Economic pressures and rising stakeholder expectations have led public sector organisations to measure their reputation. The paper aims to highlight the importance of reputation for the public sector, define sector reputation and report findings on a quantitative study of sector reputations of four different types of Finnish public sector organisations.
Inspired by stakeholder theory and the value of organisational reputation, a quantitative survey of stakeholder assessments on reputation was carried out in the 12 organisations from the field of the Finnish Ministry of Social Affairs and Health in 2003. The organisations represented four sectors: research, authority‐functions, semi‐commercial functions and legislation. Survey data were first analysed with factor analysis to form five reputational factors for public sector organisations. Further analyses were carried out to compare differences between the organisational types and groups of stakeholders (analysis of variance) and to define the part of the different stakeholders (cluster analysis) for sector reputation.
The paper distinguishes between two major sector reputations: flexible and bureaucratic public sector organisations. Those organisations with more traditional functions (legislation and authority functions) are by reputation labelled bureaucratic, whereas those with more modern functions (research and semi‐commercial functions) are by reputation more flexible. These findings give insight into the strengths and weaknesses in the reputation of different types of public sector organisations, and hence contribute to the body of literature on strategic management of public sector organisations.
Though the concept of sector reputation is universal, the contents of sector reputations are culturally bound. The study was conducted on Finnish public sector organisations, so the results could best be generalised to other Nordic countries. Moreover, reputation is an artificial concept based on stakeholder assessments and perceptions, and does not measure reality as such, though it is associated with stakeholder behaviour.
The results of the paper point toward rather stable, yet specific sector reputations. Knowing the reputational strengths and weaknesses of each type of public sector organisation provides a deeper understanding of how stakeholders perceive different types of organisations, and hence enables suitable allocation of public resources.
The paper will contribute to both theory and practice by addressing the concept of reputation for public sector organisations as well as providing new results on sector reputation. The paper will be of interest to those searching for ways to measure the effectiveness of public sector organisations as well as to those interested in stakeholder relations and strategic management.
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