, 1991; Dierickx and Cool,
1989; Cooner, 1991; Grant, 1991; Peteraf, 1993) ; that together built the foundations of what
is known today as the resource based-view of strategy.

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The resources analyzed in the RBV are a much broader concept than the traditional raw
material, capital and machinery. They involve all intangible assets as knowledge,
competences, and reputation (Barney, 1991). As mentioned before, this all inclusive definition
of resources is, at the same time a strength and a weakness of the RBV (Priem and Butler,
2001). The current usage of the term suggests the following definition: Resources are the
tangible and intangible assets firms use to conceive and implement their strategies (Barney
and Arikan, 2001: 138). Corporate reputation is clearly a resource.
For a resource to be a possible source of competitive advantage it must represent some
value for the final customer, be rare, only imperfectly imitable, and non-substitutable (Barney,
1991). An additional aspect is where, how and at what cost the resources can be acquired.
Barney (1986) elaborates that if the value of a resource can be know precisely ex-ante, its
price will reflect its value leaving nothing for the firm to explore. The uncertainty and even
luck play a role. Dierickx and Cool (1989) identify that many assets are non-tradable and
accumulated over time within the firm. This accumulation process can be compared the a
bathtub where there are flows in and out of it, and the resource is actually accumulated.
Corporate reputation falls exactly into this category of assets. They are, by nature, imperfectly
imitable, since their creation is path dependent. Dumbar and Schwalbach (2000) reinforce that
tangible products are usually easily copied by competitors, turning the intangible aspects of an
organization more important due to the inherent difficulty in imitation. The fact that corporate
reputation results from the interaction of the several internal and external stakeholders also
contributes to its inimitability.
Corporate reputation is also clearly of value. Among other things, a good reputation
facilitates the relationship between the firm and its partners, including employees, customers,
suppliers, and investors, allowing the firm to reduce costs and increase prices (Fombrun and
Shanley, 1990; Weigelt and Camerer, 1988).
The same aspects of non-tradability, accumulation, path dependency, that characterize
corporate reputation make it non substitutable and rare. Corporate reputation is then a clear
candidate for a strategic resource, or a resource that has chances of being a source of
competitive advantage. Understanding its creation, its relationship with other organizational
variables, is of importance for the so much needed development of sound strategic theory
using the resource-based view.
Defining corporate reputation and its defining constructs
Corporate reputation lies on some basic cornerstones. Balmer and Gray (2000: 256),
Markwick and Fill (1997: 401), van Riel (1995: 8), van Rekom (1997: 411-412), Van Riel
and Balmer (1997: 342), Lewis (2001: 2), Markwick and Fill (1997: 397), frequently refer to
identity, image, personality and reputation in presenting the guidelines of, what the company
should communicate, what it should base its corporate communication on, and how it should
communicate with its different audiences. This construct may only be comprehended by
understanding, first, these concepts and the ways they are related. For this purpose, the
concepts and dimensions of corporate identity and image are reviewed.
Corporate identity has been studied from three different viewpoints (van Riel and
Balmer, 1997: 340): graphic models or visual identification, integrated corporate
communication, and interdisciplinary approach regarding organizational behavior. The
importance rests on the latter, as a more modern and adequate way for the company to be
identified, through a complex group of attributes.
Van Riel and Balmer (1997: 341), van Riel (1997: 290) and Melewar and Jenkins
(2002: 80) view corporate identity as the means through which companies reveal their
organizational identity to their internal and external audiences, through their behavior,

