ISSN: 2222-6990
Open access
This paper aims to explore the components of a firm reputation based on public information disclosure and its relationship with the stakeholder salience model. The firm reputation components are analysed using content analysis of the firm's annual report. The study collects data on the firm reputation components from 200 annual reports of Malaysian public listed companies over a period of 4 years (2016-2019). The results of the study found that there are seven (7) components that can be used to reflect on the firm reputational aspects as disclosed in the firm's annual report. The components include performance, product and service quality, innovation, workplace, governance, citizenship/CSR, and leadership. The findings also reveal three highest components which are product and service quality, performance, and workplace, are supported by the stakeholder salience theory. Our analysis provides evidence that power, legitimacy, and urgency become crucial attributes in determining the key stakeholders of the firms (customers, employees, and shareholders) when the firms have different types of stakeholders. Operatively, our evidence can help regulators, investors and researchers to better understand firm reputational components as per information disclosed by the firms, especially for the firms operating in developing and emerging markets. Further, this study is among the earliest that provide the interrelation between firm reputational dimension and stakeholder salience.
Aguilera-Caracuel, J., Guerrero-Villegas, J., & García-Sánchez, E. (2017). Reputation of multinational companies: Corporate social responsibility and internationalisation. European Journal of Management and Business Economics, 26(3), 329–346. https://doi.org/10.1108/EJMBE-10-2017-019
Ali, R., Lynch, R., Melewar, T. C., & Jin, Z. (2015). The moderating influences on the relationship of corporate reputation with its antecedents and consequences: A meta-analytic review. Journal of Business Research, 68(5), 1105–1117.
https://doi.org/10.1016/j.jbusres.2014.10.013
Almeida, M. D. G. M. C., & Coelho, A. F. M. (2019). The Antecedents of Corporate Reputation and Image and Their Impacts on Employee Commitment and Performance: The Moderating Role of CSR. Corporate Reputation Review, 22(1), 10–25. https://doi.org/10.1057/s41299-018-0053-8
Alwi, S. F. S., Ali, S. M., & Nguyen, B. (2017). The importance of ethics in branding: Mediating effects of ethical branding on company reputation and brand loyalty. Business Ethics Quarterly, 27(3), 393–422.
Arshad, R., Othman, S., & Othman, R. (2012). Islamic corporate social responsibility, corporate reputation and performance. International Journal of Economics and Management Engineering, 6(4), 643–647.
Barnett, M. L., Jermier, J. M., & Lafferty, B. A. (2006). Corporate Reputation: The Definitional Landscape. Corporate Reputation Review, 9(1), 26–38.
https://doi.org/10.1057/palgrave.crr.1550012
Busch, T., & Friede, G. (2018). The robustness of the corporate social and financial performance relation: A second-order meta-analysis. Corporate Social Responsibility and Environmental Management, 25(4), 583–608. https://doi.org/10.1002/csr.1480
Cade, N. L. (2018). Corporate social media: How two-way disclosure channels influence investors. Accounting, Organisations and Society, 68(March 2017), 63–79. https://doi.org/10.1016/j.aos.2018.03.004
Cantele, S., & Zardini, A. (2018). Is sustainability a competitive advantage for small businesses? An empirical analysis of possible mediators in the sustainability–financial performance relationship. Journal of Cleaner Production, 182, 166–176. https://doi.org/10.1016/j.jclepro.2018.02.016
Chen, T.-J. (2016). Corporate reputation and financial performance of life insurers. Geneva Papers on Risk and Insurance: Issues and Practice, 41(3), 378–397. https://doi.org/10.1057/gpp.2016.8
Fasaei, H., Tempelaar, M. P., & Jansen, J. J. P. (2018). Firm reputation and investment decisions: The contingency role of securities analysts' recommendations. Long Range Planning, 51(5), 680–692. https://doi.org/10.1016/j.lrp.2017.07.010
Fombrun, C. J. (1996), Reputation: Realising Value from the Corporate Image, Harvard Business School Press, Boston, MA.
