CONCEPTUAL FRAMEWORK AND HYPOTHESES DEVELOPMENT

Transcription

1 INTRODUCTION Brand orientation (BO) has been attracting increased research attention (Ewing & Napoli, 2005; Reid, Luxton, & Mavondo, 2005). The studies of BO have ranged from fashion retailers (e.g. Bridson & Evans, 2004), political parties (e.g. O'Cass & Voola, 2011), museums (e.g. Baumgarth, 2009), and nonprofit organizations (NPOs) (e.g. Hankinson, 2000; Hankinson, 2001a, 2001b). The existing BO research has established important knowledge (Ewing & Napoli, 2005; Hankinson, 2002; Napoli, 2006; Louro & Cunha, 2001; Simoes & Dibb, 200; Braun & Wicklund, 1989; Huddleston, Cassill, & Hamilton, 1993). In this study, we attempt to address several knowledge gaps in the BO literature. First, although extensive studies have examined the direct relationship between BO and organizational performance (e.g. Hankinson, 2002; Napoli, 2006), only a few explore the specific links in this relationship. We offer a new conceptualization of BO strategy centered on two elements that are key to understanding the relationship between branding orientation and organizational performance: (1) staff emotional brand attachment; the extent to which the staff respond to an organization s branding strategy (Punjaisri, Evanschitzky, & Wilson, 2009a; Thomson, de Chernatony, Arganbright, & Khan, 1999); and (2) staff community service involvement; the extent to which staff are committed to providing a service to users (Punjaisri, Wilson, & Evanschitzky, 2009b). Second, there is surprisingly no study introducing the conditions that enhance or weaken the relationship between BO and organization performance. We identify and examine the important role of managerial influences on the effects of brand orientation. In particular, we are interested in examining the effect of charismatic leadership. Studies suggest that charismatic leadership can influence followers (staff) attitudes in the way that enhances the process of promoting the brand inside an organization (Morhart, Herzog, & Tomczak, 2009). This offers new theoretical insights into how and why properly selected, specific type of managerial influence is important for an organization s brand building processes. Finally, we attempt to address the above research questions using rich data (301 surveys) gathered from the UK NPO sector. Brand value can be considered as one of the most important assets contributing to NPOs performance in terms of attracting donation income and volunteers (Hankinson, 2002; Sargeant, Ford, & Hudson, 2008). Our study therefore provides compelling evidence that an effective BO strategy is an important component of NPOs success. At the same time, we suggest that managerial factor such as charismatic leadership can strengthen the effects of brand orientation. As a result, this study also contributes to the existing pool of knowledge on BO with regard to sector specific applications. CONCEPTUAL FRAMEWORK AND HYPOTHESES DEVELOPMENT Appendix Figure 1 presents our conceptual framework and associated hypotheses. Our central assumption is that an organization can only consistently differentiate itself through branding when the staff have a clear understanding of the brand value (Thomson et al., 1999) and are willing to act accordingly when providing services (De Chernatony & Segal-Horn, 2003). BO can be considered as a strategic platform in which the top management systematically integrates the organization s mission, vision and values into its brand and there is a shared sense of the brand s meaning across the organization (Baumgarth, 2009; Napoli, 2006; Wong & Merrilees, 2005). BO will enable the staff to relate to the brand with strong emotional connections because it is consistent with commonly held values. Such emotional attachment to the organization s brand triggers staff involvement in collectively delivering services to the external stakeholders in a way that is brand-orientated and will ultimately lead to the superior performance of the organization. In this study, we also wish to learn how managerial influences can influence the effects of brand orientation. In particular, we are 1

