Reputation stability vs anti-crisis sustainability: under what circumstances will innovations, media activities and CSR be in higher demand?
Keywords:reputation management system, corporate reputation, reputation ranking, reputation stability, corporate social responsibility, Ukraine
Research background: The difference of war and peace can help gain an under-standing of the differences in the management of a company's reputation in terms of its stability as compared to the state of a reputation crisis. The question of practical confirmation, which is left open, is whether there is a positive correlation between the anti-crisis activity of the reputation management system and its stability in a long-term perspective, or whether these two factors are inversely related.
Purpose of the article: This research is essentially aimed at studying the impact of innovation activity, media activity, and corporate social responsibility on reputational stability as well as on anti-crisis reputational sustainability.
Methods: Indicators of innovation activity, media activity, corporate social responsibility, reputational stability, and anti-crisis reputational sustainability were collected in a sample of the most frequently mentioned in the media leading companies of the Ukrainian economy (N = 315), using an online survey done among 110 industry experts within the framework of the Reputation ACTIVists All-Ukrainian Ranking of Corporate Reputation Management Quality over February-March'2019 period. Structural equation modeling (SEM) in using the maximum likelihood estimation method was applied to examine the associations between above-mentioned indicators, according to the aim of the study.
Findings & Value added: The results of our study revealed: 1) the existence of a significant correlation between CSR and reputational stability; 2) innovative and media activity are the most significant variables to provide anti-crisis sustainability; 3) CSR is less important for ensuring anti-crisis sustainability than for maintaining reputational stability; 4) anti-crisis sustainability is significantly more dependent on media activity than reputational stability is. By better understanding the roles of innovation activity, media activity, and corporate social responsibility, the company?s management in Ukraine can leverage the results of the study to improve reputation management performance, differentiating approaches in circumstances of a crisis and stability.
Aguilera-Caracuel, J., & Guerrero-Villegas, J. (2017). How corporate social responsibility helps MNEs to improve their reputation. The moderating effects of geographical diversification and operating in developing regions. Corporate Social Responsibility and Environmental Management, 25(4). doi: 10.1002/csr. 1465.
Aramburu, I. A., & Pescador, I. G. (2017). The effects of corporate social responsibility on customer loyalty: the mediating effect of reputation in cooperative banks versus commercial banks in the Basque Country. Journal of Business Ethics, 154(3). doi: 10.1007/s10551-017-3438-1.
Ardito, L., Petruzzelli, A. M., Panniello, U., & Garavelli, A. C. (2019). Towards Industry 4.0. Business Process Management Journal, 25(2). doi: 10.1108/bpmj-04-2017-0088.
Baily, M. N., & Bosworth, B. P. (2014). US manufacturing: understanding its past and its potential future. Journal of Economic Perspectives, 28(1). doi: 10.1257/ jep.28.1.3.
Byrne, B. M. (2013). Structural equation modeling with AMOS. doi: 10.4324/ 9781410600219.
Bruyaka, O., Zeitzmann, H. K., Chalamon, I., Wokutch, R. E., & Thakur, P. (2012). Strategic corporate social responsibility and orphan drug development: insights from the US and the EU biopharmaceutical industry. Journal of Business Ethics, 117(1). doi: 10.1007/s10551-012-1496-y.
Burianová, L., & Paulík, J. (2014). Corporate social responsibility in commercial banking – a case study from the Czech Republic. Journal of Competitiveness, 6(1). doi: 10.7441/joc.2014.01.04.
Carter, S. M. (2006). The interaction of top management group, stakeholder, and situational factors on certain corporate reputation management activities. Journal of Management Studies, 43(5). doi: 10.1111/j.1467-6486.2006. 00632.x.
Caruana, A., Vella, J., Konietzny, J., & Chircop, S. (2018). Corporate greed: its effect on customer satisfaction, corporate social responsibility and corporate reputation among bank customers. Journal of Financial Services Marketing, 23(3-4). doi: 10.1057/s41264-018-0050-0.
Chung, S., Chong, M., Chua, J. S., & Na, J. C. (2019). Evolution of corporate reputation during an evolving controversy. Journal of Communication Management, 23(1). doi: 10.1108/jcom-08-2018-0072.
Coccia, M. (2018). A theory of the general causes of long waves: war, general purpose technologies, and economic change. Technological Forecasting and Social Change, 128. doi: 10.1016/j.techfore.2017.11.013.
