How organisational image affects employee attitudes

Olivier Herrbach and Karim Mignonac Universit des Sciences Sociales, Toulouse, France Human Resource Management Journal, Vol 14, no 4, 2004, pages 76-88

Organisational image has mostly been studied using an external perspective focused on strategy and marketing issues. Given its salience in employees symbolic environment, however, image may also have internal as well as external consequences. Yet, the potential impact of image on internal HR aspects has received only pminimal interest from researchers. This article presents the results of a study that explored the impact of perceived external prestige (PEP) on three individual outcomes: job satisfaction, affective organisational commitment and affective wellbeing at work. It is based on a survey of 527 French managers. The ndings show that all individual outcomes are related to PEP. Moreover, it was found that the impact of corporate image on some of the outcomes was stronger for individuals working in sales/marketing than for other employees. Contact: Olivier Herrbach, LIRHE, Universit des Sciences Sociales, 31042 Toulouse Cedex, France. Email: herrbach@univ-tlse1.fr

atch and Schultz (1997) argue that in the current business environment the boundary between the internal and external aspects of contemporary corporations is breaking down because of the increased interactions between organisational members and external actors. In this context, organisational identity should be viewed as a bridge between the external position of the organisation in the marketplace and its internal environment. It serves as a symbolic framework interpreted both by outsiders to form meanings about the company and by organisational members to infer their own individual identity. The perception of an organisations identity from the outside is captured by the notion of organisational image ie the externally produced symbols and interpretations made by outsiders about the company (Whetten and Mackey, 2002). An organisations image exerts a direct inuence over its external stakeholders such as clients, suppliers, shareholders etc. However, it also indirectly inuences internal stakeholders, particularly the employees, through their perception of how outsiders view the organisation (Bird et al, 1989). As stated by Hatch and Schultz (1997: 361), Who we are is reected in what we are doing and how others interpret who we are and what we are doing. As a result, corporate image should be of growing interest not only to marketing and strategy professionals but also for HRM purposes. Three major reasons account for this relevance of corporate image to HR professionals. First, research has shown that companies are more likely to attract quality applicants if they convey to them a positive image (eg Cable and Graham, 2000; Greening and Turban, 2000). Next, organisational image could be helpful not only in attracting, but also in retaining, employees. Although this possibility has received less attention, image may have an impact on both organisational and personal factors in the classical models of
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turnover (Carmeli and Freund, 2002). Last, organisational image is likely to inuence employee attitudes and behaviour in the workplace through its salience in individuals symbolic environment. The development of internal communications practices (for instance, those that are embodied in the notion of internal marketing) are evidence that companies are trying to build on image effects internally. However, such attempts may prove more difcult to manage than is commonly believed (Meijs, 2002). Moreover, the alleged benecial impact of image on employee attitudes and behaviour is still to be empirically demonstrated. While research has shown that organisational image influences organisational identication (Smidts et al, 2001), there has been only slight evidence for the inuence of image on other individual outcomes. To our knowledge, only two studies (Carmeli and Freund, 2002; Riordan et al, 1997) have attempted to link organisational image to a wider array of variables including job satisfaction, turnover intentions, organisational commitment and organisational citizenship behaviour. Therefore, this topic is clearly worthy of further inquiry as the positive impact of a corporations image seems to be more taken for granted than demonstrated. This article presents the result of a study that has attempted to link corporate image, operationalised through the notion of perceived external prestige, to three individual outcomes: job satisfaction, affective organisational commitment and affective states at work. These variables were selected because research has shown their inuence on several important HR outcomes such as motivation, performance and turnover. The research was based on a questionnaire survey of a sample of 527 French managers. This sample was further divided into two sub-samples to test a potential differentiated impact of corporate image: a sales/marketing sub-sample and a