2 interested in examining the effect of charismatic leadership. (Vallaster and de Chernatony, 2006). We suspect that this managerial factor will moderate the effects of brand orientation. Understanding this interaction effect can have important implications for the design and implementation of the brand orientation. We therefore developed our hypotheses. Mediation Effects In their seminal work Ewing and Napoli (2005) argue that BO comprises multidimensional attributes reflecting three types of organizational capability: orchestration, interaction and affect. Previous research has suggested that the above practices have critical effects on an organization s performance (Hankinson, 2001b; Napoli, 2006; Urde et al., 2011). In the context of NPOs, we can make similar predictions. During recent decades demographic and social changes have intensified competition for funding and other resources among NPOs (Fischer, Wilsker, & Young, 2011; Froelich, 1999). NPOs are increasingly adopting marketing strategies to help to achieve their performance objectives (Arnett, German, & Hunt, 2003; Liu & Ko, 2012), among which, the practice of branding orientation appears to be one of the key drivers of organizational performance (Ewing & Napoli, 2005; Hankinson, 2002; Napoli, 2006). Emotional brand attachment refers to the emotional connections between an individual and a brand (De Chernatony & Segal-Horn, 2003; Malär, Krohmer, Hoyer, & Nyffenegger, 2011) that depends on the degree to which an individual views a brand as being part of him/herself (Park et al., 2010). An organization can improve the staff s emotional connection with the brand by promoting the brand inside the organization and aligning the staff s experience with the brand promise (Punjaisri et al., 2009b; Punjaisri & Wilson, 2011). Internal brand attachment can be developed through establishing a brand-oriented organizational culture and ensuring that the staff understand the value of the brand (Hatch & Schultz, 2001). Previous research in the NPO context suggests that branding orientation (i.e. orchestration, interaction and affect relevant activities) can improve brand communication, and develop a sense of feeling and responsibility for the brand (Hankinson, 2001a, 2002; Stride & Lee, 2007). The service literature suggests that there is a strong relationship between the staff s emotional connections to the organization s brand and their willingness to deliver the quality of service that the brand promises (De Chernatony & Segal-Horn, 2003; Kimpakorn & Tocquer, 2010; Punjaisri et al., 2009b). A clear understanding of an NPO s brand and the associated values enable the staff to establish a strong emotional connection with the brand. Finally, empirical work in the marketing and service literature has identified the relationships between branding activities, staff involvement in providing services to customers and the organizational performance (Punjaisri & Wilson, 2007). This argument also applies to the NPO sector (Hankinson, 2000; Hankinson, 2002; Stride & Lee, 2007; Thomson et al., 1999). Thus, we predict a link between brand orientation, staff emotional brand attachment, staff community service involvement and organizational performance. On the basis of these considerations, we posit the following hypothesis: H 1 : Staff emotional brand attachment and staff community service involvement mediate the relationship between BO and performance. Moderating Effects The previous literature discussing branding has often crossed with concepts in the management disciplines (Aurand et al., 2005; Sartain, 2005). Thus, we further explore two key variables that might moderate the effects of brand orientation. Our hypothesized moderator is charismatic leadership. According to previous research, leadership plays a critical role in the branding process (Morhart et al., 2009; Vallaster & de Chernatony, 2006). In the context of NPOs, the previous empirical research suggests that charismatic leadership can have a great influence on the staff s attitudes and behavior (Rowold & Rohmann, 2009; 2

3 Weed, 1993). We suspect that having a charismatic leader enhances the effects of brand orientation and therefore, it is hypothesized that: H 2a : Charismatic leadership positively moderates the relationship between BO and staff emotional brand attachment H 2b : Charismatic leadership positively moderates the relationship between staff emotional brand attachment and staff community service involvement RESEARCH METHOD To test our hypotheses empirically, we adopt a cross-sectional research design to collect data from UK NPOs. We adopted and modified the measurement of brand orientation, staff emotional brand attachment, staff community service involvement, performance, staff orientation and charismatic leadership from the existing literature in order to test our hypotheses. Using a five-point Likert scale, ranging from strongly disagree (1) to strongly agree (5), multiple-item measures were used to capture all of the constructs. We tested our questionnaire and further refined it on the basis of the comments from a pilot test. Primary data was collected via an survey of organizations registered with the Charity Commission UK, which regulates the administration and affairs of UK charities (Charity Commision UK, 2012). We obtained 301 usable questionnaires from the representative UK NPOs (Education N = 29; Health/Recreation N = 45; Disability/General Care N = 51; Housing N = 24; Art N = 27; Animal N = 9; Religious N = 13; Environment N = 8; Others N = 95). There were no significant differences between the early and late respondents. Therefore, the probability of non-response bias is minimal. Measurement We assessed the independent variable of BO for NPOs by using the scale of Ewing and Napoli (2005) and Napoli (2006). Orchestration, consisting of 4 items, measures the NPOs ability to assess the degree to which the brand portfolio and related marketing activities are suitably structured and effectively communicated to the stakeholders (Ewing & Napoli, 2005). The measurements consisted of 3 items that measure the degree to which an organization uses market feedback to create and deliver superior value to its stakeholders (Napoli, 2006). In terms of effect, 2 items were used to measure the degree to which an organization understands its stakeholders likes and dislikes about the brand (Ewing & Napoli, 2005). For the mediating variables, a 4 item scale was adopted using four facets of emotional brand attachment to measure the extent to which the staff s feeling toward an NPO s brand are affectionate, connected, passionate and committed (Malär et al., 2011; Thomson, MacInnis, & Park, 2005). We measured staff community service involvement using 4 items adopted from Malär et al. (2011) and Van Trijp, Hoyer, and Inman (1996) s measurement of product involvement. For the moderating variables, we measured charismatic leadership using 5 items based on the assessments that are widely accepted in the behavioral model of the charismatic leader, modified for the NPO context (Conger & Kanungo, 1998; Homburg, Wieseke, Lukas, & Mikolon, 2011). In terms of organizational performance, we attempted to assess this using 5 items modified from Coombes, Morris, Allen, and Webb (2011) and Napoli (2006). Finally, we controlled the NPO classification (i.e. types of NPO) that may potentially influence the effects of BO and the performance variable. Measurement Validation and Reliability To test for potential common method bias, we use Harman s single factor test (Podsakoff & Organ, 1986; Podsakoff, MacKenzie, Lee, & Podsakoff, 2003) to assess whether a single latent factor may account for all of the manifest variables of our basic model.we took actions 3

