Fame in the fashion industry
The effect of firm reputation on creative performance
Charity Miller 6373763/10112707
Faculteit Economie en Bedrijfskunde, Universiteit van Amsterdam Bachelor thesis Business Studies
Supervisor: Katinka Quintelier
Academic year: 2012-2013 Semester 2, Block 3
Abstract
Existing literature suggests that organizational reputation has an effect on employee performance and job seekers. However, no research has been done on the effects on creative reputation on the creative performance and what role salary plays in this relationship. This association is examined in this study using a survey that was spread among fashion professionals in the Netherlands, within creative and non-creative functions. Some evidence has been found that there is a positive link between creative reputation and creative performance, although it was not significant. Furthermore, the results suggest that both a high salary and a strong creative reputation are requirements for high creative performance among employees.
Table of Contents
FAME IN THE FASHION INDUSTRY ... 1
ABSTRACT ... 2
1 INTRODUCTION ... 5
2 LITERATURE REVIEW ... 8
2.1 Definitions of organizational reputation ... 8
2.2 Types of organizational reputation ... 9
2.3 Organization reputation and employees ... 10
2.4 Organizational reputation and jobseekers ... 11
2.5 Salary and creative performance ... 12
2.6 Conclusion ... 13 3 CONCEPTUAL FRAMEWORK ... 14 3.1 Creative performance ... 14 3.2 Creative employees ... 15 3.3 Job seekers ... 16 3.4 Salary... 17 4 METHODOLOGY ... 20 4.1 Research design ... 20 4.2 Data collection ... 20 4.3 Measures ... 21 5 RESULTS ... 24 5.1 Descriptive statistics ... 24 5.2 Factor analysis ... 25
6 DISCUSSION & CONCLUSION ... 33 7 REFRENCES ... 36
1 Introduction
A firm’s reputation is one of its most valuable assets. It takes a considerable amount of time to develop and it depends on making stable and consistent investments over time (Dierickx and Cool, 1989). This is no different in the fashion industry where protecting and maintaining a good reputation is critical. In 2011 Christian Dior wasted no time in taking action after their head designer john Galliano was arrested for using anti-Semitic slurs in a Paris Bar. The next day Galliano got suspended and Dior released at statement making it clear they do not want to be associated with racism and or anti-Semitism.
It is known that reputation is critical to the popularity of the brand with consumers and thus it’s financial success. Roberts & Dowling (2002) demonstrated that a corporate reputation contributes to persistent profitability at firm-level and is therefore an important strategic asset. But reputation can also impact another important asset: human capital. Employees want to feel that their work provides them with a meaningful job that offers room for personal development at a firm they can be proud of (Pruzan, 2001).
Fashion is by nature an evolving phenomenon and especially creative employees are important for constant innovation. Sproles (1981) concluded that he life cycle of new styles start in centers of prestige and creativity that include creative entrepreneurs. Attracting and retaining creative employees is therefore critical to the success of fashion labels. Studies have shown that corporate reputation affects the number of people in a firm’s applicant pool (Turban and Cable, 2003) and the quality of the individuals in the pool (Collins and Han, 2004). Positive firm reputation is also positively linked to job satisfaction of current employees (Helm, 2011; Carmeli & Freund, 2002). However,
existing research on the effect of firm reputation on employees has never made a distinction between creative and non-creative employees.
The positive effect of firm reputation on the applicant pool also suggest firms with a good reputation can choose the best applicants to come work for them and therefore had more capable employees than a firm with a less positive reputation. Likewise, a fashion label with the reputation of producing unique and exciting designs signals that creativity under employees is important., leading to an image of a workplace where creative minds can flourish. Having this reputation could lead to higher
productivity under employees as creative individuals are strongly motivated by opportunities for professional achievement Chalupsky (1953). Remarkably, this link between firm reputation and employee productivity has yet to be established
This study aims to fill this gap and provide more insight into the effect of firm reputation on employees. Furthermore a distinction will be made between creative and non-creative employees. This leads to the main research question: What are the effects of
creative organizational reputation on creative performance in the fashion industry in the Netherlands? These insights are especially useful to top management in the fashion
industry because it provides more awareness about the effects of a positive or negative firm reputation. Consequently the label’s strategy can be adjusted to correspond more with the organization goals.