Fombrun, C. J., and Shanley, M. (1990), "What's in a name? Reputation building and corporate strategy". Academy of Management Journal, 33(2), 233-58.
Fombrun, C. J., Ponzi, L. J., & Newburry, W. (2015). Stakeholder tracking and analysis: The RepTrak® System for measuring corporate reputation. Corporate Reputation Review, 18(1), 3–24. https://doi.org/10.1057/crr.2014.21
Freeman, R. E. (1984). Strategic management: A stakeholder approach. Boston: Pitman.
Freeman, R. E., Harrison, J. S., Wicks, A. C., Parmar, B., & de Colle, S. (2010). Stakeholder theory: The state of the art. Cambridge, UK: Cambridge University Press.
Gatzert, N., & Schmit, J. (2016). Supporting strategic success through enterprise-wide reputation risk management. Journal of Risk Finance, 17(1), 26–45. https://doi.org/10.1108/JRF-09-2015-0083
Harjoto, M. A., Hoepner, A. G. F., & Li, Q. (2022). A stakeholder resource-based view of corporate social irresponsibility: Evidence from China. Journal of Business Research, 144(February 2021), 830–843. https://doi.org/10.1016/j.jbusres.2022.02.025
Heidinger, D., & Gatzert, N. (2018). Awareness, determinants and value of reputation risk management: Empirical evidence from the banking and insurance industry. Journal of Banking and Finance, 91, 106–118. https://doi.org/10.1016/j.jbankfin.2018.04.004
Hörisch, J., Schaltegger, S., & Freeman, R. E. (2020). Integrating stakeholder theory and sustainability accounting: A conceptual synthesis. Journal of Cleaner Production, 275. https://doi.org/10.1016/j.jclepro.2020.124097
Hormiga, E., & Garcia-Almeida, D. J. (2016). Accumulated knowledge and innovation as antecedents of reputation in new ventures. Journal of Small Business and Enterprise Development, 23(2), 428–452. https://doi.org/10.1108/JSBED-03-2014-0038
Kaur, A., & Lodhia, S. (2018). Stakeholder engagement in sustainability accounting and reporting: A study of Australian local councils. Accounting, Auditing and Accountability Journal, 31(1), 338–368. https://doi.org/10.1108/AAAJ-12-2014-1901
Kaur, A., & Singh, B. (2019). Does Firm's Size Speak of Its Reputation? Indian Evidence. Global Business Review, 1–16. https://doi.org/10.1177/0972150918817394
Kaur, A., & Singh, B. (2020). Disentangling the reputation – performance paradox: Indian evidence. Journal of Indian Business Research, 12(2), 153–167.
https://doi.org/10.1108/JIBR-02-2018-0081
Kwon, H. B., & Lee, J. (2019). Exploring the differential impact of environmental sustainability, operational efficiency, and corporate reputation on market valuation in high-tech-oriented firms. International Journal of Production Economics, 211(December 2018), 1–14. https://doi.org/10.1016/j.ijpe.2019.01.034
Linder, C., & Seidenstricker, S. (2018). How does a component from a supplier with high reputation for product innovation improve the perception of a final offering? A process perspective. European Management Journal, 36(2), 288–299.
https://doi.org/10.1016/j.emj.2017.05.003
Linthicum, C., Reitenga, A. L., & Sanchez, J. M. (2010). Social responsibility and corporate reputation: The case of the Arthur Andersen Enron audit failure. Journal of Accounting and Public Policy, 29(2), 160–176. https://doi.org/10.1016/j.jaccpubpol.2009.10.007
Mitchell, R. K., Agle, B. R., & Wood, D. J. (1997). Toward a theory of stakeholder identification and salience: Defining the principle of who and what really counts. Academy of Management Review, 22(4), 853–886.