4 to control common method bias by following Podsakoff et al. (2003), such as guaranteeing the anonymity of the responses and mixing the construct items on the questionnaires. Secondly, we assessed the measurement properties of our scales using a series of confirmatory factory analyses (CFA) and followed the acceptable model fit guidelines using the comparative fit index (CFI). Our measurement model fits well with the data, as indicated by the CFA results, suggesting an acceptable fit for BO constructs (chi-square=20.156, p<0.001, CFI=0.996, RMSEA=0.025), for staff emotion brand attachment, staff community service involvement (the CFA results indicate a perfect fit, CFI = 1.000; RMSEA = 0.000), for charismatic leadership (chi-square=8.795, p<0.001, CFI=0.992, RMSEA=0.063), and for organizational performance (chi-square=4.090, p<0.001, CFI=0.992, RMSEA=0.059). Although the chi-square is significant, the RMSEA indicates that the effect of sample size is not a major concern. Finally, we assessed the correlations of the framework variables and reliability, shown in Table 1. The correlations show that brand orientation, staff community service involvement, staff emotional brand attachment, charismatic leadership and staff orientation have a significant positive correlation with the organizational performance indicators. A reliability analysis produced Cronbach s alpha coefficients ranging from to for all measures. The alphas for both samples exceed the threshold value of 0.70; thus, construct reliability is suggested. ANALYSES AND RESULTS With the properties of our measures established, we use AMOS 17.0 for performance structural equation modeling to test the path relationships posited by our conceptual framework and discern the mediating effects between BO and organizational performance. Initially, we followed the recommendations of Schumacker (2002) and Williams, Edwards, and Vandenberg (2003) to use aggregate measures as the latent variable scores in the model by creating composite variables from latent factors using the least squares regression approach, to take into account the weights of each of the measurement items on the latent factor (DiStefano, Zhu, & Mîndrilă, 2009). Mediating Effects To explore the mediating effects, we used the analysis strategy of Baron and Kenny (1986) reported in Appendix Table 2.We estimated 6 structural models and control NPO classification variables throughout the models. Model 1 suggests that BO has positive significant effects on staff community service involvement (β=.864, p<0.001) and model 2 show that BO is positively related to staff emotional brand attachment (β=.734, p<0.001), and staff emotional brand attachment is positively and significantly related to staff community service involvement (β=.745, p<0.001). Model 3 suggests that there is positively and significant relationship (β=.385, p<0.001) between staff emotional brand attachment and performance. Model 4 shows that staff emotional brand attachment is positively and significantly affected by staff community service involvement (β=.721, p<0.001), and that staff community service involvement is positively and significantly affected by performance (β=.559, p<0.001). Finally, the result from model 5 indicates a positive significant relationship between BO and performance (β=.556, p<0.001). Model 6 shows that BO positively and significantly affects staff emotional brand attachment (β=.745, p<0.001), that staff emotional brand attachment positively and significantly affects staff community service involvement (β=.173, p<0.001), and that staff community service involvement positively and significantly affects performance (β=.296, p<0.05). Therefore, staff emotional brand attachment and staff community service involvement are partially mediated by the relationship between BO and performance, providing support for hypothesis 1 (H 1 ). Moderating Effect 4