non-sales/marketing sub-sample. The rationale for this distinction is elaborated on below. CONCEPTUAL FOUNDATION AND HYPOTHESES Perceived external prestige This research uses the notion of perceived external prestige (PEP) to account for organisational members perception of their companys image. PEP, also called construed external image (Dutton et al, 1994), is a concept describing the way members interpret and assess their organisations reputation based on their exposure to information about the organisation. Therefore, whereas organisational image refers to outsiders beliefs about an organisation, PEP refers to members own views of outsiders beliefs (Mael and Ashforth, 1992). In this research PEP is assumed to be related to several beneficial outcomes: job satisfaction, affective organisational commitment and pleasant affective states at work. The theoretical argument for including each of these variables is now outlined. Job satisfaction Following the most recent approach of the satisfaction construct, job satisfaction is conceptualised here as a positive (or negative) evaluative judgment one makes with regard to ones job or job situation (Weiss, 2002) and therefore as an evaluation and not as affect. Extrinsic satisfaction is derived from the evaluation of the rewards bestowed on the individual by peers, superiors or the organisation, which can take the form of recognition, status, compensation, advancement and so forth. Intrinsic satisfaction is derived from evaluating the perceived rewards of actually performing
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the work and experiencing feelings of accomplishment, self-actualisation or identity with the tasks. PEP is assumed to have an inuence on extrinsic satisfaction, because a good reputation provides the individual with the symbolic rewards of organisational membership. On the other hand, as intrinsic satisfaction is related to the work performed in itself and not to the organisation, it is assumed that PEP does not inuence it. We therefore stated the following hypothesis: Hypothesis 1: PEP is positively related to extrinsic job satisfaction. Affective organisational commitment Organisational commitment is traditionally defined as a strong belief in, and acceptance of, an organisations goals, willingness to exert considerable effort on behalf of the organisation, and a strong desire to maintain membership in the organisation (Mowday et al, 1979). It has been associated with various beneficial individual and organisational outcomes (Mathieu and Zajac, 1990; Meyer et al, 2002). The current view of organisational commitment is that it is a multi-dimensional construct with three components: affective, continuance and normative. Since affective commitment is based on the individuals identication with the organisation ie on deriving at least part of ones identity from belonging to the organisation (Meyer and Herscovitch, 2001) it is hypothesised that PEP has an impact on the level of affective commitment of an employee: a positive image favours commitment through identification, while a negative image may prevent commitment because the employee cannot boost his or her self-image through membership in a valued organisation. The following hypothesis was therefore tested: Hypothesis 2: PEP is positively related to affective organisational commitment. Affective well-being at work Work is more and more considered as an affective experience that both generates emotional states and is inuenced by them (Brief and Weiss, 2002). Organisational image is likely to generate pleasant affective states for three major reasons. First, in coherence with Affective Events Theory (Weiss and Cropanzano, 1996), a positive image can lead to events that generate pleasant affective states. For instance, meeting an external party who appreciates the reputation of the company, seeing an advertisement, or reading favourably about the company in the newspaper are events leading to pleasant affect for organisational members. In that sense, as two outcomes of actual corporate image, PEP and affective states should be related. Secondly, perceived external prestige has been shown to be positively related to the strength of individuals organisational identification (Smidts et al, 2001), which is likely to generate pleasant affect through its role in self-esteem (Ellemers et al, 2002). Thirdly, there is evidence that stronger organisational identication favours more cooperative behaviour among colleagues (Bergami and Bagozzi, 2000; Dukerich et al, 2002), which further leads to pleasant affect. We therefore stated the following hypothesis: Hypothesis 3: PEP is positively related to experiencing pleasant affective states at work. Sales/marketing versus non-sales/marketing managers A further aim of this study was to nd evidence of a differentiated effect of corporate image on sales/marketing managers versus other managers. The rationale for this differentiated impact is twofold. First, sales and marketing peoples boundary78 HUMAN RESOURCE MANAGEMENT JOURNAL, VOL 14 NO 4, 2004

