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Abstract
Corporate reputation has been discussed widely in both academic journals and the popular press. Scholars in management, marketing, and accounting have offered methods by which the economic value of a company's reputation can be estimated. Corporate reputation has been described generally as being determined by a company's relationships with four major constituencies: shareholders, customers, employees, and its community.
This study investigated the effect of corporate reputation on consumers, evaluations of the quality of products of a supplier. It was hypothesized that consumers would use information pertaining to a company's reputation as a cue in their evaluation of the quality of a crystal vase, a product whose quality was difficult to determine objectively. The method employed was a 2 x 2 x 2 x 2 factorial experimental design in which the four components of reputation were manipulated in a set of 16 scenarios. Subjects responded to scale items that measured their assessments of the supplier's reputation, the level of product quality that consumers expected from the company, and assessments of the four component relationships as a manipulation check. Following a period of inspection of the vase, subjects assessed the quality of the vase in a three item perceived quality scale.
Analysis of variance revealed that the main effect of each of the component independent variables was significant and no significant interaction was observed. Also, a structural equation model analysis showed strong paths between the constructs of reputation, expected quality, and perceived quality.
This study found that the reputation of a supplier, expressed in terms of its relationship with its shareholders, customers, employees, and community, produced a predictable effect on both consumers' expectations of quality and their perceptions of a subjectively evaluated product. No effects related to demographic variables were found to be significant.
