Faculty of Business and Accountancy, University of Malaya, Malaysia

Transcription

1 Towards an Understanding of Customer-Based Corporate Reputation and Consumer Citizenship Behaviour: A Conceptual Model Gengathara, Indradevi 1 ; Hamzah, Zalfa Laili 1 Faculty of Business and Accountancy, University of Malaya, Malaysia Indra_UM@yahoo.com; zalfa@um.edu.my Abstract: Corporate reputation attracts considerable attention in marketing practice and research. Previous literatures on this concept have analysed the concept from various angles in order to understand its causal relationship from different positioning such as antecedents and its consequences. However, the subject remains understudied from the aspect of different types of organizations and customers based involved in the research, particularly in marketing literature. This study is to propose a conceptual model to understand the role of corporate reputation in determining customer citizenship behaviour towards the organization (Malaysian GLCs) from the perspective of customers. The proposed of conceptual framework of this study is expected to offer valuable insights to managerial in managing their corporate reputation effectively in sustaining their competitive advantage. Keywords: Customer-based corporate reputation, Customer Citizenship behavior, Brand trust 1. Introduction Studies on corporate reputation among scholars from various disciplines such as management, marketing, economics, psychology and sociology are building up over the past decades (Van et al., 2016; Abbasi et al., 2011). Scholars believes that the journey to fully understand the multiple perspectives of the concept of corporate reputation still requires a lot more studies (Van et al., 2016; Abbasi et al., 2011; Shahsavari & Faryabi, 2013; Abratt & Kleyn, 2012; Bartikowski & Walsh, 2011). Previous literatures on this concept have analysed the concept from various angles in order to understand its causal relationship from different positioning such as antecedents and its consequences. However, the subject remains understudied from the aspect of environmental diversity and the types of organizations involved in the research, particularly in marketing literature (Van et al., 2016; Abbasi et al., 2011; Bartikowski & Walsh, 2011; Abratt & Kleyn, 2012). Most of the earlier studies have been conducted in US, UK and Europe, in which researchers suggest that the corporate reputation scale has psychometric properties and were empirically validated in France, US and Germany but not in other countries (Dahlan, 2010; Abratt & Kleyn, 2012). The findings of those studies may be or not applicable in other countries due to consumer differences based on cultural differences, institutional factors and cross-national distance variables. They also believe that studies in other countries could be differ due to customer differences particularly in forming perception. Therefore, there is a significant evidence from the extent literature that the relationship between corporate reputation with its antecedents and consequences varies from country to country should be validated in other countries, particularly in Asia as proposed in this study. Malaysian business environment and its economic setting is unique in its own way. A study on the corporations which includes multinational corporations (MNCs), government linked companies (GLCs) and local private companies (LPCs) found that these organizations are enthusiastic in communicating with their internal and external stakeholders on various aspects of their organization s unique identity (Abdullah, & Abdul Aziz, 2011). This is deemed important in improving ones image and reputation and in building valuable asset for the organization (Abdullah & Abdul Aziz, 2011). Positive reputation

