Organizational Reputation in the Public Sector

Arild Wæraas, Moshe Maor, Arild Wæraas, Moshe Maor

• Publisher: Taylor & Francis
• Year: 2014
• eBook ISBN: 9781317913849
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

A favorable reputation is an asset of importance that no public sector entity can afford to neglect because it gives power, autonomy, and access to critical resources. However, reputations must be built, maintained, and protected. As a result, public sector organizations in most OECD countries have increased their capacity for managing reputation. This edited volume seeks to describe, explain, and critically analyze the significance of organizational reputation and reputation management activities in the public sector.

This book provides a comprehensive first look at how reputation management and branding efforts in public organizations play out, focusing on public agencies as formal organizations with their own hierarchies, identities, and cultures – existing in a network of other public organizations with similar or different functions, power, and reputation. From this unique organizational perspective, the chapters in this volume examine issues such as organizational identity, power, conflict, politics, culture, and symbolism within the public sector. Paying specific attention to strategies and processes, and illustrating with examples from the countries of Belgium, Denmark, Norway, Ireland, Israel, Italy, and Sweden, the book deepens our understanding of reputation management efforts at various levels of government.

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Understanding Organizational Reputation in a Public Sector Context

Arild Wæraas and Moshe Maor

Introduction

When the term reputation is used about public sector organizations, the connotation that most likely comes to mind is ‘bad.’ Because government organizations have been associated with negatively charged words such as inefficiency, bureaucracy, waste, incompetence, and rigidity for so long, it is hard to imagine that public entities would have an interest in improving and protecting their reputation at all. However, as this book will emphasize, public entities are in fact concerned with their reputations and have begun to implement measures to nurture, maintain, and protect them. Research from multiple countries and institutional contexts presents mounting evidence that public sector organizations have become more cognizant of the value of a favorable reputation and, as a result, are gradually treating the management of reputation as a concern of strategic importance. The definition of unique competencies, development of communication strategies, careful timing of decisions, use of reputation-management consultants, and systematic use of media training and reputation measurement indices are only some of the visible activities that attest to the assumed importance of cultivating a favorable reputation.

The notion that public sector organizations benefit from a favorable reputation is not original. As noted by Carpenter and Krause (2012), reputation is discussed in several classic texts, including Simon, Smithburg, and Thompson ([1950] 1991); Kaufman (1981); and Wilson (1989). A more systematic, theoretical, and empirical focus did not emerge until after the millennium shift through the works of Carpenter (2001, 2002). Along with subsequent contributions (Carpenter 2010; Carpenter and Krause 2012; Gilad and Yogev 2012; Maor 2007, 2010, 2011; Gilad, Maor, and Ben-Nun Bloom 2013; Maor, Gilad, and Ben-Nun Bloom 2013; Maor and Sulitzeanu-Kenan 2013, 2014; Moffitt 2010; Picci 2011; Wæraas and Byrkjeflot 2012), these works form an emerging field of research that is not concerned with the general standing of political bodies or the public sector as a whole. Instead, the field draws attention to the reputation of individual administrative entities that behave more or less as autonomous actors within the political-administrative system. Although these entities are not all competing with each other, all of them can be assumed to benefit from cultivating and protecting a favorable reputation. These entities include bureaucratic organizations such as executive departments and ministries, central and local government agencies and units, regulatory agencies at various levels, public health care institutions, and educational institutions.

The benefits of enjoying a favorable reputation in the public sector context and the growing interest of public sector organizations in managing their reputation provide important background for this book. Our knowledge of these topics and their implications is limited. Compared to the field of corporate reputation, which has its own conference (The International Conference on Corporate Reputation, Brand Identity, and Competitiveness) and its own academic journal (Corporate Reputation Review), the field of reputation that pertains specifically to public bureaucracies is currently an emerging and immature, yet promising, field of research. Given that we currently find ourselves in a “reputation society” (Masum and Tovey 2011)—where decision making is characterized by increasing emphasis on track records—scholarly attention to the reputation of public sector organizations is warranted. How reputations are formed, how they are built and protected, and how they matter are only some of the key questions that need to be addressed in more detail. By searching for answers to these questions, it is our hope that this book will provide the basis for a more coherent field of research.

In the remaining sections of this chapter, we discuss the concept of reputation as it has been defined in business studies. We then give a more detailed introduction to the existing research on organizational reputation in the public sector, followed by a presentation of the various contributions in this volume.

What is Organizational Reputation?

