Empirical Research
The external shareholders’ impressions regarding corporate reputation in educational organizations
By Turgut Karakose, PhD
Feb 13, 2008 - 12:51:17 PM

Educational Administration and Planning, Faculty of Education Dumlupinar University, Turkey. E-mail: tkarakose@yahoo.com Abstract Capital magazine was the first that put forward the subject of corporate reputation in Turkey. But, among surveys which have been made regarding corporate reputation, there is no study directly related to educational organizations in Turkey. So, this study is the first research regarding corporate reputation in educational organizations. This survey examines parents and principals’ impressions regarding reputation of schools and it determines the differences between their impressions. Descriptive survey research has been used in this study. The sample consists of 253 parents and principals from city of Kahramanmaras, a province located in the southern part of Anatolia. Finally, participants commonly declared that either public or private schools had a good reputation and if schools satisfy social stakeholders’ expectations, they could have a good reputation in society. Keywords: Corporate reputation, impressions, effectiveness, educational organizations, development, principal and parent.

Introduction

Reputation of a man is built, improves and even gets damaged in society. Reputation of organizations also improves and gets damaged in society. Corporate reputation takes a long time to gain, but it could be lost in a short time. Building, improving and protecting reputation is different from one another. Each one of these topics requires different ability and strategy.

The word reputation was defined by researchers at different forms. Some of them could be defined as follows: Reputation as the regard, favourable or not, is shown for a person or thing by the public, community (Marconi 2001, 20). Reputation is perception of public and it is a valuable yet costly asset and it takes both financial investments and time to develop (Green 1996, 21; Kotha et al 2001, 573).

Reputation of a man is like is shadow, gigantic when it precedes him and pygmy in its proportions when it follows. (Marconi 2001, 19). A good reputation is so important to the success of an organization that it deserves the same attention given physical, financial and intellectual assets. A good reputation is a great competitive advantage. Reputation will influence an organization’s ability to attract customers and employees and to get the support of other stakeholders (http://www.osbornegroup.com/reputationmanagement%20.html).

A good reputation can create barriers to competition and inhibit the mobility of rival companies, attract the best supply chain and business partners, create a premium value for a company’s products and services (Sherman 1999, 10). On the one hand, reputation is valuable; it has bottom-line effects on firms. On the other hand, reputation buffers firms from the immediate reaction of stakeholders in their environment when controversial events occur (Schultz et al 2000, 79).

Corporate reputation is the result of a signalling activity based on available information about actions of a firm. Reputation is also a yardstick of the firm’s relative standing routinely used by both internal and external stakeholders when making firm related decisions. However, reputation is not only formed by the information signals sent by a firm or other information intermediaries, but also the stakeholders’ perceptions and interpretations of the firm’s actions form corporate reputations (Dentchev & Heene 2003, 2).

Background

A company’s reputation is important because it affects the way its various stakeholders behave towards it. This applies in equal measure to employees, investors, customers and the general public and influences such key issues as employee retention, customer satisfaction, and customer loyalty and investor relations. (Brotzen 1999, 54). Favourable reputations produce tangible benefits. A favourable reputation can deliver premium prices for products, lower costs of capital and labour, a buffer zone of goodwill in the event of crisis, and improved loyalty from employees and customers (Kumar 1999, 25).

The aspects of reputation specified in the Fortune survey are as follows (Bromley 1993, 175–176): quality of management, quality of products and services, long-term investment value, innovativeness, financial soundness, ability to attract, develop and keep talented people, community and environmental responsibility, and use of the corporate assets. In addition to this, Rob van Tulder from the Rotterdam School of Management has developed a model to explain how reputation is constructed. He envisages the “reputation temple” where the temple pillars are based on the six ingredients of reputation (CSR Magazine 2003):

v Financial performance: competitiveness, profitability, investment risks and growth perspectives

v Emotional appeal: respect, admiration, and trust

v Vision and leadership: qualities of management

v Workplace environment: work atmosphere, culture and environment

v Social responsibility: corporate social responsibility

v Products and services: appeal and quality of products and services, quality and innovation.

Various studies have shown that different stakeholders prioritise corporate reputation characteristics in different order: For example– not surprisingly- while investor’s belief in financial performance is one of the most important characteristic, the quality of services and products together with customer service are among the highest priorities (Brotzen 1999, 54). Trust is at the root of almost any economic or personal interaction. We need to trust the government, the credit card company, and the car dealer. Trust, loosely defined as the expectation of trustworthy and cooperative behaviour of others, impacts the performance of all social institutions, including firms, and thus the overall economic performance of a country (Keser 2003, 498).