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spanning jobs make them particularly aware of, and dependent on, their companys image. For marketing managers, the impact of image has been shown to inuence not only marketing outcomes but also the marketing process itself (eg Weiss et al, 1999). As for sales professionals, they have evolved from short-term transaction-oriented sellers to long-term relationship managers (Sharma, 2001). As such, their companys image becomes all the more relevant. Secondly, the personal characteristics of managers working in sales/marketing may be different from those of other managers. For instance, Soyer et al (1999) showed that individuals working in sales, as well as those previously employed in sales, were on average more narcissistic and had stronger needs for achievement than individuals who never held a sales job. We feel that this could make them more sensitive to their companys image. The following hypothesis was therefore tested: Hypothesis 4: The inuence of PEP is stronger for sales/marketing than for non-sales/ marketing individuals. METHOD Sample and data collection procedure A questionnaire was mailed to 1,500 French managers. These individuals were recent (<10 years) business graduates of two educational institutions: one Parisian university and one provincial university. The collection process was anonymous. Eventually, 527 usable questionnaires were returned. Subtracting 59 questionnaires that were returned undelivered due to change of address, a response rate of 36.6 per cent was achieved. Mean age of the respondents was 32 years, and 50 per cent of the sample was female. About two-thirds of the respondents were employed in service companies (retailing, banking, consulting etc ) and the remainder in industrial companies. The sales/marketing sub-sample size was 229, and the other sub-sample contained 298. The major functional areas of the latter sub-sample were accounting, finance and general management. Measures Existing, established scales were used in measuring the research constructs. Because the study was conducted in French, measures developed in English were taken from previous published studies that translated them into French using a standard translation/back translation procedure: we relied on the work of LIRHE researchers (Neveu, 1996; Roussel, 1996) and on the Geneva Emotion Research Group for the emotional variables (Scherer, 1988). The measure of PEP used in this study was based on Mael and Ashforths (1992) organisational prestige scale that has six items with ve-point disagree/agree scales (sample item: People in my community think highly of my company). This instrument generated a unitary factor structure and had a good degree of internal reliability (alpha = .86). Job satisfaction was measured by the Minnesota Satisfaction Questionnaire (MSQ, Weiss et al, 1977). We used the short form of this instrument, which is recognised for its validity and widely used in international research. Moreover, in terms of coherence with our evaluative approach of satisfaction, the MSQ has been shown to be the most cognitive ( ie affect-free) measure of job satisfaction (Brief and Roberson, 1989). The instrument evaluates satisfaction with 20 job aspects using five-point scales. Weiss et al (1977) suggest that the MSQ may be viewed as two
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separate sub-scales measuring extrinsic satisfaction and intrinsic satisfaction. Extrinsic job satisfaction was therefore measured as a sub-scale of the MSQ consisting of six items (alpha = .72), while intrinsic satisfaction was evaluated as a sub-scale consisting of 12 items (alpha = .83). Organisational commitment was assessed with the instrument developed by Meyer et al (1993). This has been widely used in academic research, and consists of three components. In this study only the affective component of organisational commitment was used; it was measured by six items with ve-point scales. A sample item is: I do not feel emotionally attached to this organisation (reversed). The internal reliability coefcient of the instrument was .80. Affective states at work were measured using the Job-related Affective Wellbeing Scale (JAWS) developed by Van Katwyck et al (2000). The JAWS is a 30-item instrument designed to assess peoples emotional reactions to their job. Each item is an emotion, and respondents were asked how often they had experienced each of them at work over the previous 30 days (1 = Never ; 2 = Occasionally; 3 = Sometimes; 4 = Often; 5 = Very often). The one-month period was selected because of the potential retrospection difficulties when using longer time frames. The French words were taken from the list validated by the Geneva Emotion Research Group (Scherer, 1988), which was specically developed for intercultural research on emotions to ensure correct denotational and connotational meanings in different languages. As the JAWS has items that reflect both pleasant and unpleasant emotions, the unpleasant emotion items were reverse scored before combining them with the oppositely worded items to generate a total pleasantness score for each individual. Next, respondents were asked to indicate their gender, age, organisational tenure and the size of their organisation. Positive and negative affectivity were also used as control variables in the multiple regression analyses. Positive affectivity refers to the disposition of individuals towards feeling good in life, while negative affectivity refers to the dispositional tendency to experience negative emotions across situations and time (Watson et al, 1988). They were included in the study because of their potential bias and substantive influences in self-report studies (Munz et al, 1996), and were measured using two three-item scales taken from the Multidimensional Personality Questionnaire, an instrument that has been shown to demonstrate good convergent and discriminate validity in relation to other variables (Watson, 1988). The internal reliability coefficients for positive and negative affectivity were both .62. RESULTS The descriptive statistics and correlations among the study variables are presented in Table 1. Preliminary findings confirm the expected correlations between PEP and extrinsic job satisfaction (r = .38), affective organisational commitment (r = .22) and affective well-being (r = .30). Although it was not expected, intrinsic job satisfaction was also significantly correlated with PEP (r = .21). The size of the correlation coefcients suggested no problem of multicollinearity. Among the control variables, only company size was correlated with PEP. Table 2 next presents the hierarchical regression analyses predicting the outcome variables using PEP. The initial equation regressed the outcome variables on the control variables. Affectivity variables were found to be signicant in predicting all dependent variables, thus providing support to the influence of dispositional
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TABLE 1 Descriptive statistics, intercorrelations and reliability coefcients (N = 527)

