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The dynamics of organizational reputation and status: momentum and volatility

Eunjung Kim (SKK Business School, Sungkyunkwan University, Seoul, Republic of Korea)
Tohyun Kim (SKK Business School, Sungkyunkwan University, Seoul, Republic of Korea)
Mooweon Rhee (School of Business, Yonsei University, Seoul, Republic of Korea)

Management Decision

ISSN: 0025-1747

Article publication date: 11 January 2021

Issue publication date: 6 September 2021

Abstract

Purpose

Organizational reputation and status are similar yet distinct constructs, serving as signals conveying information about an organization and its products and thus constituting audiences' perceptions about the organization. However, compared to status, reputation tends to change more dynamically over time. In this study, the authors argue that the dynamic traits of reputation – particularly, its momentum and volatility – may serve as additional signals and/or noises, influencing potential exchange partners' perception about the organization and thereby determining its status.

Design/methodology/approach

The authors test our hypotheses in the context of the US venture capital firms between 1990 and 2010. The authors collected 8,793 firm-year observations of 1,186 VC firms and used the Arellano–Bover/Blundell–Bond dynamic panel estimation method to estimate their model.

Findings

The authors’ findings show that reputation momentum has a positive effect on status, whereas reputation volatility does not have a significant direct effect. However, the authors found that volatility has indirect effects on status, serving as a noise weakening the signaling effects of reputation and its momentum.

Originality/value

This paper contributes to the literature on organizational reputation and status by suggesting the importance of considering the dynamic traits of organizational reputation, which are indeed the crucial factors that distinguish reputation from status. Also, this study provides managerial implications for the organizations that aim to enhance their status through managing their reputation.

Keywords

Acknowledgements

The authors wish to thank Brandon Randolph-Seng, João Ferreira, and anonymous reviewers for their insightful comments and suggestions on an earlier version of this paper. This work was supported by the Ministry of Education of the Republic of Korea and the National Research Foundation of Korea (NRF-2020S1A5A2A01045000) to Mooweon Rhee.

Citation

Kim, E., Kim, T. and Rhee, M. (2021), "The dynamics of organizational reputation and status: momentum and volatility", Management Decision, Vol. 59 No. 10, pp. 2442-2455. https://doi.org/10.1108/MD-06-2020-0711

Publisher

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Emerald Publishing Limited

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