At this period, in which information improves and changes rapidly, educational organizations must adapt to this change and furthermore their corporate reputation must be managed effectively. As in all organizations, reputation also takes a long time to build in educational organizations but it could be damaged in a short time. If the protecting measures aren’t taken by administrators in the beginning, probably corporate reputation will be damaged easily. So trust must be built between social stakeholders and organization.

Education is a social institution. Social institution is a concept which is explained as a tissue of relations among people. The goal of a society is to live forever. Education institution is one of the most important of these social institutions (Basaran 1996, 150). The primary goal of schools is to educate students. And the fundamental purpose of education reform is to improve students’ outcomes. Every element of the educational system has come under scrutiny to identify what can be done to enhance its contribution to improving student outcomes (Mitchell 1995, 201).

In the light of international researches (www.harrisinteractive.com; Bromley 1993; www.morrisseyco.com/survey; Westcott 2005; Brotzen 1999; CSR Magazine 2003; Kumar 1999) which are related to corporate reputation; we can develop that reputation of educational organizations (schools) as seven dimensions. Seven important dimensions which are regarding corporate reputation of schools could be expressed as follows: quality of services (training), quality of management, financial soundness, workplace environment, social responsibility, emotional appeal, and corporate ethics. A likert-type scale, which was derived from the literature and similar researches, was improved by the researcher and it consists of 40 items that connected seven dimensions of corporate reputation. When we look at Table 1, we can see the dimensions and opinions regarding corporate reputation of educational organizations.

Table 1. Dimensions and opinions regarding reputation of educational organizations

Table 1. continued

Review of Related Literature

Interest in reputation in the USA grew rapidly in the 1990s. Following the lead of Fortune magazine’s ‘Most Admired Corporations’ survey, magazines and public interest groups began evaluating corporations and presenting their findings to the public. Executives began to pay attention to their reputations. Academic research examined how corporate reputation could be a strategic resource that improved a firm’s financial performance (Deephouse 2002, 9).

There are lots of international researches regarding corporate reputation (Bin Yu & Singh 2002; Gupta & Somani 2004; Kotha et al 2001). Some of these are based on web sites. Nevertheless, there are a few studies by “Reputation Institute” that researched corporate reputation of organizations (Westcott 2005; Murray & White 2004). In these studies, reputations of organizations were measured. During reasearch, these criterions were used to determine reputation: financial performance, emotional appeal, vision and leadership, workplace environment, social responsibility, products and services. International researches demonstrate that corporate reputation affects staff’s productivity, at the same time staff also affect corporate reputation in organizations.

Capital magazine was the first that put forward the subject of corporate reputation in Turkey. ‘Most Admired Corporations of Turkey’ survey was made by Capital magazines in 1999. But among surveys which have been made regarding corporate reputation, there is no study directly related to educational organizations in Turkey. So this study is the first research regarding corporate reputation in educational organizations in Turkey.

Purpose of the Study

This article investigates external shareholders’ (parents and principals) impressions regarding reputation of the school and determines the differences between these impressions. For this aim, these questions were developed by researcher to determine parents and principals’ impressions regarding reputation of the school. These questions guiding the research were:

How is the parents and principals’ impression regarding corporate reputation of private school?

Are there any significant differences according to (a) gender (b) job among the parents and principals’ impressions related to corporate reputation of private school?

How is the parents and principals’ impression regarding corporate reputation of public school?

Are there any significant differences according to (a) gender (b) job among the parents and principals’ impressions related to corporate reputation of public school?

Methodology

This survey examines parents of external shareholders’ (parents and principals) impressions regarding reputation of the school and it determines the differences between these impressions. Descriptive survey research has been used in this study. The sample consists of 157 parents and 96 principals from the schools in the city of Kahramanmaras, a province located in the southern part of Anatolia. Data were collected by using a questionnaire which was derived from the literature and similiar research in the 2005–2006 educational seasons and were analysed by using SPSS software. A likert-type scale was developed by the researcher and it consists of 40 items that are related to seven dimensions of corporate reputation. Responses to each item have been marked using a five-point likert-type scale ranging from “totally agree” to “totally disagree”. Likert-type scale was graded as totally agree = 4.21–5.00; agree = 3.41–4.20; no comment = 2.61–3.40; disagree = 1.81–2.60; totally disagree = 1.00–1.80. A main test to establish reliability and validity has been administered to 157 parents and 96 principals selected randomly from the target population. Cronbach alpha of the scale was used at main test is .93 and Kaiser-Meyer-Olkin Measure of Sampling Adequacy is .93. The following criteria have been used: when the mean value is calculated equal to p<.05 or higher, the attitude is accepted significant; however, when the mean value is calculated lower than p<.05, the attitude is accepted meaningless. Data were analyzed in terms of frequencies, percentages, means, standard deviations, t-test statistical techniques.