Despite the considerable amount of scholarly work published on organizational reputation, researchers are still debating its meaning. Definitions and uses are at times quite divergent, and reputation can easily be conflated with related concepts such as image, prestige, legitimacy, and status (Deep-house and Suchman 2008; Dutton and Dukerich 1991; Rindova, Pollock, and Hayward 2006). This terminology confusion creates a challenge for researchers who seek to describe and analyze the significance of reputation and reputation management in the private as well as the public sector. The picture becomes even more complex when considering that the concept of reputation is approached from a variety of academic disciplines. Fields such as corporate communication, strategy, management, marketing, economics, and organization studies investigate different aspects of reputation, each with their own traditions of doing research and analyzing the phenomenon (Lange, Lee, and Dai 2010; Rhee and Valdez 2009; Rindova et al. 2005; Walker 2010).

In a review of 54 articles published on reputation, Walker (2010) finds that Fombrun’s definition of reputation from 1996 is more frequently referenced than other definitions. Fombrun (1996, 72) defined reputation as a “collective representation of a firm’s past actions and results that describe the firm’s ability to deliver valuable outcomes to multiple stakeholders.” According to Walker, Fombrun’s definition emphasizes that reputation is (1) based on perceptions, (2) the aggregate perception of all stakeholders, and (3) comparative. Walker (2010) adds two additional dimensions: Reputation is (4) either positive or negative and (5) stable and enduring. Similarly, Deephouse and Suchman (2008) note that reputation is fundamentally (1) a continuous measure, by placing each actor on a continuum from worst to best; (2) rival, in the sense that an organization’s reputation can increase only at another organization’s expense; (3) differentiating, in the sense that reputation encourages organizations to distinguish themselves from their peers; and (4) economic, in the sense of being a strategic resource that contributes to competitive advantage. Fombrun (2012, 100) refines his own 1996 definition in the following way: “A corporate reputation is a collective assessment of a company’s attractiveness to a specific group of stakeholders relative to a reference group of companies with which the company competes for resources.” With this definition, Fombrun accentuates the comparative and competitive nature of reputation (c.f. Deephouse and Suchman 2008).

Different theoretical perspectives highlight the multifaceted aspects of reputation. Definitions tend to fall into one of three overarching perspectives: the economics, social constructivist, and institutional perspectives (Rindova and Martins 2012): From the economics perspective, reputation is formed among stakeholder groups as a result of actions chosen by the organization. Organizations signal their ‘true’ attributes through these actions, forming reputations with “specific stakeholders regarding specific characteristics” (Noe 2012, 116). Their reputation is a valuable asset or resource that enables them to achieve positive outcomes. As they decide which actions to take vis-à-vis their stakeholders to reach these outcomes, they are assumed to be able to control their own reputational signals. Organizations are players in a market and rely on these signals to judge and predict each other’s competitive abilities and economic behavior (Weigelt and Camerer 1988).

From the social constructivist perspective, reputation refers to more than lower-level, attribute-specific perceptions. Organizational reputation is analyzed at the collective stakeholder level and is understood as a socially constructed aggregate product (Power 2007; Rao 1994; Rindova and Mar-tins 2012; Rindova, Pollack, and Hayward 2006), referring to collective knowledge or recognition rather than an assessment of a relevant attribute. From this perspective, reputations are derived not only from the actions of organizations but also from social interactions between stakeholder groups. As stakeholders and organizations interact, a range of information, meanings, and interpretations is created, shared, and confirmed. Consequently, in contrast to the economics perspective, the social constructivist perspective assumes that organizations have a lower degree of control over their own reputation.

The institutional perspective shares the social-constructivist view that reputation is associated with collective knowledge and recognition, but emphasizes the larger macro-cultural context in which organizations compete and from which reputations develop (Fombrun 2012). Powerful institutional intermediaries within organizational fields such as monitoring organizations, the media, and financial analysts are important sources of reputation formation by disseminating ‘objective’ information about organizational attributes (Elsbach and Kramer 1996; Rindova and Martins 2012). Reputations refer to organizations’ relative positions in rankings created by these intermediaries. The institutional perspective calls attention to these relative positions by, for example, highlighting the various responses undertaken by organizations when they perceive their position to be incorrect or unjustified (Elsbach and Kramer 1996; Martins 2005).

Research on Organizational Reputation in the Public Sector

All three perspectives on reputation can be identified in the literature on bureaucratic and administrative reputation. Two main research traditions have emerged: the political science and the organizational. Whereas the first shares notable viewpoints with the economics perspective on reputation, the other is inspired by the social constructivist and institutional perspectives.