SD 1 2 3 4 5 6 7 8 9 10 11 12

Variable

Range

Mean

1. 5.73 .50 3.99 .55 .68 .88 .64 .59 .88 .55 .75 .08 -.03 -.02 .04 .05 .12** -.07 .10* .01 .14** -.05 .12** -.07 .28** -.08 .13** .26** .07 .08 .05 .02 .03 -.06 .14** .19** -.15** -.02 -.04 .09* .13** -.18** -.19** -.01 -.44** -.08 -.00 -.04 .16* .02 -.05 -.09* (.62) (.72) .40** .29** .47** .38** (.83) .29** .52** .21** (.80) .39** .22** -.11** -.12** .23** -.10* -.01 (.62) -.11* -.05 -.04 .12** .01 .57** -.06 .04 -.26** -.01

Occupation a .50

1-2

1.57

2.

Age

23-61

32.01

3.

Gender b

1-2

1.50

4.

Organisational tenure

1-27

4.36

5.

Size c

1-3

2.76

6.

Positive affectivity

1-5

3.63

7.

Negative affectivity

1-5

2.73

8.

Extrinsic satisfaction

1-5

3.29

9.

Intrinsic satisfaction

1-5

3.76

10. Affective commitment

1-5

2.93

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11. Affective well-being

1-5

3.45

(.92) .30** (.86)

12. Perceived external prestige

1-5

3.76

* p < .05 ** p < .01 a 1 = sales/marketing, 2 = other b 1 = male, 2 = female c 1 = small, 2 = medium, 3= large

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TABLE 2 Multiple regression analyses predicting outcome variables

Extrinsic satisfaction Step 1: control variables Occupation (A) Age Gender Tenure Size Positive affectivity Negative affectivity R2 change Step 2: main effect Perceived external prestige (B) R2 change Step 3: interaction effect Ax B R2 change Adjusted R2 F-value
* p < .05 ** p < .01 *** p < .001 Coefcients are standardised betas

Intrinsic satisfaction

Affective commitment

Affective well-being

.21*** -.19*** -.08 .07 .08 .13* -.17*** .12***

.10* .03 .02 .04 -.07 .13** -.19*** .07***

-.04 -.09 -.12** .35*** -.13** .18*** .00 .13***

.08* .07 -.04 .09 -.01 .25*** -.42*** .27***

.33*** .11***

.20*** .04**

.23*** .05***

.25** .06***

-.50* .01* .22 17.47***

-.16 .00 .09 6.66***

.08 .00 .16 12.29***

-.50* .01* .33 29.36***

characteristics on individual outcomes (eg Judge and Hulin, 1993). In the second step, PEP was added, and in the third step the interaction term (PEP x occupation). The results show evidence of a main effect of PEP on extrinsic satisfaction (beta = .33), affective commitment (beta = .23) and affective well-being (beta = .25). Hypotheses 1, 2 and 3 were therefore validated. PEP also had a main effect on intrinsic satisfaction (beta = .20). The fourth hypothesis required an examination of the PEP x occupation interaction. As shown in the regression results, the interaction term had a signicant contribution to extrinsic satisfaction (beta = -.50) and affective well-being at work (beta = -.50). This shows that sales/marketing respondents were different with respect to two of the three outcomes, therefore supporting hypothesis 4. In order better to grasp the impact of this interaction, both dependent variables were regressed on PEP for the two occupational groups. Table 3 provides the results of the analyses. The standardised regression coefficients appeared to be larger for the sales/marketing sample, both for extrinsic satisfaction (beta = .43 vs beta = .26) and for affective well-being (beta = .31 vs beta = .18). This confirms the results of the moderated regression analysis in that an increment in PEP seems to be followed by a larger increase in extrinsic satisfaction and affective well-being for sales/marketing people compared with other respondents.
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Table 3 Sub-sample-based multiple regression analyses

