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Symbolic or Behavioral Management? Corporate Reputation in High-Emission Industries

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Abstract

In this paper, we identify two important approaches to corporation reputation building: symbolic management and behavioral management. Within the first approach, corporate communications are intended to generate positive impressions among ‘media audiences’. Within the second approach, corporate actions are changed to more closely align with the message being conveyed by corporation communications. Many corporate managers assume that the symbolic alignment between what is wanted by media audiences and what is said enhances corporate reputation and this, in turn, improves corporate profitability. In this paper, we tested the relative efficacy of the symbolic and behavioral management approaches to corporate reputation and profitability. We found that symbolic management had a positive effect on symbolic reputation, whereas behavioral management had a positive effect on performance reputation. We also found that a positive reputation in the media did not contribute to corporate profitability, whereas a positive performance reputation had a significant effect on profitability. We conclude that the behavioral management approach is more effective for reputation building and for contributing to profitability. We also discuss implications of our findings for reputation management and corporate performance.

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Notes

  1. From The Arab British Business Bulletin, 2005, Vol. 28, Issue 40.

  2. While symbolic and behavioral management approaches in reputation-building are concepts developed from the public relations literature, they are similar to symbolic and substantive management concepts in organization studies (Ashforth and Gibbs, 1990; Pfeffer, 1981).

  3. Social scientists have some fear or ‘prejudice’ against posing and testing null hypotheses (Cortina and Folger, 1998: 335). Greenwald (1993) called such fear and prejudice a ‘cultural truism’ and he ‘dismantled’ opinions against testing the null hypothesis. In defending the practice of posing and testing null hypotheses, Cortina and Folger (1998) further explained that null hypothesis testing is appropriate when (1) ‘predicting a null effect as a derivation from theory’ in advance – ie, a priori hypothesis derivation and (2) establishing boundary conditions for known effects – ie, design and test when significant effect can be found. In our study, we met the two essential conditions for null hypothesis testing. First, we postulate in advance a priori hypotheses regarding the ineffective paths from symbolic management to financial performance. In addition, we proposed and tested significant alternative hypotheses (ie, known effects) regarding the paths in behavioral management approach against the null hypotheses in the same testing model. Thus, we consider our null hypothesis testing approach justifiable.

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Acknowledgements

We would like to thank Pratima Bansal (University of Western Ontario) for her important assistance with measure construction and helpful comments on our conceptual development.

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Authors and Affiliations

  1. Department of Communication, College of Liberal Arts, Purdue University, West Lafayette, IN, USA

    Jeong-Nam Kim

  2. College of Business Administration, California State University, Sacramento, CA, USA

    Seung B Bach

  3. Department of Management, College of Business and Economics, Radford University, Radford, VA, USA

    Iain J Clelland

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  1. Jeong-Nam Kim
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  2. Seung B Bach
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  3. Iain J Clelland
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Kim, JN., Bach, S. & Clelland, I. Symbolic or Behavioral Management? Corporate Reputation in High-Emission Industries. Corp Reputation Rev 10, 77–98 (2007). https://doi.org/10.1057/palgrave.crr.1550042

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