The political science approach focuses empirically on executive agencies and their standing within a political-administrative system (Carpenter 2001, 2010; Gilad and Yogev 2012; Maor 2007, 2010, 2011, 2014; Maor, Gilad, and Ben-Nun Bloom 2012; Maor and Sulitzeanu-Kenan 2013, 2014; Moffitt 2010). In this approach, there are no disagreements among scholars over Carpenter’s (2010, 45) definition of organizational reputation as “a set of symbolic beliefs about the unique or separable capacities, roles, and obligations of an organization, where these beliefs are embedded in audience networks.” “Reputation uniqueness” according to Carpenter (2001, 5) refers to the demonstration by agencies that they can create solutions (e.g., expertise, efficiency) and provide services (e.g., moral protection) found nowhere else in the polity. Reputations provide governmental agencies with decisive benefits on top of their formal authority and powers. Reputations “are valuable political assets—they can be used to generate public support, to achieve delegated autonomy and discretion from politicians, to protect the agency from political attack, and to recruit and retain valued employees” (Carpenter 2002, 491).

The theoretical premise of studies within this tradition is that governmental agencies are generally rational and politically conscious organizations. The derived research examines how agencies’ strategic balancing of their overall reputations is undertaken through their response to reputational threats based on their understanding of their distinct reputations. Suffice to mention that studies demonstrate that executive agencies endogenously construct their jurisdictions (Maor 2010), the public visibility of their errors (Maor 2011), and their decision duration insofar as regulatory enforcement is concerned (Maor and Sulitzeanu-Kenan 2013). Recently, studies have been directed at how agencies’ strategic balancing of their overall reputations is undertaken through their selective response (i.e., choice between levels of a particular type of response) or differential response (i.e., choice between types of responses) to certain external signals. This stream of research tries to show how reputational concerns translate into actions by governmental agencies, by focusing on the internal shaping of administrative organizations’ uneven responsiveness to—and management of—their multiple audiences. Findings show how agencies tend to keep silent regarding issues on which they generally enjoy a strong reputation and on issues that lie outside their distinct jurisdiction, while responding to opinions about core functional areas in which their reputation is weaker and areas wherein their reputation is still evolving (Maor, Gilad, and Ben-Nun Bloom 2013). This is a classic example of a selective response. Regarding differential response, Gilad, Maor, and Ben-Nun Bloom (2013) highlight how agencies have a greater propensity to acknowledge problems, yet mostly shift blame to others when faced with claims that regulation is overly lenient (namely, underregulation), and to deny allegations that regulation is excessive. And Maor and Sulitzeanu-Kenan (2014) demonstrate that the effect of negative media coverage on agency outputs is moderated by the level of previous-year agency outputs, i.e., negative coverage is followed by an increase in agency outputs when previous year outputs are below average and a decrease in agency outputs when previous year outputs are above average. These two types of agency response to reputational threats appear to be the result of the agency’s increased interest in change following reputational threats, which is channeled to activities that are internally identified as lagging (e.g., public relations during natural disasters, consumer engagement, or stakeholder consultation).

Works drawing on the organizational approach to reputation also focus on public agencies but tend to treat any public sector entity as an ‘organization’ in search of a stronger reputation, and reputation management as an ‘organizational’ and taken-for-granted prescription with allegedly universal validity ready to be installed in any context (Wæraas and Byrkjeflot 2012). Hence, the focus includes all kinds of administrative units in the public sector ranging from ministries and central government agencies (Luoma-aho 2007, 2008; Wæraas 2013) to public health care units (Arnold et al. 2003; Byrkjeflot and Angell 2007; Luoma-aho 2013; Wæraas and Sataøen 2014) to local government units (Nielsen and Salomonsen 2012; Kuoppakangas, Suomi, and Horton 2013; Ryan 2007) to higher education (Aula and Tienari 2011; Wæraas and Solbakk 2009). Furthermore, instead of focusing on specific attributes of reputation, the research within this tradition emphasizes the general standing of public organizations and the overall socially constructed and aggregate nature of reputation. Consequently, the rationality and degrees of freedom of the individual organization in controlling its own reputation are downplayed. In many cases, the starting point for analysis is the problematic reputation of a public sector entity, or the growing awareness of public sector entities in general ...

Table of contents

• Cover Page
• Half Title page
• Title Page
• Copyright Page
• Contents
• Foreword
• Preface
• 1 Understanding Organizational Reputation in a Public Sector Context
• Part I Theoretical Perspectives
• Part II Reputation Management in Central Government Agencies
• Part III Reputation Management in Local Government
• Contributors
• Index