5 We employed the hierarchical regression analysis to test the hypotheses about the moderating effects (Aiken & West, 1991) the results are reported in Appendix Table 3. From model 8, we can see that charismatic leadership has a positive and significant moderating effect (β=.214, p<0.05) on staff emotional brand attachment. Thus, H 2a was supported. From model 10, we can see that the coefficient of the interaction of staff emotional brand attachment and charismatic leader is significantly positive (β=.919, p<0.1) Thus, H 2b was supported. CONCLUDING DISCUSSION Based on an analysis of 301 UK NPOs, our findings support the view that staff emotional brand attachment and staff community service involvement mediates the relationship between BO and organizational performance. More specifically, our findings show that the practice of BO enables the staff to create strong emotional connections with an organization s brand and so contributes to higher levels of staff involvement in providing services, which should ultimately lead to improved organizational performance. These effects were even more pronounced when NPOs have charismatic leaders on the senior management team. Theoretical and Managerial Implications These findings have several important implications for both academic research and managerial practice. This study took this theoretical concept of internal branding (Ahmed et al., 2003; Punjaisri & Wilson, 2007, 2011) as a bases for developing a conceptual model, and contributes to a better understanding of how BO realistically influences organizational performance in which the concept of internal branding can largely explain the process. Second, our research has implications in the area of leadership. Previous studies have suggested that leadership plays a critical role during the brand building process (e.g. Morhart et al., 2009; Vallaster & De Chernatony, 2005, 2006). Our research adds to our understanding of how charismatic leadership facilitates the underlying process of development from BO to staff community service involvement. As far as we know, this study is the first one to model this relationship explicitly. We found that charismatic leadership strengthens the effects of BO on establishing staff emotional brand attachment. Thirdly, prior service research has recognized the importance of the effects of internal branding and internal marketing on service staff (e.g. Kimpakorn & Tocquer, 2010; Punjaisri et al., 2009a; Punjaisri et al., 2009b). This research broadens our understanding of the process of internal branding from BO practice to the consequences for organizational performance. Finally, our research results contribute to our understanding of NPO practices in the areas of marketing (i.e. branding) and management (leadership). NPO managers can use the knowledge generated by this study to manage the BO activities within their organization. Limitations and Future Research Despite its potential contribution, this study has some limitations that suggest directions for future research. First, we adopt and modify several measurements, such as staff emotional brand attachment (Malär et al., 2011; Thomson et al., 2005), staff community service involvement (Malär et al., 2011; Van Trijp et al., 1996), charismatic leadership (Conger & Kanungo, 1998; Homburg et al., 2011), which have been used to analyse phenomena in the for-profit setting. Future research should explore undiscovered types of marketing capability that relate specifically to social enterprise performance. Second, the cross-sectional design of our study does not allow definite conclusions to be drawn about the causal processes in the proposed relationships. Despite these limitations, we hope that this study will stimulate further research aimed at understanding how BO affects organizational performance and the influence of managerial factors. 5

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12 Appendix Figure 1: Conceptual Model H2a Charismatic Leadership H2b Brand Orientation Staff Emotional Brand Attachment Staff Community Service Involvements H1 Notes: The dotted lines represent direct effects that may be fully mediated. 12 NPO Classification Control Performance

13 Appendix Table 1: Descriptive Statistics, Correlations and Reliabilities Mean S.D. X1 X2 X3 X4 X5 X1 Brand Orientation X2 Staff Community Service Involvement X3 Staff Emotion Brand Attachment X4 Charismatic Leadership X5 Performance Notes: N = 301, correlations are significant at p <.05 Cronbach s alpha are show in bold on the correlation matrix diagonal S.D. = Standard deviation 13

14 Appendix Table 2: Structural Model Model 1 Model 2 BO Staff Community Service BO Staff Emotional Brand Attachment Service Involvement Involvement Staff Community service Involvement Staff Emotional Brand Attachment Staff Community service Involvement Brand Orientation.864 (29.631)***.734 (19.345)***.174 (17.292)*** Staff Emotional Brand Attachment.745 (4.089)*** Model 3 Model 4 Staff Emotional Brand Attachment Performance Performance Staff Community service Involvement Staff Emotional Brand Attachment Staff Community service Involvement Performance Performance Staff Emotional Brand Attachment.385 (7.222)***.721 (18.000)*** (-.259) Staff Community Service Involvement.559 (8.034)*** Model 5 BO Performance Performance Brand Orientation.556 (11.590)*** Model 6 BO Staff Emotional Brand Attachment Staff Community Service Involvement Performance Staff Emotional Brand Attachment Staff Community Service Involvement Performance Brand Orientation.745 (19.345)***.734 (17.289)***.387 (3.876)*** Staff Emotional Brand Attachment.173 (4.4084)*** (-1.606) Staff Community Service Involvement.296 (3.088)** Note: All models are good fit (with CFI >.997, p <.000, RMSEA <.022) *p <.10; **p <.05; ***p <.01 Standardised coefficients are reported with t-value in parathions Italic value indicates mediating effects on weakening direct effects 14

15 Appendix Table 3: Moderation Analysis Staff Emotional Brand Attachment Staff Community Service Involvement Model 7 Model 8 Model 9 Model 10 Brand Orientation (BO).912 (17.640)***.848 (4.646)*** Staff Emotion Brand Attachment (SEBA).568 (19.008)***.708 (4.224)*** Charismatic Leadership (CL) (-1.530) (-2.438)** (-.8497)*** (-2.566)** BO x CL.214 (1.933)** SEBA x CL.919 (1.351)* Adjusted R R F - Value *** *** *** *** *p <.10; **p <.05; ***p <.01 Standardised coefficients are reported with t-value in parathions 15