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communication and symbolism. According to van Riel (1997: 290), the work of several
authors, as Albert and Whetten (1985); Balmer (1996); Laron and Reitter (1979);
Ramanantsoa (1989); and van Riel (1995), has contributed to define corporate identity as the
companys self-introduction, portrayed in the individual behavior of its members, expressing
the companys continuity, differential and centrality. The companys differential means the
aspects in which it differs from other companies, whereas its centrality regards the issues that
are considered the essence of the organization and which are spread throughout all its units
(van Riel, 1997: 290).
The French school (Moingeon and Ramanantsoa, 1997: 385) views corporate identity
as the group of interdependent characteristics of an organization, which gives it specificity,
stability and coherence. One can notice the similarity between the concepts of distinction and
specificity, continuity and stability plus centrality and coherence of van Riel (1997) and those
of Moingeon and Ramanantsoa (1997), respectively.
The marketing approach has detailed more thoroughly the ways of expressing key ideas
products, communication, behavior and environment to external audiences (Olins, 1994:
29), while the corporate literature has been more interested in the relationships between the
employees and the company commitment and identification (Ashforth & Mael, 1989;
Dutton, Dukerich, Harquail, 1994; Hatch, Schultz, 1997: 357).
Albert and Whetten (1985), Balmer (1996), Ramanantsoa (1989), and van Riel (1995),
mentioned by van Riel (1997: 290), view corporate identity as having three requirements
which shape it and characterize it: centrality or coherence, distinction or specificity and time
continuity or stability. This view regards each requirement or criteria as necessary, and the
group of three as sufficient, to define corporate identity as a scientific concept (van Rekom,
1997: 413).
Following van Riels rationale (1995: 27), Davies et al. (2001:113; 2003: 61) define
corporate image as the view of the company held by external stakeholders, especially that
held by customers. Dichter (1985: 75) states that the corporate image represents the total
impression an entity makes on the minds of others.
The definition according to Hatch and Schultz (1997: 358) follows Alvessons (1990:
376) and combines the approach of the marketing theory with that of the organizational
theory. According to these authors an organizational image is a holistic and vivid impression
held by an individual or a particular group [...] and is a result of sense-making by the group
and communication by the organization of a fabricated and projected picture of itself (Hatch
& Schltz, 1997: 359). Several dimensions shape the corporate image, and different studies
have been developed to acknowledge the standing of the companies corporate images in the
mind of consumers and stakeholders.
Following Morgans rationale (1996: 115-116), referring to corporate culture implies
mentioning the development pattern portrayed in the social systems, as well as in the
knowledge, ideology, values, laws and ritual of everyday life. If this concept is transferred to
the organizational field, Hampden-Turner (1992: 12) and Schein (1984: 3) hold similar
notions, which define virtually the same constructs. According to Schein (1984), corporate
culture represents the pattern of basic premises invented, discovered or developed by a
specific group, in the process of learning to solve its problems of external adaptation and
internal integration. This pattern of basic premises worked successfully enough, as to be
considered valid and, thus, taught to the new members of the group as the correct way to
perceive, think and feel about such problems.
Molenaar, Brown, Caile, & Smith (2002: 19), Wilson (2001: 354), Lysons (2000), and
Hagberg and Heifetz (2002) define corporate culture as the beliefs, values and behavior that
are equal among all members of the company. According to these authors, culture determines
the job environment and the tasks through which companies excel. Thus, it is understood that,