To answer this question a survey will be held among fashion professionals of which most are located in the Netherlands. The data gathered with this survey will be analyzed to determine the relationship between organization creative reputation and creative performance and if monetary awards moderate this effect.
Following this introduction a literature review will be presented elaborating on existing research on this subject. The next paragraph will propose the conceptual model together with the hypotheses. Then the methodology and results will be presented followed by a discussion and a conclusion.
2 Literature review
In this paragraph the literature relevant to the research topic will be explored. First the definition of organizational reputation will be addressed followed by the types of
organizational reputation. After that organizational reputation will be discussed in respect to current employees and finally the relation between organizational reputation and job seeker perception will be presented. To conclude a short summary will highlight the most important concepts.
2.1 Definitions of organizational reputation
Barnett, M. L., Jermier, J. M., & Lafferty, B. A. (2006) describe organizational reputation as “Observers ’ collective judgments of a corporation based on assessments of the
financial, social, and environmental impacts attributed to the corporation over time.” Wilson (1985) offers a slightly different explanation by defining organizational reputation as the prestige accorded to firms on the basis of how they have performed particular activities in the past. Organizational reputation should not be confused with organizational legitimacy, as both concepts are a result of how a certain company is viewed. For instance, organizational legitimacy can be seen as the generalized perception or assumption that the actions of an entity are desirable, proper, or appropriate (Suchman, 1995, pp. 573-4). Even though organization reputation also relates to the evaluation of company’s action there is an actual difference. What sets organizational reputation apart from organizational legitimacy is that reputation is a comparison to other firms to determine their relative standing (Deephouse and Carter, 2005). Organizational
reputation is therefore by definition a method of judging one organization with respect to another.
In this paper the terms organizational reputation and corporate reputation are used interchangeably. Both phrases have the same definitions, namely the ones described in this paragraph.
2.2 Types of organizational reputation
From the definitions in the previous paragraph it can be concluded that organizational reputation is an assessment of past performances of a company.
As there are different ways to measure performance, there are also different kinds of organization reputation. Rindova, Williamson, Petkova and Sever (2005) concluded that scholars define organizational reputation as either specific assessments of a relevant attribute of a firm or as a collective knowledge about a firm. They conceptualize organization reputation as having two dimensions, perceived quality and prominence. Dollinger, M. J., Golden, P. A., & Saxton, T. (1997) did not only take quality into account but also considered finances and integrity. Product quality and innovation, management integrity, and financial soundness were distinguished as dimensions of organization reputation and they found evidence that organization reputation is indeed built out of different components. This is fairly consistent with Fombrun (1996) who claims that corporate reputation consists of four interrelated characteristics: credibility, reliability, responsibility and trustworthiness.
Although it is evident that organizational reputation is not just one simple homogenous concept previous research has treated it that way while examining the relationship with other elements. In the fashion industry the level of creativity and innovativeness is especially important. Awards handed out to brands, labels or designers are mostly for outstanding or innovative designs. This signals a high level of creativity and adds to the organization’s overall reputation (Quintelier & WIjnberg, 2013). This aspect of organization reputation, creative reputation, has not yet been studied in respect to its influence on other variables, such as employees.
2.3 Organization reputation and employees
Fombrun (1996) also emphasized that corporate reputation is the set of perceptions held by people inside and outside a company. This means that the reputation of a company does not only affect the consumer’s opinion but employees are also aware of how their employer’s reputation. Reputation can even influence employees’ opinion about their job and their employer. Perceived external reputation is positively related to pride in being a member of the organization and with job satisfaction. Furthermore both constructs are negatively associated with turnover intentions suggesting that a positive external
reputation could have a positive impact on employee retention (Helm, 2011). Similarly, perceived external prestige, the belief employees hold about how outsiders view the organization, has been positively linked to affective organizational commitment, organizational citizenship behavior and job satisfaction (Carmeli & Freund, 2002). Additionally Gray and Balmer (1998) state that a favorable reputation from an
employee’s viewpoint can be a prime cause of high morale and productivity. On the other hand, a negative organizational image can lead to embarrassment, discomfort and
decreased self-esteem (Dutton et al., 1994).
