components and parameters of corporate reputation - sbr ...

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Corporate Reputation of the company (or the company’s stocks, if listed), so we name this factor “performance”. Factor 3 shows attributes that illustrate the interaction with the different stakeholder groups and may well be described with the name “responsibility”. Factor 4 is named “attractiveness”, although the only major loading is shown by the attribute “I could see myself working at …”. The factor should not be removed because its eigenvalue is considerably above 1. 4.6 MODEL BUILDING AND PARAMETER ESTIMATION In this paper reputation was conceptualized as an attitudinal construct. Therefore, it can be split into affective and cognitive components. Cognitive procedures are often described as information-processing tasks, i.e., procedures through which an individual recognizes itself and its environment 74. Here, we consider information selection, perception and evaluation, learning and commemoration, as well as building preferences and decision-making, as cognitively dominated. In the context of corporate reputation in the cognitive section, we are seeking the stakeholders’ subjective knowledge and/or perceptions and a (at least intended) rational appraisal of company attributes. Because there is no literature on managerial competence, we do not have substantial knowledge on this competence. Thus, we have to rely on face validity when operationalizing that component. Using items referring to the performance of a company, to its ability to do business globally, and to its reputation as a top-competitor in its market, it seems plausible to denote that component as the amount of competence that stakeholders assign to a company. Besides rationally ratable aspects such as quality and performance, we extracted several constructs from the expert interviews and the focus groups, which were more emotionally dominated. These constructs are connected with a sort of personal appreciation of how a company is and what it does. We tend to assign these affective components 75, often described as feelings and sentiments, to a construct called “sympathy”. As opposed to the competence construct, there are a lot of references on the affective component to be found in literature on brand management and on brand equity. We refer to the Brand Potential Index (BPI ® ) of GfK Market Research 76 and operationalize the latent variables sympathy using three items: Besides a simple liking of a company, we want to measure how strongly a respondent identifies himself with a company and how big his regret would be if the company no longer existed. The validity and reliability of these items have been proven by confirmatory factor analysis. The results may be found in the given references. Our confirmatory factor analysis shows that the six reflective indicators can be assigned to the rational and emotional dimensions of reputation in the desired manner. Single-factor principal component analyses show percentages of variance explained of 67% in exploration as well as in validation sample. Factor reliabilities 74 See Kroeber-Riel/Weinberg (2003), pp. 225 – 367. 75 See Kroeber-Riel/Weinberg (2003), pp. 53 – 224, esp. p. 100. 76 See Hupp (2000), pp. 45 – 46; Grimm et al. (2000), p. 9. sbr 56 (1/2004) 63
M. Schwaiger and average variance extracted (AVE 77) shown in Table 5 prove to be acceptable, at least in terms of usual goodness-of-fit requirements 78. A final test using the Fornell and Larcker criterion 79 proves the discriminant validity of both dimensions of corporate reputation (p < 0.01). That means, sympathy and competence are definitely distinctive components. Now that the operationalization of the endogenous variables is done, we examine the explaining, exogenous variables. Table 5: Operationalization of “Sympathy” and “Competence” �� 77 See, e.g., Homburg/Baumgartner (1998), p. 361. 78 See, e.g., Bagozzi/Baumgartner (1994), p. 403; Balderjahn (1986), p. 118. 79 See Fornell/Larcker (1981). 80 Diamantopoulos/Winklhofer (2001), pp. 272 – 274, suggest integrating reflective indicators of the key constructs, the more so as path coefficients of the formative indicators, required to calculate the indices, are not affected by doing so. 64 sbr 56 (1/2004) � �� (�� Using MIMIC models, we successively constructed indices for quality, performance, responsibility, and attractiveness. To ensure external validity 80 we analyzed the path coefficients between the indices and the endogenous variables of corporate reputation, i.e., competence and sympathy as operationalized in Table 5: All of these coefficients were significant at a level of α = 0.001, and they showed values above 0.75 in exploration and in the validation sample. Hence, there is no suggestion that indicators were wrongly assigned or that there were other failures in the procedure chosen.
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