Corporate Responses to Changes in Reputation
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Volume 1 Number 3
Corporate Responses to Changes in Reputation Suzanne M. Carter, Department of Management, University of Notre Dame and Janet M. Dukerich, Department of Management, University of Texas at Austin
ABSTRACT This research examines how changes in an organization’s reputation affect subsequent managerial actions taken by the firm. Based on a model developed from the impression management literature, potential actions taken by managers in an attempt to manage the organization’s future reputation are hypothesized. Using a pooled cross-sectional time series design, results suggest that such tactics as press releases and advertising are used by managers in response to a downturn in their firm’s reputations, while tactics such as increasing donations to charity are not. Furthermore, upturns in reputation seem to be associated with a decreased emphasis on advertising expenditures. Implications of these findings are suggested.
Corporate Reputation Review, Vol. 1, No. 3, 1998, pp. 250–270 # Henry Stewart Publications, 1363–3589
Page 250
INTRODUCTION Corporate reputation is a critical feature of organizations (Barney, 1991; McGuire, Sundgren & Schneeweis, 1988; Weigelt & Camerer, 1988). Much of the research in this area has examined either the determinants of corporate reputation (Fombrun & Shanley, 1990; Sobol & Farrelly, 1988), or the particular strategies organizations use to build reputation (Fombrun, 1996). Although most researchers agree that managers perceive corporate reputation to be an important element to manage (Hall, 1993), and that advertising and other promotional devices are often effective at improving corporate reputation (Schu-
mann, Hathcote & West, 1991), little empirical work to date has tested how changes in corporate reputation affect the actions that organizational members take. This study used theory and research on individual impression management to examine the question, ‘How might a change in an established reputation influence the future corporate reputation management actions of organizational members?’ The article is organized as follows. First, the authors discuss past research on impression management in organizational settings, develop a model from the impression management literature, and present a set of hypotheses. They then describe a study conducted to test these hypotheses empirically. Finally, they discuss contributions of this study and suggest implications for future research.
IMPRESSION MANAGEMENT IN ORGANIZATIONAL SETTINGS Impression management theory was originally developed in such diverse areas as literature, philosophy, psychology, and sociology. These literatures view impression management as the response made by individuals’ ‘self-presentations’ in order to manage the identities that others assign to them (Tedeschi, 1981). Chatman, Bell, and Staw refer to impression management as ‘an interpersonal motive to impress others or to satisfy external publics’ (1986,
Carter and Dukerich
p. 196). Over the past several decades, researchers have discovered sever
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