Clearly it can be stated that how employees perceive their organization can affect their attitudes and behaviors. In the fashion industry it is also possible to make a
distinction between creative and non-creative employees. Creative and innovative functions differ from non-creative functions in that they have a higher degree of
autonomy. There is more uncertainty how exactly to solve challenges and creative effort is hard to observe by managers. Thus standard control and incentive options cannot always be applied (Sauerman and Cohen, 2000). However the difference between creative and non-creative employees have never been taken into consideration when looking at the effects of organizational reputation on employee behavior.
2.4 Organizational reputation and jobseekers
Most employees working at a company once started off as job seekers, so it is not surprising that organizational reputation also has an effect on this group.
Cable and Turban (2003) concluded that job seekers’ reputation perceptions are positively related to job seekers’ evaluations of a number of job attributes, namely promotion possibilities, challenging and interest work and opportunities for new learning experiences. A positive evaluation of these job attributes in turn leads to higher job pursuit intentions. Furthermore, reputation perception was also positively associated with the pride that job seekers anticipated from organizational membership. Anticipated pride
led to higher job pursuit intentions, but besides that it also had a negative link to the minimum salary that was required by job seekers to accept a position. On average
participants were willing to accept 7% less salary when the firm had a positive reputation than when the firm had a negative reputation. In addition Collins and Han (2004) provide evidence that organizational reputation is positively related to applicant pool quality and quantity. Turban and Cable (2003) confirm that companies with better reputations
attracted more applicants, but no evidence was found that they also attracted applicants of a higher quality, measured by their GMAT score.
These studies give strong evidence that jobseekers are aware of an organizations reputation and that in influences their preference of firms. Nevertheless there is little known about how this differs per industry and if all the aspects of organizational reputation are equally important or not.
2.5 Salary and creative performance
Reputation may not be the only factor that can influence employees and have an effect on their creative performance. For example, Kuvaas (2006) found that the base pay level was positively related to the work-performance, as reported by the employees
themselves. Furthermore it was also positively related to affective unit commitment. That pay is a motivator is confirmed by Judge, Piccolo, Podsakoff, Shaw & Rich (2010) who state that pay is most definitely a reason for people to work as it sustains living. Locke et al. (1980) went so far as to say that financial rewards are the crucial incentive with no other technique having a greater instrumental value.
To conclude, it is likely that tangible rewards like salary also influence creative productively. However, how salary relates with the effect of (creative) reputation on (creative) productivity has never been researched before.
2.6 Conclusion
Organizational reputation is the collective judgment about a firm based on assessments of how certain activities have been performed in the past, in comparison to similar firms. There is evidence that organization reputation is not just one uniform concept but that it consists op multiple distinguishable components. Existing literature suggest these dimensions could relate to quality, innovation, prominence, financial position and
integrity. Research suggests that perceived organizational reputation could have an effect on employee attitudes by positively affecting pride, job satisfaction and morale.
Furthermore it could have a positive influence on favorable employee behaviors such as organizational citizenship behavior, organizational commitment and productivity. Additionally it is likely that job seekers also react positively to a favorable firm reputation as there is evidence it has a positive effect on job pursuit intentions and
applicant pool quantity. On the contrary a firm reputation could have a negative effect on the minimum salary the job seeker is willing to accept suggesting that employees are content working for lower salary if the firm has a positive reputation. Finally, the salary that employees receive is likely to affect creative performance, but how this goes together with creative reputation has never been looked at in previous research.
3 Conceptual framework
This section will present a theoretical framework as answer to research gap identified in the review of existing literature. First the expected relationship between creative
organizational reputation and creative performance will be discussed. After that the a framework will be presented that takes creative and non-creative employees into account, followed by the expectations concerning job seekers. Finally the expectations about the effects of salary will be stated.
3.1 Creative performance
In the literature review it has become clear that organizational reputation is likely to have an effect on employee behaviors. The behaviors mentioned include organizational
citizenship behavior, organizational commitment and productivity.