2 is seen as a predictor of financial performance, creates a barrier from competitors and is the most valuable asset of any firm which deserves to be protected (Abdullah & Abdul Aziz, 2011; Keh & Yie; 2009; Abratt & Kleyn, 2012). Findings also show that if the notion of corporate reputation if well executed by organizations, will surely be beneficial to them especially in encouraging greater sense of loyalty (citations) among customers. The question is how far studies have been explored in the area of corporate reputation and its customer behavioural-outcome variables. Abdullah & Abdul Aziz (2011) have raised a valid question on whether Malaysian companies in general cares about their reputation against global competitors in which they found that most companies are struggling to gain public s acceptance and is rather lacking in terms of genuine interest in contributing to the community at large. Specifically, this study is to understand how consumers perceive corporate reputation of Malaysian Government Linked Companies (GLCs) and how perception affect their behaviours in ensuring these organizations are able to sustain their position in the increasingly competitive business environment. Thus, this study is present a conceptual model to understand the role of corporate reputation in determining the forming of customer s behaviour towards the organization (Malaysian GLCs) from the perspective of customers. The GLCs are often viewed as less competitive with poor business performance and their reputations were also tainted by corrupt practices (Dahlan, 2010). Others criticised that the GLCs are being too risk-averse, lacking sufficient entrepreneurial drive and some of their investments are more politically oriented rather than commercially driven (Najid & Rahman, 2011). Hence, it is important to understand the perception of customers on corporate reputation of these organizations that exists in a country that enjoys diverse cultural and socio-economic background. An understanding of customers perspective is essential as customers are one of the most important stakeholder groups that could create revenue streams. The concept is known as customer-based corporate reputation. 2. Literature Review and Hypotheses 2.1. Corporate Reputation Corporate reputation is categorized into three main clusters namely (i) reputation as state of awareness, (ii) reputation as an assessment and (iii) reputation as an asset (Barnett et al., 2006). Positive reputation is seen as a predictor of a sound financial performance, creates a barrier from competitors and is the most valuable asset of any firm which deserves to be protected (Abdullah & Abdul Aziz, 2011; Keh & Yie; 2009; Abratt & Kleyn, 2012). Previous literatures clearly indicates that the manifold benefits of corporate reputation is indeed supports the idea of CBR being an intangible asset of organizations which influence their performance directly or indirectly Customer-Based Corporate Reputation The number of studies focusing on customers as an important stakeholder group is rather small (Abratt & Kleyn, 2012; Walsh et al., 2009; Jinfeng et al., 2014; Walsh & Beatty, 2007). The concept is said to be under studied despite the apparent importance of customer as one of the major stakeholders (Abratt & Kleyn, 2012). Customers of highly reputable organizations have a tendency to portray supportive behaviour and it can be reflected into recognition of high competency and quality of the entity (Bartikowski & Walsh, 2011). This notion has been fairly supported by other scholars who believe that the direct experience of customers in reference to good/services of the organization becomes an important element of corporate reputation management (Petrokaitė & Stravinskienė, 2013). The scholar further emphasized that customer s direct experience does not only indicated the quality of good/services but it covers a much broader spectrum of the entire organization s performance. Therefore, Abratt & Kleyn (2012) continue to enhance on the importance of CBR which they have defined as the customer's overall evaluation of the firm based on his or her reactions to the firm's goods, services, communication activities, interactions with the firm and/or its representatives or constituencies (such as management, employees or other customers) and/or known corporate activities. This definition

3 incorporated the idea of attitude-like evaluative judgment by customers into the existing definition of corporate reputation Customer Citizenship Behaviour (CCB) Various studies have indicated that customers of a reputable organization tend to engage in a supportive supportive behaviour and believe that good customer support contributes to higher competency and quality of the organization (Fowler, 2013; Shahsavari & Faryabi, 2013; Abbasi et al., 2011; Bartikowski & Walsh, 2011). It has been widely accepted by researchers that CCB refers to customer s voluntary actions which is not directly or explicitly expected of them and such actions are believed to have an impact on the organizations interests and performances (Fowler, 2013; Rosenbaum & Massiah, 2007). This statement is indeed in line with the definition of CCB which has been described as voluntary and discretionary actions by individual customers, which are not directly or explicitly expected or rewarded but may aggregate into higher service quality and promote the effective functioning of service firms (Fowler, 2013). In this context, customers are not viewed as part of the production and/or delivering services of the organizations; rather helping to improve organization s performance. This clearly explains that CCB is not customer co-production (Abbasi et al., 2011; Fowler, 2013). With that understanding, this study will view CCB as a consequence of customer-based corporate reputation (CBR) by focusing on three elements namely helping other customers (being an effective promoters), helping the company (cooperates during service encounters) (Bartikowski & Walsh, 2011; Abbasi et al., 2011; Jinfeng et al., 2014) and circulating positive word of mouth (important source of information) (Shahsavari & Faryabi, 2013; Walsh et al., 2009; Jinfeng et al., 2014; Rosenbaum & Massiah, 2007). Accordingly, the hypothesis is developed as follows: H1: Corporate reputation has a positive relationship between corporate reputation and customer citizenship behaviour. Trust is regarded as a fundamental element in developing and maintaining relationship between two parties that engages in exchange process as in the context of marketing (Abbasi et al., 2011; Nguyen et al., 2013; Keh & Yie, 2009). Accordingly, trust exists between both parties within a particular exchange relationship and is usually viewed as customer s expectations towards the products/services being offered by an organization (Nguyen et al., 2013). Organisation is seen reputable when it has competence, honesty and benevolence (Nguyen et al., 2013; Keh & Yie, 2009) and has ability to fulfil their promises whilst the importance they give to customers in making important organizational decisions and considering customer s interests as their priority reflects the element of benevolence. This explains the importance of trust towards and organization and trustful behaviours are essential for a long term relationship between organizations and its stakeholders. As such, we develop following hypothesis: H2: Corporate reputation has a positive relationship with customer trust. The relationship between customer trust and corporate reputation has been clearly described in the existing literatures. However, the definition of trust given above seems to be lack in terms of its behavioural consequences (Morgan & Hunt, 1994). Their argument is that trust that failed to invoke volunteer behaviours or willingness to act among customers is incomplete. The genuine confidence that commonly prevails between two parties that trust each other should be translated into behavioural intention, if this does not happen, one of the party involved in the exchange process believed to be not genuinely confident. Customers who are not trustful is considered not profitable for the organization and it may in fact incur loss for the organization. Having said that, it is vital to test if trustworthy relationship exists between the customers and Malaysian GLCs and is customers are willing to act favourably on behalf of the organization. Thus, hypothesis is developed as follows:

4 H3: Customer trust will influence customer citizenship behaviour. Customers that attribute a good reputation to a service corporate is more likely to have compatible feelings like commitment, favourable intentions to continue doing business with the corporate (Jinfeng et al., 2014). It has been further concluded that good corporate reputations encourages customers to continue to express support and develop affective commitment towards the organization. Studies have also indicated that commitment plays an important mediating role in ensuring successful business relationship which in turn enhances productivity, efficiency and effectiveness (Keh & Yie, 2009; Bartikowski & Walsh, 2011). The explanation behind this relation is that good company reputation is said to reduce customer s perceived risk, hence it increases their motivation to continue making business with such organizations. Commitment entails a desire to develop a stable relationship, a willingness to make short term sacrifices to maintain the relationship and confidence in the stability of the relationship (Soch & Aggarwal, 2013). However, there is lack of mention on the contribution of corporate reputation towards organizational relationship in the existing marketing literatures (Keh & Yie, 2009). Hence, in order to fill the gap, we suggest that corporate reputation is important in gaining customer commitment: H4: Corporate reputation has positive relationship with customer commitment. Customer commitment is one of the component that helps in bridging the relationship between corporate reputation and customer citizenship behaviour and is vital in building successful relationship because it has the ability to indirectly influence customer s cooperative behaviours ((Keh & Yie, 2009; Meyer & Allen 1997). Social exchange theory says that customers with high levels of commitment have higher tendency in displaying cooperative attitude and at the same time will make effort in support of the organization (Soch & Aggarwal, 2013). Therefore, it is important to know that customers of GLCs in Malaysian context possess similar voluntary behaviours and willingly identify themselves with the goals and values of the organization and cares about its welfare. As such, hypothesis is developed: H5: Customer commitment will influence customer citizenship behaviour. 3. Conceptual Framework The study aims to understand the customer-based corporate reputation (CBR) of GLCs in this country through the measurement scale developed by Walsh et al. (2009). The consequences of such consumerbased reputation is critical in developing customer citizenship behaviours (CCB). CCB in this context will be analysed from three dimensions namely helping the customers, helping the company and positive word of mouth (Bartikowski & Walsh, 2011; Shahsavari & Faryabi, 2013; Fowler, 2013). Earlier literatures have clearly outlined that CBR has influenced customer trust and customer commitment in various settings (Walsh et al., 2009). The relationship of these concepts can be explained through a motivation reasoning theory which may result in behavioural changes. For example, highly committed customers may defend their beliefs about the firm s reputation (Bartikowski & Walsh, 2011). Also, highly reputable companies are likely to gain customer trust in two ways. First, company that has high reputation can strengthen customers' confidence and reduce risk perceptions when they make judgment on organizational performance and quality of products or services. Thus customers are more likely to perceive companies with highly favourable reputations as trustworthy. Second, customers are more likely to perceive companies with good reputation could gain more customer commitment. This is believed to be a good foundation for Malaysian companies especially the GLCs to understand the level of reputation they hold in the mind of their customers and how it affects the nature of their behaviours. By understanding consumer behavioural impact from high reputation, companies could sustain their competitive advantage in the future. Thus, the conceptual framework is proposed as in Figure 1.0.

5 The proposed model is attempted to fill the current research gap. Various studies was referred in learning about the linkages between customer-based corporate reputation and customer citizenship behaviour. It has been tested by many scholars from different dimensions namely CBR as an antecedent, mediator as well as consequences. For this particular study, the reference has been narrowed down to those studies that view CBR as an antecedent in determining customer s citizenship behaviour (CCB). Previous researches have explored many intermediate variables that helps to create a relationship between the two main variables namely customer commitment and customer loyalty (Shahsavari & Faryabi, 2013) customer satisfaction, commitment and loyalty (Van et al., 2016), customer commitment and loyalty intentions (Bartikowski & Walsh, 2011), customer trust and identification which leads towards customer commitment before leading to CCB (Keh & Yie, 2009), and customer loyalty, trust and re-patronage intention (Walsh et al., 2009). Thus, this proposed conceptual framework, the combination of customer commitment and trust as a mediating factor in learning the impact of CBR on CCB will be an addition to the existing studies in order to search for the best combination of variables that could provide better impact on CCB which is believed to help organizations to focus their resources into a narrow spectrum and invest wisely on important elements. Customer Trust H2 H3 Customer-Based Corporate Reputation H1 Customer Citizenship Behaviour H4 Customer Commitment H5 Figure 1: The Conceptual Model of Customer-Based Corporate Reputation and Customer Citizenship Behaviours 4. Conclusion and Research Implications This study aims to develop a conceptual framework of customer based corporate reputation and customer citizenship behaviour. The conceptual model derives from extant literature and related theories. The model presented here represents a first step in conceptualizing the customer-based corporate brand reputation in the context of GLCs companies. Therefore, through this conceptual framework, our contributions would be: (1) Applying the reputation scale developed in US, adapted from Walsh and Beatty s measures in Malaysia; (2) Proposing a conceptual model that indicate the linkages of corporate reputation with its antecedents and consequences by referring to the proposed model and hypotheses, namely customer commitment and trust in shaping consumer behaviour in the form of helping the company, helping other customers and delivering positive word of mouth, and (3) highlighting to companies especially the GLCs on how their corporate reputation can affect the

6 behaviour of their customers through commitment and trust. On the other hand, in learning about the impact of CBR on customer s behaviour, scholar suggested that regular measurement of customer commitment can reveal the effectiveness of corporate reputation on attracting favourable behaviours (Keh & Yie, 2009). When the relationship between customer and the supplier evolves from strangers to partners, customers may experience reputation-based certainty, and trust-based attachment and finally commitment- based bonding. The potential findings of this study will provide a proper direction to the organizations in this country in managing their reputation which is said to be one of the strongest determinant of organization s sustainability (Abratt & Kleyn, 2012; Keh & Yie, 2009). This study proposed a conceptual model suggests a number of research avenues. Given that the model represents a first step in conceptualizing customer-based corporate reputation, there is opportunity for theoretical and empirical research in this area. Pertinent research issues for the future will include the development of methodologies for separating contributions to empirically test the linkage between corporate reputation and customer citizenship behaviour. Theoretically, this study will contributes to the theory by applying an adapted customer-based corporate reputation scale in Malaysia that captures the views of customers who have interacted with GLCs companies. Importantly, this study represents an important step in that it attempts to measure corporate reputation from a customer perspective. In addition, this conceptual model proposed potential specific relationship between customer-based corporate reputation and its impact on customer citizenship behaviour. Other linkages on the relationship between customer based corporate brand reputation, customer trust and customer commitment are also proposed. Finally, the model also proposed the impact of customer trust and customer commitment. Managerially, this study is expected to provide advices to managers on the importance of maintaining their corporate reputation by understanding its impact on building customer trust, customer commitment and customer citizenship behaviour. By specifying the consequences of corporate reputation, appropriate steps can be taken by companies to strategize their marketing activities in order to maintain and improve their corporate reputation. For example, companies should be able to improve the way in which they deliver their services to build trust and improve customer commitment which will result in customer citizenship behaviour. References Abbasi, A., Safarnia, H., Baradaran, M., & Abbasi, R. (2011). A Study of factors effecting customer citizenship behavior. Interdisciplinary Journal of Contemporary Research in Business, 3(1), Abdullah, Z., & Abdul Aziz, Y. (2011). Managing corporate reputation, stakeholder relations, and corporate social responsibility: A Southeast Asian perspective. International Journal of Economics and Management, 5(2), Abratt, R., & Kleyn, N. (2012). Corporate identity, corporate branding and corporate reputations: Reconciliation and integration. European Journal of Marketing, 46(7/8), Barnett, M., Jermier, J. & Lafferty, B. (2006). Corporate Reputation: The Definitional Landscape. Corporate Reputation Review 9(1, March): doi: /palgrave.crr Bartikowski, B. and Walsh, G. (2011). Investigating Mediators between Corporate Reputation and Customer Citizenship Behaviors. Journal of Bussiness Research, 64:

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