The Linkages Among Firm Strategies, Firm Reputation, and Performance: A Three Essay Dissertation

Abstract

No one would question that firm reputation is a quality commonly ascribed to successful firms in the market. However, the premise of the relationship between firm reputation (FR) and firm performance (FP) has not been investigated systematically. The three essays aim to expand the theoretical understanding of firm reputation by investigating the relationships between (1) organizational strategies, (2) the different levels of reputation based on the perspectives of different stakeholder groups, and (3) firm performance.

Essay 1 reviews the antecedents and consequents of FR over the last three decades using a meta-analytic framework. The meta-analysis aims to provide insights into the following three key research questions: (1) Which antecedents are most influential for enhancing FR?, (2) Which consequents are most affected by FR?, (3) Which comes first, FR or FP? Moreover, different types of FR (internal versus external), different reputation measures (primary dataset versus secondary dataset), and different definitions of FR (assessment versus asset) are employed as moderators to provide more nuanced meta-analytical results and to identify the limitations of previous studies in FR. Essay 1 synthesizes the contradictory findings from the FR literature and helps reveal the true relationship between FR and FP (both financial and non-financial performance).

In essay 2, FR in two different markets (i.e., the B2B market and the B2C market) that deal with multiple stakeholder groups is defined. Using institutional theory, the study investigates the carry-over effects of FR between two different stakeholder groups (i.e., franchisees and consumers) and pinpoints how the opinions of one stakeholder group matter to the opinions of the other stakeholder group. In franchise systems, the value of goods and services is not only created by the firm that manufactures and supplies them, but also franchisees that bridge the link between the firm (franchisor) and consumers in the marketplace (Srivastava, Shervani and Fahey 1999). By examining the reciprocal carry-over effects of the two types of FR, essay 2 evaluates the relative merits of push and pulls strategies in a franchising context.

Essay 3 examines the linkages among firm strategies, firm reputation, and firm performance by integrating both agency theory and stakeholder theory. Essay 3 empirically tests whether franchisors' strategies of Standardization, Innovativeness, and Communication influence stakeholders' perceptions of performance of focal firms. Firm performance is conceptualized in terms of Satisfaction, Commitment, Word-of-Mouth (WOM) Intention, and Purchasing Intention between franchisors and their stakeholders. This study broadens the understanding of the roles of firm strategies and firm reputation in firm-stakeholder relationships. This broached the topic of how firms can maximize the welfare level of two distinct stakeholder groups through strategies focused on one particular stakeholder group. An investigation of the dynamics of firm strategies, firm reputation, and performance in the firm-stakeholder relationships can shed welcome light on our understanding of stakeholder management.

Three essays will further the theoretical understanding of FR by using a multi-level investigation approach to understanding firm reputation, and expanding our knowledge of the role of firm strategies in fostering reputation. This can also bridge the great divide that separates B2B and B2C scholarship by holistically encompassing the perspectives of franchisors, their franchisees, and the end consumers.