This could possibly be related to the positive effect organizational commitment has on pride, job satisfaction and morale as one can argue that a positive attitude might lead to favorable behaviors. There is a high probability that a positive creative reputation also leads to favorable behaviors, specifically creative productivity, for a number of reasons. First, organizations with a positive reputation attract more applicants (Turban and Cable, 2003; Collins and Han, 2004) and can therefore choose the very best. These applicants are likely to be more productive then less capable applicants. Second, a large applicant pool means that is easy to replace employees. Current employees might be concerned that that might happen to them if they are not productive enough. Finally, employees who are
aware that they are working for a company with a strong creative reputation might feel a certain pride that could be an intrinsically motivation to display productive behavior. Consequently it is likely that companies with a strong creative will have more employees that are creatively productive than companies with a weaker creative reputation. Hence the following hypothesis is proposed:
Hypothesis 1: Employees of companies with a stronger creative reputation will display more creative performance than employees of a company with a weaker creative reputation.
3.2 Creative employees
Previous studied have concluded there is a fundamental difference between creative and non-creative functions. In short, creative functions have a higher degree of autonomy, which results in standard control and incentives not always being options. Therefore it is possible that creative employees act more from out an intrinsic motivation than their non-creative colleagues. Creative individuals also strongly associate their identity with the work they do and their achievements (Rostan, 1998). Thus the work itself might be a way to develop and build an identity. It might also be a way to display that identity and gain recognition. It appears that opportunities for achievements at a professional level and the recognition that comes with those achievements are strong motivations for creative people (Chalupsky, 1953). In some ways working for a company with a reputation for making notably creative products can be viewed as a type of recognition of the designer’s
skills. For example, a firm known for its creativity would probably aim to hire very creative individuals for their artistic functions. Consequently being employed by such a company can be regarded an acknowledgement of your creative abilities. It turn this can be a strong motivator for creative people to display creative productive. Overall, these arguments lead to the following hypotheses:
Hypothesis 2: The effect of creative reputation on creative performance will be stronger for employees in creative functions than for employees in non-creative functions.
3.3 Job seekers
Jobseekers are more likely to apply for a job a firm with a positive reputation. Research has shown that firms with a favorable reputation attract more applicants and that these applicants have higher job pursuit intentions. Organizational reputation has always been seen as a uniform concept in these studies. However it is likely that job seekers form their overall opinion about the reputation of a company from their judgment of various types of reputation. For example a jobseekers might look at how reliable the firm is, how finically stable it is and if the firm’s values correspond with theirs. Similarly a strong creative reputation will also have a positive effect on the overall firm reputation and thus on if job seekers would want to work there. Furthermore strong creative is prestigious in the fashion industry and it likely that people would prefer that to a less prestigious firm. This leads to the third hypotheses:
Hypothesis 3: Companies with a stronger creative reputation will be more popular with job seekers than companies with a weaker creative reputation.
3.4 Salary
Previous research has indicated that salary has a positive effect on employee motivation. As motivated employees are more likely to be productive then their less motivated colleagues, it is probable that salary also has an effect on creative productivity. This results in the following hypothesis:
Hypothesis 4: Employees that receive a higher salary will display more creative productivity than employees that receive lower salaries.
A distinction can be made between intrinsic and extrinsic motivation. According to Amabile’s (1993) definition an intrinsic motivation results from employees seeking enjoyment, interest, satisfaction of curiosity, self-expression, or personal challenge in the work. Extrinsic motivation in turn is driven by a factor outside of the work itself,
resulting in employees working hard for the promise of the extrinsic reward.
The company’s reputation on itself is not a motivator, but the effects of working at a company with a strong creative reputation are. As mentioned earlier working for such a company can arouse feelings of pride in the employee and feelings of recognition of their creative abilities. Katzenbach (2003) explains that pride is an intrinsic motivator because it creates an emotional involvement in the work. Sill recognition can be viewed as an
intrinsic motivator as it increases employee’s sense of competence (Thomas, 2000). In contrast, salary is a very clear extrinsic reward; the financial payout is an external factor to the work itself. Frey (1997) states financial work incentives are the main positive interventions used to induce employees to perform. In Kuvaas’ (2006) research base pay was not only positively related to self-reported work-performance and affective unit commitment but these relationships were both partly mediated by intrinsic motivation. This suggests that an extrinsic motivator can actually affect the intrinsic motivation to perform a certain task. Ryan & Deci (2000) conclude extrinsic rewards encourage people to do a task that is not interesting for them. This relationship however exists because other people who they feel connected to value these behaviors. The feeling of connection, or relatedness is the basis for sustaining intrinsic motivation. Therefore it might also be possible that a higher intrinsic motivation substitutes the need for a high external motivator. When looking at creative design extrinsic motivators might even have a negative effect on creativity. In a laboratory setting Amabile (1985) tested how intrinsic and extrinsic motivation affected creativity in young adults. He was not able to find a significant effect of intrinsic motivation leading to higher creativity, but he did find that extrinsic motivation in contrast led to a significantly less creative creation. This suggests that salary will have a negative moderation effect on the relationship between creative reputation and creative productivity. Consequently the following hypothesis is proposed:
Hypothesis 5: A higher salary will decrease the positive effect of creative reputation on creative performance.