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the environment is an extension of the people themselves, and the true human nature of
companies is the need to build the company, based on the people rather than on the techniques
(Morgan, 1996: 141-142). Dutton, Dukerich and Harquail (1994: 248-249), Hatch and Schultz
(1997:361) say that the relationship between corporate culture, image and identity outlines a
circular process involving mutual interdependence. From this viewpoint, the organizational
identity is a self-portraying product of the dynamic processes of the organizational culture.
Corporate communication is a process through which stakeholders perceive that the
companys identity, image and reputation have been built (Balmer & Gray, 2000: 256). Also,
as described by Markwick and Fill (1997: 401), corporate communication is the process
that transforms corporate identity into corporate image and highlights the language the
company uses to introduce itself to stakeholders.
Van Riel (1995: 8) views corporate communication as a picture with three main parts:
managerial, marketing and organizational communication. The marketing communication and
the organizational one explain the prevailing link between identity and image, and also,
between image and strategic management. The managerial communication establishes the link
between personality and identity, as well as between strategic management, personality and
identity.
Christensen and Askegaard (2001: 303) follow a different line of rationing and analyze
communication and the links between corporate identity and image, through the process of
signification or semiotics, as developed by Peirce (2000). In this process, three elements meet
in a dynamic relationship: a signal, an object and an interpretant. In the organizational area the
signal could be represented by a logo, a commercial, a slogan, a product, a set of behaviors,
the values, stories and rituals. The interpretant is a mental image of the interpreter, built or
suggested by the signal.
Three main models to measure corporate reputation may be pointed out. The first one,
launched by Fombrun, Gardberg and Sever (2000: 245-254), uses one dimension of emotional
appeal and five of a rational nature. It was adopted by Harris Interactive and has become
knows as the Harris-Fombrun Reputation Quotient (Harris Interactive, 2002). It originated
from a hit-list type research. The second model derives from the loyalty customers feel
towards the company and is based, mainly, on the familiarity between the company and the
general public, and on the favorable feeling the latter has regarding the company. This is the
model chosen by MORI for their MORI Excellence Model Chart, by CIPA. Analysis, which
is based on the MORI Model and by CIB. The third model, growing out of the field of
psychology, uses a metaphor to compare the organizational traits to those of the human
personality and also to measure the level of reputation of companies. This line of rationing
is defended by Aaker (1997) and is utilized specifically by the Corporate Reputation Institute
(CRI, 2002; Davies et al., 2003: 148).

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Culture

Personality
Employees
Viewpoint

Corpora
tion

Identity

Clients
Viewpoint

Image

Agreeability
Entrepreneurship
Competence
Elegance & Style
Roughness
Machism
Informality

Reputation

Figure 1 The corporate reputation model

Source: Authors, based on Davies et. al. (2003)

The present research model is based on the CRI Model. It was created in order to assess
the way in which corporate culture, identity, image and communication influence corporate
reputation. According to the reference model, the company is seen and felt by its main
stakeholders, both internal and external. Internally, the companys culture should supply
several pre-requisites of corporate identity. Corporate culture, as a system of shared values,
beliefs and behavior that drive the actions and attitudes of employees and top management,
aids in the perception, thoughts and feelings of these people towards the company, thus
shaping its identity. On the external front, the opinion of customers and other external
stakeholders should mirror the image formed by the association between identity and culture,
mainly represented by the actions performed by the front line employees during the service
encounters.
Corporate communication is not specifically shown on the graphic model. Yet, culture,
identity and image interact through all types of communication, a fact that becomes implicit in
the figure, by means of the arrows that link the different components of the model. Culture
and identity, as they are externally communicated and perceived, supply the image held by
external stakeholders. The degree of evaluation or regard for the companys image is thus
represented as its corporate reputation. It should be noted that corporate culture and corporate
communication permeate the organization and play a decisive role as elements that build the
identity and image, and, thus, the corporate reputation.
The research hypotheses
Several authors (Alvesson, 1990; Fombrun, 1996; Hatch & Schultz, 1997; Davies et al.,
2001, 2003) associate corporate identity with corporate image and, thus, with corporate
reputation. These associations are still made on the theoretical level, with only a few practical
attempts to measure them, mainly on the part of Davies et al. (2001, 2003), who have studied
the relationship between corporate identity, image and reputation.
In light of these facts and of the specific subject on which the present work focuses, the
question posed was the following: What is the influence of corporate culture, identity, image
and communication on the corporate reputation?
The basic hypothesis was stated as follows: The corporate reputation of hospital
organizations is influenced by corporate culture, identity, image and communication (H1).
Other relationships, based on theoretical studies, were derived from the research issue
and the basic hypothesis. Thus, several other relationships were also studied, which originated
the following hypotheses:

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There is a positive relationship between the assessment of front line staff, regarding
corporate reputation, and the corporate culture, identity and communication (H2) ;
There is a positive relationship between the assessment of patients, regarding corporate
reputation, and corporate image and communication (H3);
There is a positive relationship between the assessment of employees, regarding
corporate reputation, and the assessment of its customers about the same issue (H4).
Methodological Procedures
The issue put forward in the present study includes five constructs listed bellow, which
were measured through few variables as explained here. The scale definition was based on
previous research intended to measure similar constructs and also on theoretical studies. Two
closed questionnaires were developed, one for the patient and another for the medical staff.
The first questionnaire measured four constructs (reputation, image, identity and
communication) and the second one considered the five constructs. Culture was not included
in the patients questionnaire because it is something that external stakeholders can only
perceive the effect of culture on other aspects of the organization. Each interviewee was
asked to state his/her degree of agreement, from 1 (totally disagree) to 10 (totally agree),
regarding the statements on the questionnaire. Many pre-tests were held until the scale was
adjusted. The scale used to measure reputation had to be translated from English to
Portuguese and then it was translated back to English to guarantee validity.
a) Corporate Identity - how members of an organization perceive, feel or think about it, as
stated by Hatch and Schultz (1997: 357-8). Variables used: feeling of belonging, acceptance,
centrality, distinction, values, behavior and acknowledgement.
b) Corporate Image how external stakeholder views the company. Van Riel (1995: 27) and
Davies et al. (2001: 113, 2003: 61) were used in the scale definition for this construct.
Variables used: quality, credibility, innovation, focus on the customer and social
responsibility.
c) Corporate Culture the shared system of values, beliefs and behavior that shapes the
behavior of company members and is transferred to new members of the group, as defined by
Parasuraman (1987: 40), Lysons (2000), Hagberg and Heifetz (2002). Variables used:
interaction with supervisors, mutual trust, relevance of human resources, initiative/delegation,
partnership/collaboration among workers and reward.
d) Corporate Communication the management fashion to exchange information with
external and internal stakeholders in an integrated, harmonious and efficient manner,
according to van Riel (1995: 26), Melewar and Jenkins (2002: 81-82) and van Rekom (1997:
411). Variables used: visibility, shared viewpoint, feedback of information, ombudsman,
marketing communication, trust, information consistency.
e) Corporate Reputation the collective evaluation of company personality, as may be
inferred from the definitions of Davies et al. (2003: 63, 148-150), Aaker (1997: 354) and
Fombrun, Gardberg and Sever (2000: 243). Variables used: agreeability, entrepreneurship,
competence, elegance and style, friendliness, sophistication and informality.
Employees working with patients (medical staff), as well as, patients or the people
accompanying them were interviewed. The research was conducted in two municipal public
hospitals, two state public hospitals and seven private hospitals. Two of the hospitals are
small institutions, four are medium-sized and five are large ones. For the purpose of
confidentiality, hospitals were coded as Hn, with n varying from 1 to 11. The criterion to
select the hospital sample was access to the organization managers.
Some 428 medical staff and other 445 patients were interviewed. Patients were
randomly chosen. The sample size for each hospital varied, according to the number of