Coombs, T., & Holladay, S. (2015). CSR as crisis risk: expanding how we conceptualize the relationship. Corporate Communications: An International Journal, 20(2). doi: 10.1108/ccij-10-2013-0078.
Derevianko, O. H. (2014). System of enterprise reputation management. Bіznes Іnform, 3.
Derevianko, O. (2019). Reputation management in business: theory, methodology and country features (the case of Ukraine). Brussels: European World Publishing.
Downes, M. (2017). University scandal, reputation and governance. International Journal for Educational Integrity, 13(1). doi: 10.1007/s40979-017-0019-0.
Duhé, S. C. (2009). Good management, sound finances, and social responsibility: two decades of U.S. corporate insider perspectives on reputation and the bottom line. Public Relations Review, 35(1). doi:10.1016/j.pubrev.2008.09.021.
Fang, W., Zhang, C., Shi, Z., Zhao, Q., & Shan, L. (2016). BTRES: beta-based trust and reputation evaluation system for wireless sensor networks. Journal of Network and Computer Applications, 59. doi: 10.1016/j.jnca.2015.06.013.
Gangi, F., Meles, A., Dangelo, E., & Daniele, L. M. (2018). Sustainable development and corporate governance in the financial system: are environmentally friendly banks less risky? Corporate Social Responsibility and Environmental Management, 26(3). doi: 10.1002/csr.1699.
Gold, M. S., Bentler, P. M., & Kim, K. H. (2003). A Comparison of Maximum-Likelihood and Asymptotically Distribution-Free Methods of Treating Incomplete Nonnormal Data. Structural Equation Modeling: A Multidisciplinary Journal, 10(1), 47–79. doi: 10.1207/s15328007sem1001_3.
He, J., & Xiong, N. (2017). An effective information detection method for social big data. Multimedia Tools and Applications, 77(9). doi: 10.1007/s11042-017-5523-y.
Hejjas, K., Miller, G., & Scarles, C. (2018). “It’s like hating puppies!” Employee disengagement and corporate social responsibility. Journal of Business Ethics, 157(2). doi: 10.1007/s10551-018-3791-8.
Hogarth, K., Hutchinson, M., & Scaife, W. (2016). Corporate philanthropy, reputation risk management and shareholder value: a study of Australian corporate giving. Journal of Business Ethics, 151(2). doi: 10.1007/s10551-016-3205-8.
Janney, J. J., & Gove, S. (2011). Reputation and corporate social responsibility aberrations, trends, and hypocrisy: reactions to firm choices in the stock option backdating scandal. Journal of Management Studies, 48(7). doi: 10.1111/j. 1467-6486.2010.00984.x.
Javed, B., Khan, A. K., & Quratulain, S. (2018). Inclusive leadership and innovative work behavior: examination of LMX perspective in small capitalized textile firms. Journal of Psychology, 152(8). doi: 10.1080/00223980.2018. 1489767.
Kiambi, D. M., & Shafer, A. (2016). Corporate crisis communication: examining the interplay of reputation and crisis response strategies. Mass Communication and Society, 19(2). doi: 10.1080/15205436.2015.1066013.
Kim, S. (2017). The process model of corporate social responsibility (CSR) communication: CSR communication and its relationship with consumers’ CSR knowledge, trust, and corporate reputation perception. Journal of Business Ethics, 154(4). doi: 10.1007/s10551-017-3433-6.
Lentjushenkova, O., Zarina, V., & Titko, J. (2019). Disclosure of intellectual capital in financial reports: case of Latvia. Oeconomia Copernicana, 10(2). doi: 10.24136/oc.2019.017.
Malkawi, B. (2015). Habib Ahmed , Mehmet Asutay , and Rodney Wilson , eds. Islamic banking and financial crisis: reputation, stability and risks. Edinburgh: Edinburgh University Press, 2014. ISBN 978-0-7486-4761-3. Review of Middle East Studies, 49(1). doi: 10.1017/rms.2015.2.
Mariconda, S., & Lurati, F. (2015). Ambivalence and reputation stability: an experimental investigation on the effects of new information. Corporate Reputation Review, 18(2). doi: 10.1057/crr.2015.4.
Mariconda, S., & Lurati, F. (2015). Does familiarity breed stability? The role of familiarity in moderating the effects of new information on reputation judgments. Journal of Business Research, 68(5). doi: 10.1016/j.jbusres.2014.09. 023.