Creative individuals have different perceptions of the rewards they attain from doing a certain job. The notion of ‘art for art’s sake’ suggests that artists gain a certain
gratification from doing creative work. This may cause artists to accept wages that are lower than those for a commercial position (Caves, 2003). An explanation therefore could be that creative individuals strongly associate their identity with the work they do and their achievements (Rostan, 1998). Furthermore jobseekers are also willing to accept a lower salary if the organization has a positive reputation (Cable and Turban, 2003). These arguments lead to the final hypothesis:
Hypothesis 6: Employees of companies with a stronger creative reputation will receive a lower salary than employees of companies with a weaker creative reputation.
4 Methodology
This section will present the research design and the methods that will be used to investigate the theory presented in the conceptual framework. Additionally the sample and the measures that will be used to test the hypothesis will be discussed.
4.1 Research design
The research question was studied empirically. An online survey was distributed among fashion professionals in the Netherlands. Participants were selected based on self-selection; those who chose to fill in the survey. The only selection criterion was that all participants have completed a fashion-study in the Netherlands or Belgium. A survey was used because it is an easy and affordable way to reach a lot of people. Because all
questions and answer possibility are the same for all people the method of collecting data is standardize. Therefore it is easy to compare answers draw conclusions. A survey is also administered anonymously, which improves the reliability of the answer in comparison with for example an interview. Using a survey also has some limitations. For one it is very difficult to prove causality. Because of the use of self-selection it is also possible that the respondents did not give an accurate reputation of the fashion community. Finally respondents could have misunderstood what exactly is asked in the survey lowering the validity.
The survey was distributed online, through the website www.qualtrics.nl. The advantages of this include that the survey did not have to be printed and the data does not have to be entered manually. Furthermore people in every location with access to the Internet could fill in the survey. People throughout the whole of the Netherlands could easily be approached.
The questionnaire was available in Dutch and English.
4.3 Measures
4.3.1 Creative organizational reputation
To determine a company’s creative reputation 17 questions were included in the survey about the products that the company makes. As the final product is a display of the creativity that was used to design it, how creative the products are perceived can be seen as a company’s creative reputation.
A factor analysis was used to shed light on the underlying constructs of these 17 items. The results of that analysis show if creative reputation is in fact a distinguishable element of organizational reputation and which questions adequately represent it. All questions are measured using five point Likert scale.
4.3.2 Creative performance
Dekas et al. (2013) divided OCB into seven dimensions: Employee Sustainability, Social Participation, Civic Virtue, Voice, Helping, Knowledge-sharing, Individual Initiative and
Administrative Behavior. The dimension ‘Voice’ was used in this study to conceptualize the measure creative organization citizenship behavior.
The authors define this dimension as “participating in activities, making suggestions, or speaking out with the intent of improving the organization’s products, or some aspect of individual, group, or organizational functioning”. This interpretation has multiple similarities with Mayer’s (1999) definition of creative performance, namely the
production of an idea, action, or object that is perceived as both original and useful. The act of voicing an idea that useful is an important part of both behaviors. Hence this aspect of OCB comes closest to capturing the creative aspect of extra-role behavior that is beneficial to the firm. The scale ‘Voice’ was consequently be used to measure the construct creative performance. It consists of four questions measuring how often the employee voices their opinion, gives suggestions and encourages other to do the same. It is measured using a seven point Likert scale.