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patients available during two to three days spent in each site. All available medical hospital
staff which deal with patients were contacted. The interviews took place during the first
semester of 2003.
The data collected were analyzed using descriptive statistics and some multivariate data
analysis technique. Factor analysis was used scale validity and also to reduced the number of
variables, grouping collinear variables. The correlation analysis was applied to evaluate the
strength of the associations: reputation vis--vis the culture, identity and communication,
according to the internal stakeholders (hypothesis 2); that of the corporate reputation vis--vis
the image and the communication, according to external stakeholders (hypothesis 3); that of
the assessment of corporate reputation made by internal stakeholders vis--vis the assessment
of external stakeholders (hypothesis 4). The technique of multiple regression analysis was
used to verify the association among variables.
As this research is not a probabilistic one, the findings cannot be extended to the rest of
the population, to other groups, or to conditions other than those found in the study. Thus, the
external validity of this research is not guaranteed. For the reliability, the split-half method
was used to study consistency, and the correlation coefficient was used to assess the reliability
of the measurement. The lowest correlation obtained was 0.74 and the lowest Cronbach alpha
was 0.75.
Research Results
The assessment to the medical staff was made using the computed mean taken from the
scale resulting from the sum of the assessment of each variable. The Cronbach test
recommends adding the variables to have a summed score to represent each construct (alpha
of 0.86 for the image, 0.83 for identity, 0.84 for communication, 0.88 for culture and 0.93 for
reputation). The test shows that the variable used for each construct measure the same
phenomenon.
In order to confirm there is a positive relationship between the assessment of front line
employees, regarding corporate reputation, and the corporate culture, identity and
communication of hospitals (hypothesis 2), the correlation was established between corporate
reputation and the variables resulting from the added scales of culture, identity and
communication. The strongest correlation exists between image and reputation (See Table 1).
This finding supports the theory, as is stated mainly by van Riel (1995: 27), Davies et al.
(2001: 113, 2003: 61-63) and Fombrun, Gardberg and Sever (2000: 243). According to these
authors, the image is the way the company is regarded and the reputation is the assessment or
collective regard for the attributes of an organization, shown through its image.
Table 1 Correlation analysis staff
Source: Authors
Culture
Pearson correlation 0,801(*)
Sig. (2-tailed)
0,001
N
417
Image
Pearson correlation 0,559(*)
Sig. (2-tailed)
0,001
N
418
Communication Pearson correlation 0,740 (*)
Sig. (2-tailed)
0,001
N
420
Reputation
Pearson correlation 0,591 (*)
Sig. (2-tailed)
0,001
N
417
*) correlation is significant at the 0,01 level (2-tailed)

Identity

Image

Communication

0,700(*)
0,001
418
0,759(*)
0,001
423
0,648(*)
0,001
419

0,825(*)
0,001
421
0,891(*)
0,001
419

0,823(*)
0,001
422

Identity

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The same procedure, used in the assessment of hospitals by the medical staff, was
adopted to verify the assessment according to the patients. The Cronbach test indicated the
feasibility of adding the variables, since the alpha values were 0.65 for the image, 0.79 for the
identity, 0.71 for communication and 0.88 for reputation.
In order to test the hypothesis that there is a positive relation between the assessment of
patients, regarding corporate reputation, and the hospitals corporate image and
communication (hypothesis 3), a correlation analysis was made between corporate reputation
and the variables resulting from the added scales of image, identity and communication the
four variables, resulting from the added scales. The strongest correlation again appeared
between identity and reputation, closely followed by the correlation between image and
reputation (See Table 2). Thus, it may be inferred that hypothesis 3 should be accepted.
Table 2 Correlation analysis patients
Source: Authors
Identity
Pearson correlation 0,688(*)
Sig. (2-tailed)
0,001
N
438
Communication Pearson correlation 0,573(*)
Sig. (2-tailed)
0,001
N
436
Reputation
Pearson correlation 0,784(*)
Sig. (2-tailed)
0,001
N
441
*) correlation is significant at the 0,01 level (2-tailed)

Image

Communication

0,681(*)
0,001
436
0,730(*)
0,001
441

0,562(*)
0,001
438

Image

Through Factor Analysis (the main component) all the variables was summarized into a
smaller set of factors. This analysis was applied to the data obtained from the medical staff, as
well as to those obtained from patients. It was possible to verify whether the factors generated
represent the original constructs of the research. Variables were reduced to three factors with
eigenvalue higher than 1. Factor 1 is charged mainly with variables related with culture and
identity, thus it was called internal factor. The second factor is made up of variables related
with image and external communication and was then called external factor. Finally, two
variables related with identity, and clearly reflecting the individuals need to belong to a
group, make up factor 3; therefore, this factor was named group attitudes (See Exhibit 1).
Internal factor

External factor

Group attitudes

Cul

Interaction with higher level

members of the company
hierarchy

Im

Service quality

Ind

Feeling of belonging

Ind

Recognition

Com

Shared vision

Ind

Being accepted as a group

member

Com Feedback
Im
Cul
Mutual trust
Im
Cul
Human resource importance
Com
Cul
Initiative/empowerment
Com
Ind
Values
Im
Cul
Affiliation among employees Im
Id
Behavior
Com Information agreement
Cul
Prize
Exhibit 1 Factor analysis results- staff
Source: Authors

