The Effect of Corporate Reputation on the Performance of Corporate Organizations in Developing Countries: Evidence from West Africa

Download Article

DOI: 10.21522/TIJMG.2015.08.01.Art005

Authors : Kingsley Nwagu

Abstract:

This study is carried out to understand the effect of corporate reputation on the performance of corporate organizations in developing countries: evidence from West Africa. The population for this study consists of selected listed multinational companies in Nigeria and Ghana. The data was collected using a structured questionnaire and was measured on an interval scale through the research questionnaire. The statistical tool used to analyze the set variables is multiple regression. It involves the collection, collation, analysis, and interpretation of data for this study. It further incorporated ANOVA to show CSR Practices and their impact on the performance of corporate organizations as explained by the independent variables through the coefficient of determination R2. This design is useful and most appropriate in measuring the degree of association between two or more variables. It is also helpful in measuring the effect of independent variables on a dependent variable. As predicted, the study proves that corporate social responsibility practice can be integrated into corporations’ business strategy for enhanced performance. Rather than just being beneficial to society, corporate social responsibility can be the value-added opportunity for corporations that engages in responsible actions. The research adds to the existing literature on corporate social responsibility practices and their impact on corporate performance.

References:

[1] Rieschick, G. (2017). Corporate social responsibility and corporate financial performance in food, and beverage industry (Doctoral dissertation). Retrieved from Walden Dissertations and Doctoral Studies. (4677). https://scholarworks.waldenu.edu/dissertations/4677.

[2] Akhalumeh, P., Odion, O., &Ohiokha, F., (2016). Corporate Social Responsibility and Corporate Financial Performance: The Nigerian Experience. International Journal of Accounting Research, 2, 1-13. doi: 10.12816/0027131.

[3] Yu-Shu, P., Chyi-Lin, H., &Altan-Uya, D., (2015). Corporate Social Responsibility and Corporate Financial Performance: The Intervening Effect of Social Capital. Journal of Advanced Management Science, 3(4), 276-283. Doi: 10.12720/joams.3.4.276-283.

[4] Tilakasiri, K.K. (2012). Corporate social responsibility and company performance: Evidence from Sri Lanka (Doctoral dissertation). Retrieved from VU Research Repository. http://vuir.vu.edu.au/21488/1/Korathotage_Kamal_Tilakasiri.pdf.

[5] Babalola, A. (2012). The Impact of Corporate Social Responsibility on Firm’s Profitability in Nigeria. European Journal of Economics, Finance and Administrative Sciences, 45, 39-50. Retrieved from https://www.kau.edu.sa/Files/0060841/Subjects/impact%20on%20profitiability.pdf.

[6] Jamali D., &Sidani Y. (2012). Introduction: CSR in the Middle East: Fresh Perspectives. In: Jamali D., Sidani Y. (eds) CSR in the Middle East. (pp. 1-10). doi.org/10.1057/9781137266200_1.

[7] Nguyen, H.T., Le, D.M.D., Ho, T.T.M., & Nguyen, P.M., (2020). Enhancing Sustainability in the Contemporary Model of CSR: A Case of Fast Fashion Industry in Developing Countries. Social Responsibility Journal, 17(4), 578-591. https://doi.org/10.1108/SRJ-03-2019-0108.

[8] Galant, A., & Cadez, S. (2017). Corporate Social Responsibility and Financial Performance Relationship: A Review of Measurement Approaches. Economic Research-EkonomskaIstraživanja, 30(1), 676-693. doi: 10.1080/1331677X.2017.1313122.

[9] Friedman, M. (1970). Capitalism and Freedom: Fortieth Anniversary Edition.

[10] Carroll, A., (1979). A Three-Dimensional Conceptual Model of Corporate Performance. Academy of Management Review, 4(4): 479-505.

[11] Baucus, M., & Baucus, D. (1997). Paying the Piper: An Empirical Examination of Longer-Term Financial Consequences of Illegal Corporate Behavior. The Academy of Management Journal, 40, 129-151. doi: 10.2307/257023.

[12] Helm, S. (2007). One reputation or many? Comparing stakeholders’ perception of corporate reputation, Corporate Communications: An International Journal, 12(3), 238-254.

[13] Sarstedt, M., Ringle, C. M., Schloderer, M. P., and Schwaiger, M., (2008). Accounting for Unobserved Heterogeneity in the Analysis of Antecedents and Consequences of Corporate Reputation: An Application of FIMIX-PLS, Proceedings of the 37th Annual Conference of the European Marketing Academy, Brighton, England, 27-30 May 2008, EMAC.

[14] Weiss, A. M., Anderson, E. and MacInnis, D. J. (1999). Reputation Management as A Motivation for Sales Structure Decisions, Journal of Marketing, 63(4).74-89.

[15] Hall, R., (1993). A Framework Linking Intangible Resources and Capabilities to Sustainable Competitive Advantage. Strategic Management Journal, 14, 607-618.

[16] Barney, J., (1991). Firm Resources and Sustainable Competitive Advantage. Journal of Management, 17, 99-120.

[17] Roberts, P.W., and Dowling, G.R., (2002). Corporate Reputation and Sustained Superior Financial Performance. Strategic Management Journal, 23, 1077-1093. https://doi.org/10.1002/smj.274.

[18] Eberl, M., Schwaiger, M, (2005). Corporate Reputation: Disentangling the Effects on Financial Performance, European Journal of Marketing, 39(7/8), 834-54.

[19] Rose, C., & Thomsen, S., (2004). The Impact of Corporate Reputation on Performance: Some Danish Evidence. European Management Journal, 22(2), 201-210.

[20] Inglis, R. Morley, C., Sammut, P., (2006). Corporate Reputation and Organisational Performance: An Australian Study. Managerial Auditing Journal, 21(9) 934-947.

[21] Fombrun, C., 1996, Reputation: Realizing Value from the Corporate Image, (Harvard Business School Press, Boston, MA).

[22] Fombrun, C., Gardberg, N., & Sever, J., (2000). The reputation quotient SM: A Multi-stakeholders Measure of Corporate Reputation. The Journal of Brand Management, 7, 241-255.

[23] Brammer, S., & Pavelin, S., (2004). Building a Good Reputation. European Management Journal, 22, 704-713. 10.1016/j.emj.2004.09.033.

[24] Wood D., (1991). Corporate Social Performance Revisited. The Academy of Management Review, 16(4), 691–717.

[25] Moir L., (2001). What Do We Mean by Corporate Social Responsibility? Corporate Governance, 1(2), 16–22.

[26] Campbell D., Craven B., & Shrives P., (2003). Voluntary Social Reporting in Three FTSE Sectors: A Comment on Perception and Legitimacy. Accounting, Auditing and Accountability Journal, 16(4), 558–581.

[27] Gray, R., Kouhy, R. & Lavers, S., (1995). Corporate Social and Environmental Reporting: A Review of the Literature and a Longitudinal Study of UK Disclosure. Accounting, Auditing & Accountability Journal, 8(2), 47-77. https://doi.org/10.1108/09513579510146996.

[28] Dowling, J., & Pfeffer, J., (1975). Organizational Legitimacy: Social Values and Organizational Behavior. Pacific Sociological Review, 18(1), 122–136. https://doi.org/10.2307/1388226.

[29] Deegan, C., (2002). Introduction: The Legitimising Effect of Social and Environmental Disclosures – A Theoretical Foundation. Accounting, Auditing & Accountability Journal, 15(3), 282-311. https://doi.org/10.1108/09513570210435852.

[30] Deegan, C., Rankin, M., & Voght, P., (2000). Firms' Disclosure Reactions to Major Social Incidents: Australian Evidence. Accounting Forum, 24(1), 101–130.

[31] Cormier, D., & Gordon, I.M., (2001). An Examination of Social and Environmental Reporting Strategies. Accounting, Auditing & Accountability Journal, 14(5), 587-617. https://doi.org/10.1108/EUM0000000006264.

[32] Pfeffer, J., & Salancik, G., 1978, The external control of organizations: A resource dependence perspective. (Harper & Row, New York).

[33] Brunk, K., (2012). Unethical company and Brand Perceptions: Conceptualizing and Operationalizing Consumer Meanings. Journal of Business Ethics, 111(4), 551-565. doi:10.1007/s10551-012-1339-x.

[34] Frynas, J. G., & Stephens, S., (2015). Political Corporate Social Responsibility: Reviewing Theories and Setting New Agendas. International Journal of Management Reviews, 17(4), 483-509.

[35] Jitmaneeroj, B., (2018). A Latent Variable Analysis of Corporate Social Responsibility and Firm Value. Managerial Finance, Vol. 44(4), 478-494. https://doi.org/10.1108/MF-08-2017-0303.

[36] Tang, Q., & Zhang, C., (2013). Data Processing System (DPS) Software with Experimental Design, Statistical Analysis, and Data Mining Developed for Use in Entomological Research. Insect Science, 20, 254-260. doi:10.1111/j.1744-7917.2012. 01519.x.

[37] Yusoff, H., Abdul Jamal, A.D., & Darus, F., (2016). Corporate Governance and Corporate Social Responsibility Disclosures: An Emphasis on the CSR Key Dimensions. Journal of Accounting and Auditing: Research & Practice, 1-14.

[38] Aykol, B., & Leonidou, L. C., (2014). Researching the Green Practices of Smaller Service Firms: A Theoretical, Methodological, and Empirical Assessment. Journal of Small Business Management, 53, 192-209. doi:10.1111/jsbm.12118.

[39] Mellahi, K., Frynas, J. G., Sun, P., & Siegel, D., (2015). A Review of the Nonmarket Strategy Literature toward a Multi-Theoretical Integration. Journal of Management, 42(1), 143 -173.

[40] Aniuga, C. & Okolo, A. N. (2015) The Impact of Corporate Reputation on Company’s Performance. Communication Panorama African and Global Perspectives 1(1), 1 – 15.

[41] Honggui, G. L., Zhongwei, W. C., &Guoxin, X. M., (2016). Corporate Reputation and Performance: A Legitimacy Perspective. Entrepreneurial Business and Economic Review, 4(3), 181 – 193. DOI: 10.15678/EBER.2016.040313.

[42] Kiessling, T., Isaksson, L., & Yasar, B., (2015). Market Orientation and CSR: Performance Implications. Journal of Business Ethics, 137. doi: 10.1007/s10551-015-2555-y.

[43] Saadaoui, K., &Soobaroyen, T., (2018). An Analysis of the Methodologies Adopted by CSR Rating Agencies. Sustainability Accounting, Management and Policy Journal, 9(1), 43-62. https://doi.org/10.1108/SAMPJ-06-2016-0031.

[44] Nelson, G., & Evans, S. D., (2014). Critical Community Psychology and Qualitative Research: A Conversation. Qualitative Inquiry, 20, 158-166. doi:10.1177/1077800413510873.