4.3.3 Creative and non-creative employees
Creativity is a broad concept that can be used to describe any type of activity that implies designing something. That ‘something’ could range from an actual object to an out-of-the-box idea. Therefore employees can be creative in every task or job that they perform. For the operationalization of this variable in this study a creative person is defined as an employee with a function that requires them to make aesthetic and stylistic decisions. To measure the level of creativity of an individual a distinction was made between
creative functions are designer, stylist and visual merchandiser. Sales manager, warehouse manager and stock controller are examples of non-creative functions.
4.3.4 Popularity with job seekers
The popularity of a function within an organization is measured through a question on the survey asking the respondents to give an indication of the popularity of the organization and his or her job with jobseekers. One of five options could be choose as an answer. The first option was ‘yes, most job in this organization are popular.’ The second and third options were respectively ‘yes, but my job is more popular’ and ‘yes, but my job is less popular’. The fourth option was ‘no’ and the fifth option ‘I don’t know’. These answers were then divided into two categories, the first three options meant that the job was indeed popular and option four and five meant that it was not.
4.3.4 Salary
Salary is measured by the gross monthly income. They respondents could choose out of eleven options. The first option represented a gross monthly salary of less than 1700 euros. The last option was a gross monthly salary of more than 8000 euros. The other options covered all values in between and each option had a range of 700 euro. For example option 2 was a gross monthly salary of 1700 – 2399 euros and the third option was 2400-3099 euros.
5 Results
In this section the results will be provided of the research described in the methodology section. First the descriptive statistics will be presented, followed by a factor analysis to determine the underlying factors of items on the survey concerting organizational reputation. Subsequently calculating Cronbach’s Alpha will test the reliability of these scales. Lastly multiple linear regression is used to test number of propositions.
5.1 Descriptive statistics
Before analyse the data it was screened for outliers and missing values. Although no out of range values were found, there were a large number of missing values. Of the 133 participants that started the survey more than half did not complete it. As a result the data of 69 individuals was eliminated, leaving a sample size of 64.
Of the participants that completed the survey 62,5 percent was female and 37,5 percent was male. 23,4 percent of the participants were currently employed in a creative function and 76,6 percent were employed in a non-creative function. No participants were unemployed. When asked if their current function is popular with jobseekers 57,8 percent answered ‘yes, most job in this organization are popular.’ 10,9 percent perceived their job not only be popular but more so than other function in their organization. 4,7 percent perceived their job to be popular but less so than other functions. Another 4,7 thought their job is not popular at all and 21,9 had no idea if their job was popular. In total 73,4 percent of the respondents perceived their job to be popular versus 26,6 percent that did not.
Table 1 shows the descriptive statics of the other variables.
Table 1: Descriptive statistics of valuations
(N=64) Mean
Value
Std. Error
St. dev. Min. Max.
Age 28,66 0,7847 6,277 20 48
Gross income per month 2,85 0,271 2,120 1 11
Creative Performance (1=never, 7=always)
5,273 0,127 1,015 1 7
5.2 Factor analysis
To be able to construct a variable consistent with creative reputation a factor analysis of the 17organziational reputation items was conducted. Several criteria were used to
examine the factorability of a correlation. First the diagonals of the anti-image correlation matrix were studied to determine the Kaiser-Meyer-value of individual items. Kaiser (1974) recommends that the individual KMO value should be at least 0,5. Two items had an individual KMO below this value, namely “This organization has the reputation that it offers high salaries” (KMO=0,479) and “This organization has the reputation that it makes a lot of profit” (KMO=0,462). Therefore these items have been excluded. The analysis was then done again without these items and the individual KMO for the items was examined again. The item “This company has the reputation for making
products that are popular with a large audience” had an individual KMO value of 0,476 and was consequently excluded. After this final item was left out all items had an individual KMO value of >0,5.
Secondly the overall Kaiser-Meyer-Olkin value was used to verify the measure of sampling adequacy, KMO = 0.769. According to Hutcheson & Sofroniou (1999) this value can is good as it lies between 0,7 and 0,8.Finally Bartlett’s test of sphericity tested the correlation between items, and was significant (χ2
(91) = 467,618, p < .05). The principal component analysis indicated that here were four factors with an Eigenvalue larger than 1. They explained 21,6, 21,3, 16,5 and 13,6 percent of the variance, totaling 73 percent. The factor labels were chosen by examining the original questions to find an expression that described all items in de factor.