Credibility
Innovation
Marketing communication
Communication reliability
Customer oriented
Social responsibility

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The multiple linear regression analysis, between corporate reputation and the factors
found through the factor analysis, indicated a regression coefficient (R2) equal to 0.81. This
can be considered an excellent result. The ANOVA analysis indicated that, the factors
resulting from the factor analysis influence the construct obtained from the added scale of the
seven variables, representing the reputation construct. Thus, it may be inferred that, according
to the medical staff of the researched hospitals, hypothesis 1 should be accepted. The
regression analysis showed, through coefficient , that, in the opinion of the medical staff, the
external factor has the highest influence on the reputation, followed by the internal factor
and, finally, the group attitudes. The external factor influences the reputation twice as
much as the internal factor, and almost four times as much as the group attitudes (See
Table 3).
Table 3 Regression results staff
Source: Authors
Model
R
Rsquare
1
Regression
Residual
Total

0,900a
0,811
Sum of squares
Df
64594,2
3
15074,0
406
79668,2
409
Unstandardized
coefficients
B
Std Error
57,321
0,301
4,958
0,300

Adjusted
R square
0,809
Mean square
21531,407
37,128

Std Error of
the estimate
6,09328
F
579,923

DurbinWatson
1,687
Sig.
0,001a

Standardized
coefficients
Beta

t
Sig.
(Constant)
190,483
0,001
REGR factor score
0,356
16,508
0,001
1 for analysis 1
REGR factor score
11,152
0,301
0,800
37,055
0,001
2 for analysis 1
REGR factor score
2,970
0,301
0,213
9,880
0,001
3 for analysis 1
a. predictors (constant), REGR factors score 3 for analysis, REGR factor score 1 for analysis 1,
REGR factor score 2 for analysis 1
b. Dependent variable: Reputation

A closer analysis explains, in light of the theory, the behavior of these factors. As may
be seen, all the variables of the image construct and three of the variables of the
communication construct make up the external factor. Regarding the image, and based on
van Riels definition (1995: 27), image is the portrait people have of the organization, and the
reputation is the assessment of this image (Markwick & Fill, 1997: 398; Dowling, 2001: 1921) or, as stated by Fombrun (1996: 37), the reputation materializes the image. With regard to
the communication, Gronroos (1993: 106) mentions that it emphasizes and shapes the
companys image. Adding the variables of these two constructs image and communication
into one single factor, the weight of their influence on the reputation construct becomes
apparent.
The same analysis procedure was conducted with customers data. The original variables
were reduced to three factors with eigenvalue above 0.98. This eigenvalue was selected to
work with three factors because, with an eigenvalue above 1, only two factors were obtained
and there was no logic to explain such a grouping. These factors were named customers
opinion, communication and innovation (See Exhibit 2).

11

Customers opinion
Im Service quality
Com
Ind Feeling of belonging
Com
Im Credibility
Com
Ind Centrality
Im
Ind Values
Com Communication reliability
Im Customer oriented
Com Information agreement
Ind Behavior
Exhibit 2 Factor analysis results- patients
Source: Authors

Communication
Visibility
Ombudsman
Marketing communication
Social Responsibility

Innovation
Im Innovation
Ind Distinction

The multiple linear regression analysis between corporate reputation and the factors
identified by the factor analysis indicated a regression coefficient (R2) of 0.7. This result may
be considered as highly satisfactory. The ANOVA analysis indicated that, the factors resulting
from the factor analysis and taken from the constructs of identity, image and communication
influence the construct obtained from the added scale of the seven variables, representing the
reputation of the researched hospitals, in the opinion of the patients. Thus, it may be inferred
that, according to the patients of the hospitals in the research, hypothesis 1 should be
accepted. The regression analysis brought evidence (coefficient ), that, according to the
patients, the factor named customers opinion has the strongest influence on the reputation,
followed by the innovation and communication factors. Customer opinion influences the
reputation twice as much as innovation, and three times as much as communication.
Table 4 Regression results staff
Source: Authors
Model
R
Rsquare
1
Regression
Residual
Total