Masharsky, A., Azarenkova, G., Oryekhova, K., & Yavorsky, S. (2018). Anti-crisis financial management on energy enterprises as a precondition of innovative conversion of the energy industry: case of Ukraine. Marketing and Management of Innovations, 3. doi: 10.21272/mmi.2018.3-31.
Mason, A. (2016). Media frames and crisis events: understanding the impact on corporate reputations, responsibility attributions, and negative affect. International Journal of Business Communication, 56(3). doi: 10.1177/ 2329488416648951.
Pearl, J., & Mackenzie, D. (2018). The book of why: the new science of cause and effect. UK: Allen Lane, an imprint of Penguin Books.
Parker, O., Krause, R., & Devers, C. E. (2019). How firm reputation shapes managerial discretion. Academy of Management Review, 44(2). doi: 10.5465/amr. 2016.0542.
Ranci, C., & Arlotti, M. (2019). Resistance to change. The problem of high non-take up in implementing policy innovations in the Italian long-term care system. Policy and Society. Advance online publication. doi: 10.1080/14494035. 2019.1619995.
Ranga, M. (2012). Stimulating R&D and innovation to address Romanias economic crisis: a bridge too far? European Planning Studies, 20(9). doi: 10.1080/ 09654313.2012.709145.
Riggs, J. D., & Lalonde, T. L. (2017). Handbook for applied modeling: non-Gaussian and correlated data. Cambridge University Press. doi: 10.1017/ 9781316544778.
Schuelke-Leech, B. (2018). A model for understanding the orders of magnitude of disruptive technologies. Technological Forecasting and Social Change, 129. doi: 10.1016/j.techfore.2017.09.033.
Shim, K., & Yang, S. (2016). The effect of bad reputation: the occurrence of crisis, corporate social responsibility, and perceptions of hypocrisy and attitudes toward a company. Public Relations Review, 42(1). doi: 10.1016/j.pubrev. 2015.11.009.
Shu, H., & Wong, S. M. (2017). When a sinner does a good deed: the path‐dependence of reputation repair. Journal of Management Studies, 55(5). doi: 10.1111/joms.12312.
Schumacker, R. E., & Lomax, R. G. (2015). A beginners guide to structural equation modeling. London: Taylor and Francis.
Sims, R. (2009). Toward a better understanding of organizational efforts to rebuild reputation following an ethical scandal. Journal of Business Ethics, 90(4). doi: 10.1007/s10551-009-0058-4.
Spearman, C. (1904). "General Intelligence," objectively determined and measured. American Journal of Psychology, 15(2). doi: 10.2307/1412107.
Szwajca, D. (2018a). Dilemmas of reputation risk management: theoretical study. Corporate Reputation Review, 21(4). doi: 10.1057/s41299-018-0052-9.
Szwajca, D. (2018b). Relationship between corporate image and corporate reputation in Polish banking sector. Oeconomia Copernicana, 9(3). doi: 10.24136/oc. 2018.025.
Taber, K. S. (2017). The use of Cronbach’s Alpha when developing and reporting research instruments in science education. Research in Science Education, 48(6). doi: 10.1007/s11165-016-9602-2.
Vallaster, C. (2017). Managing a company crisis through strategic corporate social responsibility: a practice-based analysis. Corporate Social Responsibility and Environmental Management, 24(6). doi: 10.1002/csr.1424.
Vo, T. T., Xiao, X., & Ho, S. Y. (2017). How does corporate social responsibility engagement influence word of mouth on Twitter? Evidence from the airline industry. Journal of Business Ethics, 157(2). doi:10.1007/s10551-017-3679-z.
Wang, Y., & Wanjek, L. (2018). How to fix a lie? The formation of Volkswagen’s post-crisis reputation among the German public. Corporate Reputation Review, 21(2). doi: 10.1057/s41299-018-0045-8.
Zhao, J., Huang, J., & Xiong, N. (2019). An effective exponential-based trust and reputation evaluation system in wireless sensor networks. IEEE Access, 7. doi: 10.1109/access.2019.2904544.
Zheng, B., Liu, H., & Davison, R. M. (2018). Exploring the relationship between corporate reputation and the public’s crisis communication on social media. Public Relations Review, 44(1). doi:10.1016/j.pubrev.2017.12.006.