A summary of the results can be found in Table 2. Very low factor loadings have been suppressed and are not taken into consideration. The minimum absolute value has been set to 0,4 as recommended by Stevenson (2002). Three more items were excluded in this phase because they had a cross-loading of 0,4 or larger. Those were the items “This organization has the reputation for making products with their own identity”, “This organization has the reputation for making exclusive products ‘and “This organization has the reputation for making high quality products”.
In short, the principal components analysis indicated that there were four distinct factors underlying the questions about Organizational Reputation. These are Creative Reputation, Luxury Reputation, Sustainable Reputation and Functional Reputation. In total six out seventeen items were eliminated.
Table 2: Summary of principal components analysis results for 14 items from the Organizational Reputation questionnaire
(N = 64) Creative Reputation Luxury Reputation Sustainable Reputation Functional Reputation This organization has the reputation for
making eccentric products
,825
This organization has the reputation for making creative products
.782
This organization has the reputation for making innovative products
,694
This organization has the reputation for making products with their own identity
, 644 ,487
This organization has the reputation for making expensive products
,842
This organization has the reputation for making affordable products
-7,60
This organization has the reputation that their products are status symbols
,784
This organization has the reputation for making exclusive products
,595 ,682
This organization has the reputation for making high quality products
,413 ,544 ,466
it uses ecological materials
This organization has the reputation that their production process is sustainable
0,857
This organization has the reputation that it improves the respect for human rights on plantations and in factories
,682
This organization has the reputation for making comfortable or user friendly products
,810
This organization has the reputation for making functional products
,805
Eigenvalues 3,024 2,975 2,314 1,902
% of variance 21,60 21,25 16,53 13,59
Note. Factor loadings < 0,4 are suppressed.
The next step was testing the reliability of the scales that were created. In table 2 the Cronbach’s Alpha and some descriptive statistics of the new variables are presented. Field (2009, p.675) states that a value of 0,7 can be accepted as reliable. Al scales have an alpha of >0,7 with the exception of the scale ‘functional reputation’.
(N=64) No. of items
M (SD) Skewness Kurtosis Cronbach’s Alpha (α) Creative Reputation 3 3,245 (,976) -,132 -,640 ,772 Luxury Reputation 3 3,292 (,946) -,399 -2,30 ,741 Sustainable Reputation 3 2,974 (,899) -,280 -,147 ,828 Functional Reputation 2 3,734 (,756) -,792 1,716 .681
In this study the new variable creative reputation will used to test the hypotheses presented in the conceptual framework. This variable has been created from questions from the survey, namely “This organization has the reputation for making eccentric products”, “This organization has the reputation for making creative products” and “This organization has the reputation for making innovative products”.
5. 3 Multiple linear regression analysis
After the variable “organizational reputation” was created, multiple linear regression analysis was used to test the hypothesis presented in the conceptual framework. The variables ‘Creative Function’ and ‘Job Popularity’ were transformed into dichotomous dummy variables. All other variables were centered around the overall mean of that variable. The b-value, the standard error of the b-value and the Beta of the tests
predicting Creative Performance can be found in table 3, along with the significance. Table 4 presents the same values for the test predicting Job Popularity and table 5 for predicting salary.
Table 3: Multiple linear regression predicting Creative Performance
(N=64) B SE B β Sig. Constant 8,942E-005 ,124 ,999 Creative reputation ,249 ,128 ,240 ,056 Constant ,048 .144 ,738 Creative reputation ,360 ,158 ,346 ,026 Creative function -,053 ,317 -,022 ,869 Creative reputation* Creative function -,329 ,297 -,175 ,271 Constant -,031 ,128 ,807 Salary -,064 ,061 -,136 ,296 Constant ,021 ,118 ,856 Creative reputation ,124 ,124 ,122 ,324 Salary -,060 -,057 -,127 ,294 Creative reputation* Salary ,136 ,040 ,406 ,001
Table 4: Regression analysis predicting Job Popularity
(N=64) B SE B β Sig.