0,841a
0,707
Sum of squares
Df
27933,6
3
11599,2
430
39532,8
433
Unstandardized coefficients

Adjusted
R square
0,705
Mean square
9311,210
26,975

Std Error of
the estimate
5,1937
F
345,181

DurbinWatson
1,815
Sig.
0,001a

Standardized
coefficients
Beta

B
Std Error
T
Sig.
(Constant)
63,092
0,249
253,070
0,001
REGR factor score
6,970
0,250
0,730
27,927
0,001
1 for analysis 1
REGR factor score
2,138
0,250
0,224
8,565
0,001
2 for analysis 1
REGR factor score
3,370
0,250
0,353
13,500
0,001
3 for analysis 1
c. predictors (constant), REGR factors score 3 for analysis, REGR factor score 1 for analysis 1,
REGR factor score 2 for analysis 1
d. Dependent variable: Reputation

A more detailed analysis suggests, based on the theory, some ways to explain the
behavior of these factors. The customers opinion factor is made up of three variables of the
image construct, with a strong appeal to the patient: quality of service, reliability and focus on
the customer. According to Dichter (1985: 75), these variables have a strong impact on the
mind of the patient, with regard to the hospital. This factor is also made up of variables
pertaining to the identity construct, which contribute to shaping the image: feeling of

12
belonging, centrality, values and behavior. These make patients feel they are being helped by
a team that is cohesive and committed to the success of the service. This factor is finally made
up of two variables of the communication construct, which are essential to establish the link
between the medical staff and the patient, thus improving their opinions. Two of the
communication variables information reliability and information agreement refer to the
interactive marketing (Kotler & Armstrong, 1999: 459), which occurs in the service
encounters.
The relationships between the assessments of internal stakeholders medical staff and
external stakeholders patients were identified by means of the added scales of the
assessments, for each variable. The feasibility of the sum of the variables had previously been
tested. The correlation between the variables is significant at the level of 0.05 for
communication and 0.01 for image.
In order to test the hypothesis that a positive relation exists between the assessment of
corporate reputation made by the hospital employees, and the same made by its patients
(hypothesis 4), the correlation was made between the corporate reputation, according to the
patients, and according to the employees, as well. The correlation is significant at the level of
0.05. Thus, it may be inferred that hypothesis 4 should be accepted.
Conclusions
The overall objective of this research was to understand the strategic resource corporate
reputation and how it relates to other organizational variables: image, identity, culture and
communication.
Our first hypothesis (1) was easily and predictably supported. Although a causal
relationship can only be implied when supported by theory, the high correlations observed
between these variables and the variable reputation, indicate that. The high value of R2
obtained in both regressions also indicates the same. Culture, identity, image and
communication have an influence on reputation.
The second hypothesis (2) predicted a positive relationship between the assessment of
corporate reputation by the medical staff and the corporate culture, identity and
communication. Evidence from the correlation analysis also supports this hypothesis, but the
culture relationship seems to be a weak one.
Hypothesis 2 should be accepted because the analysis have shown there is a positive
relation between the assessment of front line employees, regarding corporate reputation and
the corporate culture, identity and communication of hospitals. Although Moingeon and
Ramanantsoa (1997: 385), van Rekom (1997: 84), Fombrun (1996: 277), Hatch and Schultz
(1997: 357), Downey (1986: 7), and Melewar and Jenkins (2002: 84), do not reach a
consensus on where to place the culture construct, the regression analysis indicated that the
relation between culture and reputation is a weak one, although it is strong between culture
and identity, and between identity and reputation, as well. Thus, evidences indicate that
culture is an integral part of the Corporate Reputation Model.
Centrality as the essence of the organization, the way it is mentioned by Albert and
Whetten (1985, apud van Rekom 1997: 413), van Riel (1997: 290) and Moingeon and
Ramanantsoa (1997: 385), provides organizations with a guide for their actions in favor of
customers. The factors, resulting from the assessment of the medical staff in these hospitals,
demonstrated there is no emphasis on some of the attributes, essential for a good institution to
provide its services to the client.
The third hypothesis (3) predicted a positive relationship between the assessment of
patients regarding corporate reputation and the hospitals corporate image and
communication. Hypothesis was also supported by the analysis, but the relationship with

