The effect of corporate social actions on organizational reputation

Purpose – The paper analysed how the strengths and weaknesses of a firm's social actions with its different types of primary stakeholders impact on its reputation. The paper aims to discuss these issues. Design/methodology/approach – This research adopts Mattingly and Berman's typology to measure corporate social performance data, which differentiates primary stakeholder between institutional and technical. The first provides intangible support and the second tangible support to the firm. The hypotheses compare the effect that different social actions measures can have on corporate reputation (CR). The authors test the hypotheses empirically using two samples composed of US firms and two CR measures. Findings – The authors found that institutional stakeholders are deemed to hold normative expectations of a firm's behavior, impacting strongly on CR, unlike technical stakeholders, that have an economic exchange relationship with the firm. In addition to corporate social actions toward technical stakeholders are viewed as self-serving actions and are therefore less likely to impact on CR. Practical implications – The research can be very useful for business managers since it provides theoretical discussion and empirical proof about the effect of social actions on CR, which can assist them in designing or modifying social responsibility strategies used by the firm in order to build a positive CR. Originality/value – The paper develops a framework on CR, highlighting the valuable roles that different types of social actions play in reputation building, and proposes a new model that identifies the impact of different types of social actions on organizational reputation.