Constant 0,734 ,055 ,000
Creative reputation 0,080 ,057 ,176 ,163
Table 5: Regression analysis predicting Salary
(N=64) B SE B β Sig.
Constant 2,857 ,269 ,000
Creative reputation -,418 ,275 -,194 ,134
Hypothesis 1 proposed that employees of companies with a stronger creative reputation would display more creative performance than employees of a company with a weaker creative reputation. However, this link was insignificant (β =2,40 p> 0,5) and therefore the hypothesis was not supported. Hypothesis 2 was also not supported as no evidence was found that the effect of creative reputation on creative performance is stronger for employees in creative functions than for employees in non-creative functions (β =-1,75
p> 0,5).
Hypothesis 3 suggested that companies with a stronger creative reputation would be more popular with job seekers than companies with a weaker creative reputation. Yet the results did not support this proposal (β =-1,76 p> 0,5).
Furthermore the results do not support hypothesis 4 which proposed that employees that receive a higher salary would display more creative productivity than
employees in that receive lower salaries (β =-1,36 p> 0,5). Hypothesis 5 did also not receive support as no effect was found from either creative reputation on performance (β =2,40 p> 0,5) or from salary on creative performance(β =-1,36 p> 0,5).. Consequently a higher salary has no impact on creative reputation on creative performance. Finally, hypothesis 6 suggested that employees of companies with a stronger creative reputation would receive a lower salary than employees of companies with a weaker creative reputation. This hypothesis was also not supported (β =-,194, p> 0,5).
6 Discussion & Conclusion
This study aimed to increase the understanding of the effects of organizational reputation on employees and potential employees that are currently job seekers in creative
industries. Up till know barely any research had been done on the effects of organization reputation on creative performance and only a few studies focused on the effects on job seekers. In the conceptual framework a number of hypotheses were presented based on results of previous literature. Unfortunately no support was obtained for them. There was no evidence that a company’s creative reputation influences creative performance of employees. Consequently it could also not be said that having a creative function makes this effect stronger. Companies with a strong creative reputation were also not found to be more popular with job seekers. This strongly contrast with existing literature that proposes that a company with a strong reputation with attract more job seekers than a company with a weaker reputation (Cable and Turban,2003; Collins and Han, 2004; Turban and Cable,2003).
Furthermore no support was found employees with a higher salary display more creative productivity and that this effect was moderated by being in a creative function or not. This also conflicts with previous research as most studies concerning salary agree that salary is a strong incentive (Judge, Piccolo, Podsakoff, Shaw & Rich, 2010; Kuvaas (2006; Locke et al., 1980). Finally negative effect of creative reputation on employee salary was not significant (β =-,194, p> 0,5).
Even though these results are unexpected there are several explanations as to why limited evidence was found for the hypotheses. It is most likely caused by some
resulting in a small sample. This is likely the main cause of most results not being significant. In addition, to determine the popularity of a function in the organization respondents were asked about their perception on this topic in the survey. However the accuracy of this measure is questionable, as people in a certain function often do not have access to information about the number of people applying at the organization.
Consequently, in the survey one fifth of the participants answered that they did not know if their function was popular with job seekers. Furthermore salary was not measured very accurately. Each answered that could be given represented a range of at least 700 euros.
This study does however provide an valuable extension in the literature concerning organizational reputation. Despite there being no significant evidence that creative reputation influences creative performance, it was close to being valid (p= 0,56). The relatively high beta also suggest that there is probably a link between creative
reputation and creative performance (β =2,40). However, further research is needed to confirm the probability of this. Furthermore, even though no support was found that salary moderates the effect of creative reputation on creative performance, the interaction effect of salary and creative reputation was significant (β =,406, p< 0,5). This suggest that an employee at a company with an higher creative reputation who earns a higher salary displays more creative performance than an employee in either a company with a weaker creative reputation or an employee that ears a lower salary. In other words, just having a good creative reputation or a good salary might not be enough to have
productive creative employees, to influence the level of create performance a company needs both.
Concluding, the results of this study suggest that there is a positive link between creative reputation and creative performance, although no significant evidence was found. In addition, evidence has been found that both a high salary and a strong creative reputation are requirements for high creative performance.
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