Kurumsal İtibar: Farklı Bakış Açıları (I) Oturumu Doç. Dr. Turhan ERKMEN, Arş. Gör. Dr. Emel ESEN

How Do Weak and Strong Culture Influence Corporate

Reputation?Assoc. Prof. Dr. Turhan Erkmen

PhD. Emel EsenYıldız Technical University

Business Administration Department

PurposeThe purpose of the study is to determine how

weak and strong corporate culture affects corporate reputation.

Corporate ReputationNew changes and challenges in the market

call upon organizations to focus on their reputation in order to create better product and services; enhance their credibility and image (Srivoravilai, 2011, p. 243).

In the past two decades, there has been considerable interest and research on corporate reputation and it has become a business issue since the 20th century

Corporate ReputationReputation is so one of the intangible assets

that is extremely hard to imitate, turning it into a valuable source of competitive advantage (Alsop, 2004, p. 1).

Corporate reputation is described in the academic literature as organizational standing, goodwill, esteem, organizational identity, organizational image, brand and prestige (Shenkar and Yuchtman Yaar, 1997; Wartick, 2002).

Corporate ReputationBalmer’s (1998) review of the evolution of the

theory of corporate reputation identified three stages of development. The first phase (in the 1950s) focused on corporate image, giving way in the 1970s and 1980s to an emphasis on corporate identity and corporate communications, and then in the 1990s to a mounting interest in corporate brand management and thence reputation (Bennett and Kottasz, 2000, 225).

Corporate ReputationCorporate reputation is an emotional capital

that reflects the various stakeholders’ perceptions about organization’s past and future actions and inimitable, intangible assets (Kotha, Radgopal and Rindova, 2001; Fombrun and Van Riel, 2004; Gable, 2008; Walsh and diğ., 2009; Firestein, 2006; Worcester, 2009; Schürmann, 2006).

Organizational CultureOrganizational culture refers to the shared

norms, beliefs, and behavioral expectations that drive behavior and communicate what is valued in organizations (Hemmelgarn, Glisson and James, 2006, 73).

Organizational CultureAccording to Schein (2004), organizational

culture is manifested at three levels. Cultural artifacts may be visible structures and processes, dress, observable rituals and ceremonies.

Espoused beliefs and values are consciously developed formal organizational practices such as strategies, goals and policies, and informal practices like implicit norms.

Underlying assumptions are unconscious thoughts, beliefs, expectations and theories (Armenakis, Brown and Mehta, 2011, 306).

Organizational CultureWhen these beliefs and values are widely and

deeply held, the culture is considered “strong culture.”

In this respect there is less need for detailed organizational rules and regulations. In contrast, in “weak organizational culture” rules and regulations are strictly enforced to control behavior (Sabri, 2008, 128).

The Effect of Corporate Culture on Corporate Reputation

Researchers have paid little attention to how culture affects corporate reputation, even though cultural values and norms are important influences on how people interpret information and behave (Bartikowski, Walsh and Beatty, 2011, 966).

Culture and reputation are considered intangible assets because each add value through differentiation, is rare, difficult to imitate and without substitution (Flatt and Kowalczyk, 2008, 14-15).

The Effect of Corporate Culture on Corporate Reputation

With a strong foundation in place and values and goals communicated, employees will have higher productivity levels, effortlessly adapt to changing demands with high levels of loyalty to the organization because they clearly understand their roles of leading the organization to success (Mahrokian et al., 2010, 17).

The Effect of Corporate Culture on Corporate Reputation

Fombrun (1996) suggests cultural aspects of reputation. He states that such values as credibility, reliability, trustworthiness, and responsibility are the core of the perceptual representation of a company’s reputation (Kowalczyk and Pawlish, 2002, 163).

Research MethodologyThe purpose of the study is to examine within

105 employees how weak and strong corporate culture affects corporate reputation. The main hypothesis reflects that organizations with strong culture have positive effect on their corporate reputation.

ParticipantsThe study was conducted with 105 employees

in different sectors, Turkey. The majority of the participants are female (%65,2), between 41 and above ages (%43,2). Most of the respondents have undergraduate degree (%73,9). In terms of work experience, 38 of them have 21 and above years of total tenure, 38 of them have 1-5 years tenure at present job. %49,4 of participants have managerial positions.

MeasuresData were collected using a 44- item

questionnaire via e-mail containing a link to the online Internet Survey Instrument to the 105 employees in different sectors. The questionnaire was constructed to assess 2 variables (corporate culture and corporate reputation) and demographic characteristics as position, age, gender, total tenure, tenure at current job and position.

MeasuresCorporate Culture

The scale consists of 16 items which was developed by Richard Pascale (1984). Cultures are categorized by strong, intermediate and weak. Such items are used as ‘‘Reward systems, performance incentives, promotion criteria and other primary measures of success reflect a high degree of congruence’’, ‘‘Employees frequently make personal sacrifices for the firm out of commitment to the firm’s shared value’’. Responses were given on a scale ranging from 1 (Never agree) to 5 (Completely agree).

MeasuresCorporate Reputation

The Corporate Reputation scale consists of 28 items which was developed by Walsh and Beatty (2007). There are five dimensions as customer orientation, good employer, reliable and financially strong company, product and service quality, and social and environmental responsibility. Such items are used as ‘‘treats its customers fairly’’, ‘‘offers high quality products and services’’. Responses were given on a scale ranging from 1 (Never agree) to 5 (Completely agree).

Reliability AnalysisFor the reliability analysis of the scale used in

this study, the most frequently used Cronbach alpha coefficiency was examined. The Cronbach alpha coefficiency of the scale in this study is higher than the commonly accepted .60 The cronbach alpha value of corporate culture

was found as ,721The cronbach alpha value of corporate

reputation was found as ,927

Descriptive StatisticsAccording to the results of the descriptive

statistics, mean and standard deviation for the work-family conflict and family-work conflict variable were found as 2,95 and ,54; 3,47 and ,65.

Test of the HypothesisCorporate culture is correlated with

corporate reputation (r=, 437). As a simple regression model, corporate

culture have effect significant effect on corporate reputation (B= ,437; p=, 002).

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