Results and Discussion

When we look at Table 2, we realize that 66.1 % of participants are male and %33.99 are female and the total number of participants is 253 subjects selected from specimen. The sample of this study includes 96 (% 37, 94) principals employed in the private and public elementary schools and 157 (% 62, 06) parents in private and public schools.

Table 2. Personal information about the participants

According to gender variable, some of the major findings are as follows: If parents and principals’ perception in private school are evaluated as a whole, except for perceptions related to quality of management at the determined corporate reputation, gender variable has no effect. It is ascertained that there is a statistically significant difference (p<0.05) between parents and principals’ impressions regarding quality of management of private school. Table–3 shows that participants thought positive about all dimensions of corporate reputation at the private school. In the light of these results, we can easily say that the private school has a good reputation.

Table 3. The results of the t test and mean points of the participants according to gender variable regarding corporate reputation of private school

* Significant at p< 0.05 DF: 106

The results of analysis revealed that there were significiant differences statistically between parents and principals’ impressions related to social responsibility and emotional appeal, nevertheless, gender variable had no effect on the other dimensions of corporate reputation in public school. As can be seen from Table 4, significant differences (p< 0.05) were found between parents and principals’ impressions at the social responsibility and emotional appeal. This result shows that female participants thought more positively than male participants related to these two dimensions of corporate reputation. Accordingly, we can say that participants commonly declared that the public school has good reputation.

Table 4. The results of the t test and mean points of the participants according to gender variable regarding corporate reputation of public school

* Significant at p< 0.05 DF: 147

According to job variable, no significant differences were found between parents and principals’ impressions regarding dimensions of quality of services, quality of management, financial soundness, workplace environment, social responsibility in public school. But the only difference (p< 0.05) was found between parents and principals’ impressions regarding emotional appeal and corporate ethics. This signifies that parents believe that private school generally has a good reputation; in other words, parents think more positively than principals related to reputation of the private school. These results show that private school has a fine reputation in the society.

Table 5. The results of the t test and mean points of the participants according to job variable regarding corporate reputation of private school

* Significant at p< 0.05 DF: 106

According to job variable, no differences were found between parents and principals’ impressions related to dimensions of reputation in public school; nevertheless, the only difference (p< 0.05) was found at the dimension of emotional appeal. Parents have more favorable thoughts than principals regarding emotional appeal of the school. These data demonstrate that public school in general has a good reputation in the society.

Table 6. The results of the t test and mean points of the participants according to job variable regarding corporate reputation of public school

* Significant at p< 0.05 DF: 147

Conclusion

The results of this study could be summarized as follows:

According to gender variable, there is a significant difference between male and female participants’ impressions regarding quality of management in private school. This conclusion shows that male participants thought more affirmative compared to female participants. In other words, men explained that the school had a good reputation.

Also, according to gender, there are statistically significant differences between men and women’s perceptions related to dimensions of social responsibility and emotional appeal in public school. That is, women thought more positively than men regarding corporate reputation of school.

According to job variable, there is significiant difference statistically between parents and principals’ impressions related to dimension of emotional appeal in private school. Parents thought more positively than principals related to emotional appeal. Besides, significant differences were found between parents and principals’ impressions related to dimension of corporate ethics and emotional appeal in private school.

While determining corporate reputation, if participants’ perceptions in public school are evaluated as a whole, except for perceptions related to emotional appeal, job variable had no effect. According to job variable, significant differences were found between parents and principals’ impressions regarding emotional appeal of public school, but the same statement cannot be said for the other dimensions. In brief, parents have positive ideas about the reputation of public school.

Recommendations

Finally, based on the the results of this research these can be proposed:

Principals are responsible for managing corporate reputation of the school, so they should be educated by administrative experts regarding corporate reputation management.

Parents and principals’ expectations are different from one another. For reputation of school, it’s so important to adapt shareholders’ expectations to organizational goals.

Parents and principals’ perceptions related to reputation of the school should be managed effectively. Accordingly, a functional communication plan should be made by principals in schools.

Image of the school and social stakeholders’ expectations should be determined by the school correctly. We can easily say that if schools satisfy social stakeholders’ expectations, they could have a good reputation in society.

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