Mkumbuzi, W. P. (2015). Corporate governance and intangibles disclosure as determinants of corporate reputation. Asian Social Science, 11(23), 192–208.
https://doi.org/10.5539/ass.v11n23p192
Othman, S., Darus, F., & Arshad, R. (2011). The influence of coercive isomorphism on corporate social responsibility reporting and reputation. Social Responsibility Journal, 7(1), 118–135. https://doi.org/10.1108/17471111111114585
Park, E. (2019). Corporate social responsibility as a determinant of corporate reputation in the airline industry. Journal of Retailing and Consumer Services, 47(July 2018), 215–221. https://doi.org/10.1016/j.jretconser.2018.11.013
Raha, A., Hajdini, I., & Windsperger, J. (2021). A multilateral stakeholder salience approach: An extension of the stakeholder identification and salience framework. Industrial Marketing Management, 97(June), 1–9.
https://doi.org/10.1016/j.indmarman.2021.06.008
Roberts, P. W., & Dowling, G. R. (2002). Corporate reputation and sustained superior financial performance. Strategic Management Journal, 23(12), 1077–1093. https://doi.org/10.1002/smj.274
Rodriguez-Ariza, L., Martínez-Ferrero, J., & Bermejo-Sánchez, M. (2016). Consequences of earnings management for corporate reputation: Evidence from family firms. Accounting Research Journal, 29(4), 457–474. https://doi.org/10.1108/ARJ-02-2015-0017
Schaarschmidt, M., & Walsh, G. (2020). Social media-driven antecedents and consequences of employees' awareness of their impact on corporate reputation. Journal of Business Research, 117(December 2017), 718–726.
https://doi.org/10.1016/j.jbusres.2018.11.027
Tischer, S., & Hildebrandt, L. (2014). Linking corporate reputation and shareholder value using the publication of reputation rankings. Journal of Business Research, 67(5), 1007–1017. https://doi.org/10.1016/j.jbusres.2013.08.007
Velez-Ocampo, J., & Gonzalez-Perez, M. A. (2019). Analysing foreign expansion and corporate reputation: review and future research agenda. Cross Cultural and Strategic Management, 26(4), 586–608. https://doi.org/10.1108/CCSM-06-2019-0110
Vig, S., Dumicic, K., & Klopotan, I. (2017). The impact of reputation on corporate financial performance: Median regression approach. Business Systems Research, 8(2), 40–58. https://doi.org/10.1515/bsrj-2017-0015
Walker, K. (2010). A systematic review of the corporate reputation literature: Definition, measurement, and theory. Corporate Reputation Review, 12(4), 357–387. https://doi.org/10.1057/crr.2009.26
Wood, D. J., Mitchell, R. K., Agle, B. R., & Bryan, L. M. (2021). Stakeholder Identification and Salience After 20 Years: Progress, Problems, and Prospects. Business and Society, 60(1), 196–245. https://doi.org/10.1177/0007650318816522
Yamakawa, Y., Khavul, S., Peng, M. W., & Deeds, D. L. (2013). Venturing from emerging economies. Strategic Entrepreneurship Journal, 7(3), 181–196. https://doi.org/10.1002/sej.1158
Zhang, Y., & Han, Y. L. (2019). Paradoxical leader behavior in long-term corporate development: Antecedents and consequences. Organisational Behavior and Human Decision Processes, 155(February), 42–54. https://doi.org/10.1016/j.obhdp.2019.03.007
In-Text Citation: (Fuzi et al., 2022)
To Cite this Article: Fuzi, S. F. S. M., Hassan, M. S., Jaffar, R., & Abdullah, M. H. S. B. (2022). Exploring Stakeholder Salience Perspective of Firm Reputation: Evidence From Malaysia. International Journal of Academic Research in Business and Social Sciences, 12(11), 2245 – 2260.
Copyright: © 2022 The Author(s)
Published by Human Resource Management Academic Research Society (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non0-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode