independent and joint effects of perceived corporate reputation, affective commitment and job...

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1877–0428 © 2011 Published by Elsevier Ltd. Selection and/or peer-review under responsibility of 7th International Strategic Management Conferencedoi:10.1016/j.sbspro.2011.09.139

Procedia Social and Behavioral Sciences 24 (2011) 1177–1189

7th International Strategic Management Conference

Independent and joint effects of perceived corporate reputation, affective commitment and job satisfaction on

turnover intentions

Umit Alniacika, Ersan Cigerimb, Kultigin Akcinb, Orkun Bayramb, a* aKocaeli University, Faculty of Communications, Izmit,Kocaeli, 41380, Turkey

bGebze Institute of Technology, Faculty of Management, Gebze, Kocaeli, 41400, Turkey

Abstract

The concept of corporate reputation has gained a great deal of popularity among business practitioners and academicians in recent decades, because it is believed that corporate reputation is an important asset which may affect the evaluations of various stakeholders about the company. A favorable reputation may attract affluent consumers, talented workers and generous investors to the company. Indeed, a strong reputation is a strategic resource which is valuable, scarce and very difficult to imitate, though providing a sustainable positional advantage for the company. Nevertheless, research on the relationship between corporate reputation and employee behavior is relatively scarce. Only a limited number of empirical studies have tackled with the link between corporate reputation and employee behavior such as employment and turnover intentions, job satisfaction, organizational commitment and work performance. Accordingly, in this study, we examined the independent and joint effects of (a) company’s perceived reputation (b) employees’ affective commitment and (c) job satisfaction on turnover intentions of its employees. For this aim, we conducted a field research on 220 employees working in the higher education industry. Research results showed that perceived organizational reputation has a positive correlation with organizational commitment and job satisfaction whereas it has a significant negative correlation with turnover intentions. However, when they are jointly included in a multiple regression analysis, perceived corporate reputation surprisingly exerted a positive effect on turnover intentions. Theoretical and managerial implications of the findings are discussed.

© 2011 Published by Elsevier Ltd. Selection and/or peer-review under responsibility 7th International

Strategic Management Conference Keywords: Corporate Reputation; Organizational Commitment; Job Satisfaction; Turnover Intentions; Employee Commitment

1. Introduction

Increasing competition in the business world led organizations to develop unique and differentiated resources to gain a competitive edge over their rivals. Nowadays, corporate success depends more on intangible assets of a company than on the traditional physical and financial indicators. Among the

* Corresponding author. Tel.: +90 262 3031884; fax: +90 262 3031803 E-mail address: [email protected] .

© 2011 Published by Elsevier Ltd. Selection and/or peer-review under responsibility of 7th International Strategic Management Conference

1178 Umit Alniacik et al. / Procedia Social and Behavioral Sciences 24 (2011) 1177–1189

intangible assets, corporate reputation is the most remarkable one that enables sustainable competitive advantage. The concept of corporate reputation has gained a great deal of popularity among business practitioners and academicians in recent decades, because it is believed that corporate reputation is an important asset which may affect the evaluations of various stakeholders about the company (Shapiro, 1983; Fombrun and Shanley, 1990; Yoon, Guffey and Kijewski, 1993; Fombrun, Gardberg and Sever, 2000; Gotsi and Wilson, 2001; Roberts and Dowling, 2002; Rose and Thomsen, 2004; Page and Fearn, 2005). It is argued that a favorable reputation may attract affluent consumers, talented workers and generous investors to the company (Fombrun and Shanley, 1990). Besides, a strong reputation is a strategic resource which is valuable, scarce and very difficult to imitate, though providing a sustainable positional advantage for the company (Hall, 1993). Although a growing body of research has probed the nature, antecedents and consequences of corporate reputation, there are still limitations to what we know about it. A respectable amount of effort has been spent on defining the construct and developing valid and reliable scales to accurately measure corporate reputation (Fryxell and Wang, 1994; Caruana, 1997; Fombrun et al., 2000; Davies, Chun and Da Silva, 2001; Schwaiger, 2004; Helm, 2005; Walsh and Beatty, 2007). Some other researchers have focused on the relationship between corporate reputation and business performance (Roberts and Dowling, 2002; Rose and Thomsen, 2004; Carmeli and Tishler, 2005; Eberl and Schwaiger, 2005; Ou, Abratt and Dion, 2006). Nonetheless, research on the relationship between corporate reputation and employee behavior is relatively scarce. Only a limited number of empirical research has tried to address the link between corporate reputation and employee behavior such as job satisfaction, organizational commitment and employment & turnover intentions (Dutton and Dukerich, 1991; Turban and Greening, 1996; Riordan, Gatewood and Bill, 1997; Turban and Cable, 2003). For the very reason, this study attempts to examine the association between perceived corporate reputation and job satisfaction, commitment and turnover intentions of employees. In the next section we provide a literature review on corporate reputation and key employee behavior such as organizational commitment, job satisfaction and turnover intentions. Following the literature review, research methodology and data analysis are presented. The paper is finished by concluding remarks and research implications.

2. Corporate Reputation

According to Fombrun and Shanley (1990; p: 235), corporate reputations “represent publics’ cumulative judgments of firms over time” which, in turn, hinge on firm’s, “relative success in fulfilling the expectations of multiple stakeholders”. It is an interdisciplinary subject that lies on the intersection point of various academic fields, and draws attention from the areas of marketing, organizational behavior, strategic management and many others. Reputation is an aggregate composite of all previous transactions over the life of the entity, a historical notion, and requires consistency of an entity's actions over a prolonged time (Herbig and Milewicvz (1993, p.18). Corporate reputation is a perceptual representation of a company's past actions and future prospects that describes the firm's overall appeal to all its key constituents when compared to other leading rivals (Fombrun, 1996, p: 72). Reputation can be seen as the summarized view of the perceptions held by all relevant stakeholders of an organization, that is, what customers, employees, suppliers, managers, creditors, media and communities believe the organization stands for, and the associations they make with it (Chun, 2005; 105). In general terms, reputation boils down to how others perceive the firm and respond to it (Williams, Schnake and Fredenberger, 2005). It is an outcome of the past actions of a firm.

A strong reputation introduces positive consequences to business management. A favorable organizational reputation is a strategic resource that provides significant competitive advantage to a company (Hall, 1993). A positive corporate reputation is highly valued because it helps to attract and keep talented human resources; draws consumers to purchase the firm’s existing products and services and

Umit Alniacik et al. / Procedia Social and Behavioral Sciences 24 (2011) 1177–1189 1179

accept new offerings from it. A favorable reputation helps to increase the firm's sales and its market share (Shapiro, 1982), and to establish and maintain a loyal relationship with customers (Andreassen and Lindestad, 1998; Robertson, 1993; Yoon et al., 1993). It has positive impact on customer retention (Barich and Kotler, 1991) and word of mouth behavior, too (Fombrun and van Riel, 1997; Groenland, 2002). Further, a firm’s reputation influences the size and quality of the firm’s applicant pool which, in turn, enables it to recruit more talented employees (Turban and Cable, 2003). Attracting and retaining superior human resources can provide organizations with a sustained competitive advantage (Lado and Wilson, 1994; Pfeffer, 1994). A strong employer reputation may attract better applicants (Collins and Stevens, 2002; Slaughter et al., 2004) and shape their expectations about their employment (Lievens and Highhouse, 2003). Further, employer brand associations can be used to predict employee satisfaction and loyalty (Davies, 2008). Hence, the issue of developing and maintaining a strong reputation should be carefully examined by both the academicians and the practitioners.

Research examining the effect of corporate reputation on employee behavior is relatively scarce. However, a limited set of academic research indicates a positive relationship between corporate reputation and employee behavior (Dutton and Dukerich, 1991; Riordan et. al. 1997; Carmeli and Freund, 2002; Turban and Cable, 2003; Herrbach, Mignonac, Gatignon, 2004). Nevertheless, the effect of corporate reputation on employee behavior calls for further discussion.

3. Corporate Reputation and Employee Behavior

Organizational commitment, job satisfaction and turnover intentions are amongst the most important employee behavior which are critical to attaining a better business performance. These constructs have been focal subjects of numerous research within the field of organizational behavior. The concept of organizational commitment is both theoretically and managerially central to organizational behavior research. Organizational commitment is defined in various ways. For example, it is defined as an individual's attitude towards an organization that consists of (a) a strong belief in, and acceptance of, the organization's goals and values; (b) a willingness to exert considerable effort on behalf of the organization; and (c) a strong desire to maintain membership in the organization (Mowday et al., 1982). Porter et al., (1974) suggest that it has three primary components: (1) a strong belief in and acceptance of the organization's goals and values; (2) a willingness to exert considerable effort on behalf of the organization; and (3) a strong desire to remain with the organization. This means that, an employee who is highly committed to an organization intends to stay with it and to work hard toward its goals (Luthans, McCaul, Dodd, 1985). Another influential definition of organizational commitment is made by Meyer & Allen (1991). They argued that there were three types of organizational commitment: (1) Affective Commitment: refers to the employee’s emotional attachment to, identification with, and involvement with the organization. Employees with a strong affective commitment continue employment with the organization because they want to do so. (2) Continuance Commitment refers to an awareness of the costs associated with leaving the organization. Employees whose primary link to the organization is based on continuance commitment remain because they need to do so. (3) Normative Commitment reflects a feeling of obligation to continue employment. Employees with a high level of normative commitment feel that they ought to remain with the organization. Although affective, continuance, and normative commitment are used to capture the multidimensional nature of organizational commitment, affective commitment is considered a more effective measurement of organizational commitment. Employees with strong affective commitment would be motivated to higher levels of performance and make more meaningful contributions than employees who expressed continuance or normative commitment (Brown, 2003:31). Thus, affective commitment alone is one of the key concepts of employee behavior. Job satisfaction is typically defined as the pleasurable or positive emotional state resulting from the appraisal


of one’s job or job experience (Locke, 1976). It is a result of employee's perception of how well his job provides those things that are viewed as important. Job satisfaction is often determined by how well the outcome meet or exceed expectations and it represents several related attitudes such as work itself, pay, promotion opportunities, supervision and coworkers which are most important characteristics of a job about which people have effective response (Luthans, 1998). Job satisfaction is so important that its absence often leads to lethargy and reduced organizational commitment (Moser, 1997). Job satisfaction is found to correlate with organizational citizenship behaviors (Organ & Ryan, 1995). On the other hand, dissatisfied employees are more likely to quit their jobs or be absent than satisfied employees ((Rusbult, Farrell, Rogers, & Mainous, 1988). Turnover intention (as opposite to intention to stay) is the degree of likelihood of an employee terminating his membership in an organization. It is one of the most widely studied outcomes in the organizational behavior literature. A substantial body of empirical evidence links greater commitment and satisfaction to greater intent to stay and, consequently, lower turnover (Price & Mueller, 1981; Mathieu & Zajac, 1990; Randall, 1990; Lee et al., 1992; Somers, 1995).

A strong theoretical foundation suggests that there is a positive relationship between corporate reputation and favorable employee behavior (i.e. commitment, satisfaction and loyalty), which is also supported by empirical research. Both social identity theory and signalling theory provide rationales for why higher quality employees are attracted and retained by firms with positive reputations. Social identity theory suggests that individuals classify themselves into social categories based on group membership (i.e. the company they work for) and these social categories influence individuals’ self concepts (Ashforth and Mael, 1989; Dutton, Dukerich and Harquail, 1994). Understanding how individuals in an organization perceive and categorize themselves as members of the organization closely relates to the issue of organizational commitment. Corporate reputation also provides information about how well the organization is perceived by others, which, in turn, affects the perceptions through its members. Firms with positive reputations are seen as providing enhanced self-esteem to its employees. Thus, reputable companies are more desirable for job applicants who want to augment their self concepts. Signalling theory suggests that, individuals who do not have complete information about an organization will interpret the available information as signals about the (working) conditions of an organization (Spence, 1974). Reputations are abstract and powerful signals providing strong cues about the organizations. Thus, employees may use corporate reputations as signals that provide information about the organization and prefer to join into organizations with better reputations.

Extant research demonstrated that corporate reputation influences stakeholder decisions about the organization. Corporate image and reputation affect job seekers’ decisions to apply for employment (Gatewood, Gowan and Lautenschlager, 1993) and employees’ attitudes and behaviors toward their organization (Dutton and Dukerich, 1991). Corporate image is positively related to job satisfaction, and negatively related to turnover intentions (Riordan et. al. 1997). Corporate social responsibility, as a component of corporate reputation, is also positively related to organizational commitment (Brammer; Millington, Rayton, 2007). Perceived external prestige (PEP) (i.e. company reputation) is predicted by employees’ affective commitment, organizational citizenship behavior and job satisfaction (Carmeli and Freund, 2002). PEP is found to be positively related to member cognitive identification, which, in turn, results in enhanced affective commitment (Carmeli, Gilat and Weisberg, 2006). PEP is also found to have a direct effect on intentions to quit (Herrbach, Mignonac, Gatignon, 2004). In addition, better company reputation is found to attract more and higher quality job applicants (Turban and Cable, 2003).

From this perspective corporate reputation is a significant tool that may affect key employee behavior. Under the light of previous findings, we propose a positive relationship between how employees perceive their firm’s reputation and their organizational commitment and job satisfaction. Further, we propose a


negative relationship between how employees perceive their firm’s reputation and their turnover intentions. Thus, the major hypotheses tested in this study are:

H1: Perceptions of corporate reputation is positively related to organizational commitment. H2: Perceptions of corporate reputation is positively related to job satisfaction. H3: Perceptions of corporate reputation is negatively related to turnover intentions.

As noted above, extant literature documents a strong negative correlation between affective commitment and turnover intentions. A substantial body of empirical evidence also documents the negative association between job satisfaction to turnover intentions. However, there is limited literature about the joint effects of perceived corporate reputation, affective commitment and job satisfaction on turnover intentions of employees. Thus, we made no initial assumptions about the relative effects of each of the variables on turnover intentions when jointly analyzed. Rather, we adopted a more exploratory approach and merely assumed that perceived corporate reputation should significantly contribute to the predictive power of affective commitment and job satisfaction in a regression model.

H4: Perceptions of corporate reputation significantly improves the predictive power of affective commitment and job satisfaction when predicting turnover intentions.

In order to test these hypotheses, we conducted a field research. In the following section research methodology and data analyses are presented.

4. Methodology

4.1. Research Design

Research data is collected by an online questionnaire. Sampling frame was consisted of the 2372 academic staff of two higher education institutions in the north-west part of Turkey. E-mail messages containing the web-link of the online questionnaire were sent to the e-mail addresses of all academic staff working in the two institutions. A total of 220 individuals participated in this study by voluntarily filling the online questionnaire. The response rate is about 9% of the sampling frame. Participants were asked about their perceptions of reputation of their firm, organizational commitment and job satisfaction levels, as well as their turnover intentions. Data was recorded on online forms via internet. Some demographic data (age, gender, income, tenure in the organization) was also collected.

The mean age of subjects was 35 years (range: 23-63; sd. =7.9) and 62% were male. 63% were married. The mean of their monthly income was 2290 TL. The mean respondent organizational tenure is 7.4 with a standard deviation of 6.6.

4.2. Measures

Perceived corporate reputation was measured using 7 items developed from Caruana and Chircop (2000) Newell, Ronald E. Goldsmith (2001) and Fombrun et al. (2000). Participants were requested to indicate their level of agreement or disagreement with the statements using five-point Likert type scales (1= strongly disagree; 5= strongly agree). Examples of items include “In general, people believe that my organization is: (trustable, credible, reputable).” “In general, people admire and respect my organization”.

Affective commitment was measured using 8 items from Allen and Meyer’s (1990) “Organizational Commitment Questionnaire”. Participants were requested to indicate their level of agreement or


disagreement with the statements using five-point Likert type scales (1= strongly disagree; 5= strongly agree). Examples of items include “I feel a strong sense of belonging to my organization”; “I feel emotionally attached to this company” and “I am proud to tell others that I am part of this organization”.

Job satisfaction was measured with a 9 item scale. Items are taken from Quinn and Shepard’s “Global Job Satisfaction Scale” (1974) and Smith, Kendall, Hulin’s “Job Descriptive Index” (1969). The Global Job Satisfaction Scale includes four items like “All in all, how satisfied would you say you are with your job?”. The Job Descriptive Index consists of five measures of job satisfaction including satisfaction with work, promotion, supervision, pay and co-workers. Participants were requested to indicate their level of agreement or disagreement with the statements using five-point Likert type scales (1= strongly disagree; 5= strongly agree).

Turnover intention was measured using 5 items, adapted from Angle and Perry (1981) and Jenkins (1993). Participants were requested to indicate their level of agreement or disagreement with the statements using five-point Likert type scales (1= strongly disagree; 5= strongly agree). Examples of items include “I often think of quitting my current job”; “I am actively looking for a job with another company” and “"I am planning on looking for a different job in a different organization within the next 12 months”.

4.3. Data Analysis and Results

Before testing the research hypotheses, we made some preliminary analyses to control the

dimensionality and reliability of the measurement scales. Scale dimensionality was controlled by

exploratory factor analyses of each measurement scale. Scale reliability was assessed by internal

consistency using Cronbach’s Alpha coefficient


Principal components analysis suggested a single factor for “perceived corporate reputation scale”, which explained 68% of the total variance. All of the scale items loaded heavily (from .89 to .78) on the unrotated factor. Cronbach’s Alpha coefficient was calculated as .92. We therefore decided that the measure has adequate internal consistency and computed a composite variable by averaging the responses on the seven items for use in further analyses. For the “affective commitment scale”, principal components analysis suggested a single factor, which explained 66% of the total variance. All of the scale items loaded heavily (from .89 to .70) on the unrotated factor. Cronbach’s Alpha coefficient was calculated as .94. Thus, a composite measure was created by averaging the responses on the eight items. For the “job satisfaction scale”, principal components analysis suggested a single factor, which explained 62% of the total variance. All of the scale items loaded heavily (from .87 to .67) on the unrotated factor. Cronbach’s Alpha coefficient was calculated as .92. Thus, a composite measure was created by averaging the responses on the four items. Principal components analysis suggested a single factor for the “turnover intentions scale”, which explained 72% of the total variance. All of the scale items loaded heavily (from .92 to .65) on the unrotated factor. Cronbach’s Alpha coefficient was calculated as .90. Thus, a composite measure was created by averaging the responses on the five items. Consequently, we computed four composite variables in order to be used to test the research hypotheses. The means, standard deviations, reliability estimates and interrelations of all variables are presented in Table 1.

Table 1: Means, Standard Deviations, Reliability Coefficients and Interrelations of All Variables

An example of a column heading Mean Std. Deviation

Cronbach’s Alpha

1 2 3

(1) Perceived Corporate Reputation 4,011 0,819 ,92 (2) Affective Commitment 3,425 1,041 ,94 ,606** (3) Job Satisfaction 3,318 0,922 ,92 ,487** ,752** (4) Turnover Intention 2,458 1,088 ,90 -,331** -,673** -,614**


**. Correlation is significant at the 0.01 level (2-tailed).

As seen in Table 1, correlations among all variables reveal that perceived corporate reputation, affective commitment and job satisfaction are significantly negatively related to turnover intentions (r = -0.331, r = -0.673, r = -0.614 respectively; p < 0.001). Further, perceived corporate reputation is found to be significantly positively correlated with affective commitment and job satisfaction (r = -0.606, r = -0.487 respectively; p < 0.001). Thus, our first hypothesis (H1) that perceived corporate reputation is positively related to organizational commitment; our second hypothesis (H2) that perceived corporate reputation is positively related to job satisfaction, and our third hypothesis (H3) that perceived corporate reputation is negatively related to turnover intentions were supported.

In order to explore the possible contribution of perceived corporate reputation on predicting turnover intentions of employees we performed a series of (hierarchical) regression analyses. By doing so, we expected to understand the relative portions of unique variances in the respondents’ turnover intentions accounted for by each variable involved (i.e., affective commitment, job satisfaction and perceived corporate reputation). The hierarchical regression analysis was performed in three steps. In the first step, only affective commitment is included in the regression model. In the second step, job satisfaction was included as the second antecedent variable. Finally, in the third step, perceived corporate reputation was included in the regression model in order to see the changes in the parameter estimates. Table 2 shows the parameter estimates and the incremental variance explained in turnover intentions in each regression model.

Table 2: Hierarchical Regression Analysis with Turnover Intentions as Dependent Variable

Step Variable(s) Beta t Sig. R2 R2 F 1 Affective Commitment -0,673 -13,39 0,001 0,452 0,452 179,28***

Affective Commitment -0,486 -6,522 0,001 2 Job Satisfaction -0,248 -3,328 0,001

0,479 0,027 99,338***

Affective Commitment -0,560 -6,891 0,001 Job Satisfaction -0,258 -3,48 0,001

3

Perceived Corporate Reputation 0,134 2,186 0,030

0,490 0,011 68,978***

***. P<0.001


As expected, respondents’ affective commitment to their organizations is significantly negatively related to their turnover intentions. Affective commitment itself, explains 45% of the variance in turnover intentions (p<0,001). After the inclusion of job satisfaction at the second stage, the amount of explained variance in turnover intentions increased by 2,7% to an overall level of 47,9%. Job satisfaction is significantly negatively related to turnover intentions, as well. However, inclusion of job satisfaction in the regression model reduced the standardized regression coefficient linking organizational commitment to turnover intentions from -0,673 (the simple correlation coefficient between commitment and turnover intentions) to -0,486. In the last step, after the addition of perceived corporate reputation as a predictor variable, the amount of total explained variance in turnover intentions increased to 49%. Thus, the last hypothesis proposing that perceptions of corporate reputation significantly improves the predictive power of affective commitment and job satisfaction when predicting turnover intentions (H4) was also supported. Inclusion of perceived corporate reputation in the regression model increased the standardized regression coefficients of organizational commitment and job satisfaction, too. Nevertheless, the positive and significant beta coefficient of perceived corporate reputation indicates a reversed effect of this variable on turnover intentions. When analyzed independently, perceived corporate reputation is negatively correlated with turnover intentions. But when it is jointly analyzed with affective commitment and job satisfaction, the relation turned into positive.

5. Conclusion

In this study, we examined the independent and joint effects of perceived corporate reputation, affective commitment and job satisfaction on employees’ turnover intentions. For this aim, we collected data from a convenience sample of employees working in the higher education industry. Participants’ perceptions of their organizations’ reputation, their level of affective commitment, job satisfaction and intentions to leave are measured by multi item scales. Correlations among the variables are tested in order to understand the independent relation of each variable with turnover intentions. It is found that, perceived corporate reputation, affective commitment and job satisfaction are significantly negatively related to turnover intentions. Further; perceived corporate reputation is found to be significantly positively correlated with affective commitment and job satisfaction. These findings are consistent with the previous research results depicting the positive relationships between corporate reputation and employee commitment and job satisfaction (Riordan et al. 1997; Carmeli and Freund, 2002; Carmeli et al. 2006; Brammer et al. 2007). Our findings are also consistent with the literature documenting the negative relationship between corporate reputation and employees’ intentions to quit (Fombrun, 1996; Herrbach et al, 2004). Perceived corporate reputation is an important asset of organizations which may help them to enhance the performance of human resources. Administrators should consider improving the perceived corporate reputations within the eyes of employees. Thus, a higher employee commitment, job satisfaction and a lower turnover intention among the employees could also be achieved easier.

In order to understand the relative effects of perceived corporate reputation, affective commitment and job satisfaction on turnover intentions, we performed a series of hierarchical regression analyses. Regression analyses revealed that, when jointly assessed, affective commitment and job satisfaction still have negative effects on turnover intentions. Hierarchical regression analyses also revealed that-contrary to its independent effect on turnover intentions- perceived corporate reputation surprisingly positively influenced turnover intentions, when jointly analyzed with affective commitment and job satisfaction. This finding opposes to the previous research results in the relevant literature. A possible explanation to this contradiction may be the sampling frame used in this study. Our sample consisted of academic staff working in two state universities, and they are ultimately public servants. Further investigation of the


issue within a new sampling frame consisted of private sector employees may provide a different insight. Thus, these findings need to be further investigated and validated within other sampling contexts.

These results provide important managerial implications concerning organizational behavior. An important implication of these findings is that, they demonstrate the importance of constituting a favorable reputation in the eyes of the employees in order to enhance commitment, satisfaction and reduce turnover. As noted earlier, a favorable organizational reputation is a strategic resource that provides significant competitive advantage to a company. A positive corporate reputation is highly valued because it helps to attract and retain talented human resources. The results of this study support the rational relationship between employees’ perceptions of their organization’s reputation and their commitment, job satisfaction, turnover intentions. Employees are essential to an organization’s performance. More committed, highly motivated and satisfied employees are key elements of a better organizational performance. Further, employees’ role is critical in the creation and maintenance of corporate reputation. They are the primary interface with customers, suppliers, and other key partners, and their actions, both positive and negative, can affect how the company is perceived by other constituents such as customers and business partners. Attracting high quality applicants is the first, and perhaps the most important, human resource management practice. The effects of subsequent human resource practices depend upon the quality of job applicants (Turban and Cable, 2003). Managers should recognize the significant relationships between perceived corporate reputation and key employee behavior in order to develop and maintain strategic human resources practices.

6. Limitations and Future Research Directions

The study has some limitations. First of all, it was conducted with the use of a convenience sample in a contrived setting. There is a need to replicate this research with the use of more representative random samples. Future studies would gain external validity by using probability samples of wider populations. Further, this study is based on cross-sectional design and thus cannot make causal inferences. However, the results of our model provide some preliminary support for the relationship between perceived corporate reputation and employee behavior. Future research may take a longitudinal design to overcome this limitation. Future studies may also examine the corporate reputation construct from the eyes of both the organization’s internal members and the external stakeholders such as customers, suppliers and investors. By doing so, a possible effect of single source bias may be restrained in advance. It may also enrich the the validity of the findings by taking diversified views into account. Last, but not the least, replicating the study in different sectors both concerning the public and private ownership status and the type of industry may also provide deeper insights.

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