Extrinsic satisfaction Sales/marketing Step 1: control variables Age Gender Tenure Size Positive affectivity Negative affectivity R2 change Step 2: main effect Perceived external prestige R2 change Adjusted R2 F-value Extrinsic satisfaction Other Affective well-being Sales/marketing Affective well-being Other

-.09 -.07 -.01 .20** .11 -.19** .10***

-.26*** -.09 .12 .00 .16** -.17** .10***

.02 -.02 .05 .10 .19** -.47*** .28***

.14* -.06 .09 -.09 .31*** -.39*** .30***

.43*** .17*** .25 11.69***

.26*** .06*** .15 8.22***

.31*** .09*** .34 17.68***

.18*** .03*** .32 20.63***

* p < .05 ** p < .01 *** p < .001 Coefcients are standardised betas

DISCUSSION AND CONCLUSION These results provide evidence of the relationship between organisational image and employee outcomes. PEP was found to be related to job satisfaction, affective organisational commitment and affective well-being at work. Our work therefore conrms the two previous articles that have studied this topic, while extending the ndings to both a larger and more diverse population. Indeed, whereas Riordan et al (1997) based their study on 174 employees from one small US electric utility company, and Carmeli and Freund (2002) on a sample of 195 lawyers in Israel, this study used a larger sample of 527 management-level employees working in different private-sector organisations. We also tested a differentiated impact of PEP for sales/marketing people versus other managers and found that it was partially supported. This supports the contention that, although relevant for all management-level employees, image issues seem to be stronger for this category. The impact of PEP on individual outcomes can be interpreted in two ways. First, to the extent that individuals identify with a group out of a need for self-categorisation and a need for self-enhancement (Smidts et al, 2001), members can feel pride in belonging to a community that enjoys social prestige; they can, at least in part, base their identity on organisational membership. This brings about individuals commitment to the organisation, since they want to pursue their association with it in order to maintain the benefits for their own identities. It also leads to a higher frequency of pleasant affective states at work.
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From a more evaluative point of view, the appraisal employees make of the extrinsic value of their job takes into account the image of the corporation. A strong PEP is therefore likely to lead to extrinsic job satisfaction. In addition, this study has shown the signicance of the relationship between PEP and intrinsic job satisfaction. A strong PEP therefore not only leads to more extrinsic satisfaction, but also promotes a more positive perception of ones own job. In other words, it could be that when outsiders perceive a company positively, this has a positive influence on how its employees perceive working within the company. In that sense, PEP could act as a cognitive bias in the evaluative process on which satisfaction is based. Another explanation could be that a strong PEP brings about pleasant affect, which in turn generates a perceptual bias with a constructive inuence on how individuals evaluate their work: an employee high in pleasant affect may selectively perceive the most favourable aspects of a job, thereby increasing his or her job satisfaction (Weiss, 2002). Next, our study found evidence of a differentiated impact of PEP according to the occupation of the respondents. There are at least two possible explanations for this. First, as the most status-conscious sub-sample, sales and marketing people could be more sensitive to the effect of their companys image. In that case, the stronger impact of PEP for this category is further evidence of how people can use their companys prestige to generate job satisfaction. The second explanation could be that a more prestigious company makes sales and marketing peoples jobs easier in dealing with external stakeholders, thereby having a direct impact on their experiences through the benecial impact of their companys image on their actual work, work conditions and perceived rewards. In particular, it is easier to sell their products if the rm has a positive image. Therefore, the added impact and explanatory power of PEP on job satisfaction and pleasant affective states for the sales/marketing sub-sample versus the other sub-sample could be due to what is added above and beyond the indirect identity effect of a positive image. The boundary-spanning dimension inherent in sales/marketing roles may also have made PEP more salient and thus more inuential than for other occupational groups. This interpretation is coherent with the ndings for organisational commitment. It has to be recalled, indeed, that a differentiated impact of PEP was not found for organisational commitment. This result is interesting in that it could be evidence of the deep nature of organisational commitment compared with the more situated nature of job satisfaction (Rousseau, 1998). As stated by this author, deep processes alter individuals