Exploring the Impact of Social Axioms on Firm Reputation: A Stakeholder Perspective
| Published date | 01 April 2016 |
| Author | Carola Hillenbrand,Bettina West,Kevin Money,Abby Ghobadian,R. Duane Ireland |
| Date | 01 April 2016 |
| DOI | http://doi.org/10.1111/1467-8551.12153 |
British Journal of Management, Vol. 27, 249–270 (2016)
DOI: 10.1111/1467-8551.12153
Exploring the Impact of Social Axioms on
Firm Reputation: A Stakeholder Perspective
Bettina West, Carola Hillenbrand,1Kevin Money,1Abby Ghobadian2
and R. Duane Ireland3
Ted Rogers School of Management, Ryerson University, 350 Victoria Street, Toronto, ON, Canada, M5B 2K3,
1The John Madejski Centre for Reputation, University of Reading, Greenlands, Henley-on-Thames RG9 3AU,
Oxfordshire, UK, 2School of Leadership and OrganisationalBehaviour, University of Reading, Greenlands,
Henley-on-Thames RG9 3AU, Oxfordshire, UK, and 3Mays Business School, Department of Management
Texas A&M University,4221 TAMU, College Station, TX 77843-4221, USA
Corresponding author email: bwest@ryerson.ca
This study proposes a model of how deeply held beliefs, known as ‘social axioms, mod-
erate the interaction between reputation, its causes and consequences with stakeholders.
It contributes to the stakeholder relational field of reputation theory by explaining why
the same organizational stimuli lead to dierent individual stakeholder responses. The
study provides a shift in reputation research from organizational-level stimuli as the root
causes of stakeholder responses to exploring the interaction between individual beliefs
and organizational stimuli in determining reputational consequences. Building on a con-
ceptual model that incorporates product/service quality and social responsibility as key
reputational dimensions, the authors test empirically for moderating influences, in the
form of social axioms, between reputation-related antecedents and consequences, using
component-based structural equation modelling (n =204). In several model paths, sig-
nificant dierences are found between responsesof individuals identified as either high or
low on social cynicism, fate control and religiosity. The results suggest that stakeholder
responses to reputation-related stimuli can be systematically predicted as a function of
the interactions between the deeply held beliefs of individuals and these stimuli. The au-
thors oer recommendations on how strategic reputationmanagement can be approached
within and across stakeholder groupsat a time when firms grapple with eective manage-
ment of diverse stakeholder expectations.
Introduction
Recent advances in the study of reputation have
explored the causes and consequences of reputa-
tion within the dynamics of stakeholder relation-
ships (Lange, Lee and Dai, 2011; Rindova et al.,
2005; Walsh et al., 2009). Scholars have focused
on understanding causes in terms of which orga-
nizational stimuli contribute to the development
of reputation, and consequences in terms of sup-
portive or unsupportive stakeholder behaviours
(Brammer and Pavelin, 2006; Doh, Lawton and
Rajwani, 2012; Hillenbrand, Money and Ghoba-
dian, 2013). While these studies oer insights into
the nature and value of reputation (Carroll, 2012;
Peloza and Shang, 2011; Rindova, Petkova and
Kotha, 2007; Sridhar, 2012), one observation re-
mains puzzling: When assessing reputation, the
same organizational stimuli frequentlylead to var-
ied outcomes from individual stakeholders, both
within and across demographic, geographic and
cultural profiles (Bhattacharya and Sen, 2004;
Walker, 2010). Current reputation theory does not
explain this phenomenon, perhaps because stake-
holders are often viewed in terms of functional
groups, such as customers, employees or suppli-
ers, and expected to respond identically within
these groupings (Adams, Highhouse and Zickar,
© 2016 British Academy of Management. Published by John Wiley & Sons Ltd, 9600 Garsington Road, Oxford OX4
2DQ, UK and 350 Main Street, Malden, MA, 02148, USA.
250 B. West et al.
2010; Du, Bhattacharya and Sen, 2007; Jacobs,
Singhal and Subramanian, 2010; Lange, Lee and
Dai, 2011; Mitchell, Agle and Wood, 1997). What
is missing from current reputation theory is an
understanding of the mechanisms by which in-
dividuals respond dierently to the same sets
of organizational stimuli, irrespective of stake-
holder group association (Newburry, Gardberg
and Belkin 2006). We address this gap by propos-
ing and testing a model that suggests stakeholder
responses to reputation-related stimuli are more
usefully predicted as a function of the interac-
tion between individuals’ deeply held beliefs and
reputation-related organizational stimuli, rather
than by organizational stimuli alone.
This study examines an intriguing question:
Why do the same reputation-related stimuli lead
to dierent individual outcomes? Insights from
cognition studies suggest that socio-cognitive pro-
cesses oer a fruitful avenue for theoretical de-
velopment in the reputation domain in terms of
understanding how individual stakeholders define,
evaluate and respond to firm activities (Aguilera
et al., 2007; Bitektine, 2011; Mishina, Block and
Mannor,2012, p. 459; Money et al., 2012). We the-
orize that belief-based variables known as social
axioms (SA) probably moderate stakeholder re-
sponses to reputation-related stimuli. Leung et al.
(2002) describe SA as deeply held, generalized be-
liefs about the world. Similar to mathematical ax-
ioms, they arebasic premises used by individuals to
make sense of and respond to events (Bond et al.,
2004b; Fraser and Gaskell, 1990). While not sci-
entifically proven as truths, these beliefs become
deeply engrained through personal life experiences
and the socialization process (Singelis et al., 2003).
In contrast to specific beliefs that label a unique
context, time or actor, SAs are more abstract and
thus likely to influence a wider range of social re-
sponses. According to Hui and Hui (2009, p. 27),
‘dierent levels of SA mayimpose dierent subjec-
tive meanings upon the same situations,and hence,
create dierent realities leading to diverse psycho-
logical outcomes’.
Recent global investigations testify to the ro-
bustness, distinctiveness and predictive relevance
of the SA construct and have led to a growing con-
sensus of their potential application across dier-
ent contexts (Bond et al., 2004a). In this study, we
build on the work of Leung et al. (2002) to oer
testable propositions regarding the impact of the
five established SA dimensions (social cynicism,
fate control, religiosity, reward forapplication and
social complexity) on the mechanisms by which
stakeholders respond to reputation-related stimuli.
In summary,our study advances the stakeholder
relational field of reputation theory by exploring
how SAs predict stakeholders’ varied responses
to the same reputation-related stimuli. We pro-
vide new application of individual dierences and
cognition to the study of reputation, answering
calls for advances to reputation theory that in-
crease predictive power and understanding of the
mechanisms that lead to stakeholder support
(Bitektine, 2011). We also contribute to reputa-
tion management practice by making unexpected
consequences of a firm’s strategic activities more
predictable, thereby improving the eectiveness of
strategic planning and stakeholder management
(Hutschenreuter and Groene, 2009).
Theoretical background
The extant literature identifies firm reputation as
critical to firm success (Chun, 2005; Fombrun,
Gardberg and Sever, 2013; Rindova et al., 2005;
Wal sh et al., 2009). However, as the seminal works
by Chun (2005) and Brown et al. (2006) explain,
no single theory of reputation exists, but multi-
ple emerging streams of thought. Brown et al.
(2006) dierentiate between the related constructs
of identity, intended image, construed image and
reputation, outlining the central, enduring and
distinctive elements of each. The authors de-
scribe reputation as ‘mental associations aboutthe
organization actually held by others outside the
organization’ (Brown et al., 2006, p. 102). Impor-
tantly, these mental associations serve as an indi-
vidual stakeholder’s ‘reality’ of the organization,
thus signalling the individual-based characteristics
and consequences of reputation.
Chun (2005) partitions existing reputation liter-
ature into three schools of thought: evaluative, im-
pressional and relational. The evaluative school,
rooted in strategy and economics, assesses reputa-
tion from a shareholder perspective, while the im-
pressional and relational schools draw on wider
organizational studies involving a range of inter-
nal and external stakeholders. Importantly, Chun
(2005) suggests that newer conceptualizations of
reputation typically include multiple stakeholders’
perceptions, representing a multidimensional con-
struct, and identifies Fombrun’s (1996) work as
© 2016 British Academy of Management.
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