13
communication seems to be weaker, probably indicating an area of possible improvement.
The weight of the customers opinion factor stood out, which is a factor made up of
variables from the image, identity and communication constructs. This data confirms the
influence of the image on the reputation construct, according to the patients. In the case of the
hospital sector, and according to the results obtained, it is difficult to agree with Bernstein
(1984) regarding the possibility of manipulating the image to attract patients. Referring back
to van Riels definition (1995: 27), it is observed that, the image is a picture people have of
the organization and the reputation is the assessment of the image (Markwick & Fill, 1997:
398; Dowling, 2001: 19-21). Furthermore, as stated by Fombrun (1996: 37), the reputation is
materialized through the image. As is the case with the analysis of the main component of the
assessment by the medical staff, all the variables of the image construct and some of the
communication construct make up the external factor. Considering the weight of this factor
to explain reputation, the influence of image on reputation becomes apparent.
There is a strong correlation between culture and identity. This correlation confirms
other theories, mainly those of Lysons (2000) and Hagberg and Heifetz (2002) for whom the
culture, as the system of shared values, beliefs and behavior influences the behavior of the
members of the organization and, as a result influences the way these people identify with
company values. It also confirms the theory of Moingeon and Ramanantsoa (1997: 385) for
whom culture is the visible part of corporate identity.
In the opinion of patients, the strongest correlation between constructs occurs between
identity and reputation, followed closely by the correlation between image and reputation.
This result agrees partially with the theory of van Riel (1995: 27), Davies et al. (2001: 113,
2003: 61-63) and Fombrun, Gardberg and Sever (2000: 243) the reputation is the
assessment of the image and it matches that of Christensen and Askegaard (2001: 306) and
Dutton, Dukerich and Harquail (1994: 249-250), in the sense that corporate identity and
image are closely interrelated. In the opinion of the medical staff, however, these theories are
fully corroborated.
Finally, the last objective was to determine the relations between the assessments of the
medical staff and those of the patients. According to hypothesis 4, there is a positive relation
between the assessment of corporate reputation, of a hospitals employees, and that of its
patients. As a matter of fact, this relation may be demonstrated through the correlation
analysis, between the assessment of reputation made by the medical staff, and the one made
by patients, which proves the hypothesis.
The research contributes to build a more thorough and clear understanding of the
components of corporate reputation, its set-up and management. As an example of the above,
the issues regarding culture and communication, included in the Corporate Reputation Model,
introduced a more integrated viewpoint of such constructs.
The communication between hospitals and its clients is important. Yet, in light of the
present practical framework, as well as of the theory, it is questioned whether these actions
are directed to the patients or to the health plan managers. Apparently, hospitals are passive
regarding this type of communication and simply wait for the arrival of patients. Advertising,
by itself, should not build corporate reputation, as stated by Schultz and Nielsen (2002: 335336); however, the issue lies in what type of visibility and communication hospitals should
seek. The word of the mouth communication proved to be relevant, but according to Melewar
e Jenkins (2002: 82) it cannot be controlled. In a future study the effects of this type of
communication could be researched, due to the influence it has on the purchasing decisions.
Corporate reputation is a strategic resource and can be a source of competitive
advantage. This paper allows a deeper understanding of its components and sets the stage for
future studies. Its relationship with factors like culture, communication, image and identity
help to understand the cumulative, path dependent nature of this resource. The very

14
characteristics that allow it to become a candidate for a source of competitive advantage.
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