mental models of self in enduring ways through continuous identication in an organisation, which brings about commitment. This process is probably more independent from occupational status than a situated process such as job satisfaction which arises from immediate environmental stimuli. While we found evidence for the relevance of organisational image for HR purposes, some caution in interpreting the results is warranted since there are limitations to the present studys ndings. First, we cannot completely rule out the presence of bias due to common method ie having used a self-evaluation instrument that might have inuenced the strength of the relationships between our constructs. Indeed, when measures are single source, and data is collected at the same time, there may be a risk of over-estimating the correlations between constructs (Podsakoff et al, 2003). However, the focus of our study was on individuals perceptions (ie how they respond to the reality they see, or socially construct), so that the inuence of using a percept-percept research methodology is not necessarily problematic (Crampton and Wagner, 1994). As argued by Spector (1994), this design is useful in providing a picture of how people feel about and view their jobs.
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Another limitation of this study is that the direction of the PEP-outcome relationship could be questioned. We postulated that perceived external image inuences individual outcomes, but the reverse could also be argued ie commitment or other outcomes could lead to perceiving that ones organisation has a positive image. Also, it could be possible that the observed relationships are a result of their relationship with another variable, especially with actual reputation. Indeed, if a rm has a good reputation, this is likely to make peoples job more comfortable, especially for sales/marketing people. This in turn inuences both the respondents experiences and their perceptions of the external image of the company. More elaborate research designs should be used in future studies to tackle these shortcomings and to expand our knowledge about this understudied topic. Despite its limitations, however, we feel that this research has several managerial implications. First, it has provided evidence of the interrelations between external and internal stakeholders. Not only are external groups images of the organisation inuenced by the images that employees project, but external groups also inuence employees experiences through the feedback they provide. As already suggested by Hatch and Schultz (1997), this breakdown of the internal-external boundary means that management should increasingly communicate internally about organisational strategy in reference to external constituencies. In other words, managing organisational identity to derive HR benefits must take into account the external image, as well as the specic ways employees perceive it. Corporate identity can, however, never be wholly managed (Meijs, 2002). It, too, is a result of complex processes involving how organisational members interpret, enact and respond to the deliberate creation of a corporate identity by management, and how they construct their sense of identity in ways that lie outside managements influence (Alvesson and Willmott, 2002). In that respect, an important issue that deserves to be highlighted is the fact that organisations need to project consistent images to their internal and external stakeholders. Given the interrelations between insiders and outsiders, incongruence between what is projected outwards and what is fed back into the organisation is likely to generate problems. For instance, concerning communication tools such as value, vision or mission statements, some authors have stressed their possible irrelevance when they are disconnected from the daily experiences of employees (Murphy and Davey, 2002). Openly espoused values that are considered by employees as merely cosmetic may even backfire and breed cynicism, because they do not match the deeply rooted norms of the company. Likewise, concerning the internal consequences of advertising, Gilly and Wolnbarger (1998) suggest three qualities that employees use in their evaluations of organisational advertisements: accuracy, value congruence and effectiveness. Last, this study about the effect of corporate image should also be a reminder that, despite radical changes in todays business environment and the challenges they pose to the possibility of worker identication, identication mechanisms continue to be present in the workplace. Given the pervasive human need to identify with the social system of which one is a part, individuals may still have a strong desire to believe that they are a part of the settings in which they work as argued by Rousseau (1998), this is why workers still identify with organisations. Companies should be aware that tying employees identity to their employer, and reaping the benets of this, is easier if the employer is perceived to be worthy of it.

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