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Internal Reputation Management: The Impact of Authentic Leadership and Transparent Communication

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Abstract

The aim of the study is to illuminate the internal reputation management process by examining the impact of authentic leadership and transparent organizational communication on employee evaluation of the organization. Drawing upon extant literature of public relations, marketing, business and management on corporate reputation, the study suggests that authentic organizational leadership and transparent organizational communication are effective drivers for a favorable reputation in the eyes of corporate insiders. Through a web survey of 400 employees randomly selected from a variety of large and medium corporations in the United States, the study demonstrated that authentic leadership plays a critical role in nurturing the organization’s transparent communication system, which, in turn, shapes the organization’s internal reputation. An organization’s day-to-day transparent communication practice characterized by information substantiality, accountability and employee participation largely contributes to employees’ positive evaluation of the organization. Significant theoretical and practical implications of the findings are discussed.

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Notes

  1. Small business companies with less than 250 employees were excluded from the population in the current study because small companies have different organization dynamics from medium and large corporations. Leadership and public relations practice are believed to be more salient in big and mature corporations.

  2. The sampling firm is a global provider of sampling solutions for survey research with headquarters in the United States and was the first commercial research sampling company.

  3. Companies that participants worked for covered a variety of industries including Education, Retail, Healthcare, Finance, Information Technology, Food, Industrial and Manufacturing, Transportation and Logistics, and so forth.

  4. Walumbwa et al. (2008) first operationalized authentic leadership in the Authentic Leadership Questionnaire (ALQ). Although research has demonstrated encouraging evidence of the reliability and validity of ALQ (Gardner et al., 2005; Walumbwa et al., 2008), one major concern is that the full ALQ is commercially copyrighted. Hence, this study adopted an equivalent measure, the ALI.

  5. According to Kline (2005), structural equation modeling (SEM) is a technique that can be applied to both non-experimental and experimental data to verify a priori models comprised of latent variables or a mix of latent and observable variables. Thus, in the present study, structural SEM was used as the primary statistical method to test the hypothesized model.

  6. According to Hu and Bentler (1999), a cutoff value close to 0.95 for CFI (ie, Comparative Fit Index), TLI (ie, Tucker-Lewis index); a cutoff value close to 0.08 for SRMR (ie, standardized root mean square residual); and a cutoff value close to 0.06 for RMSEA (ie, root mean square error of approximation) indicates good fit between the hypothesized model and the observed data. In addition, according to Hu and Bentler’s joint cutoff criteria, a SEM model with CFI, TLI⩾0.95 and SRMR<0.10 or RMSEA⩽0.06 and SRMR⩽0.10 can suggest that the fit between the data and the proposed model is reasonable.

  7. According to Kline (2005), a single fit index reflects only a particular aspect of model fit and a favorable value of that index does not by itself indicate good fit. There is no single ‘magic index’ that provides a gold standard for all models. The chi-square is the most commonly reported measure of model-data fit. However, it is strongly dependent on the sample size.

  8. Employee level of position showed no significant effect on the dependent variable – internal reputation, therefore, for model brevity, was not included in the SEM model testing.

  9. According to Kline (2005), bootstrapping is a procedure in which one takes repeated, smaller random samples of an existing sample to develop empirical estimates of standard errors of any parameter. Bootstrapping is a common procedure used to address multivariate non-normality issues.

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Authors and Affiliations

  1. Department of Communication Studies, Southern Methodist University, Dallas, TX, USA

    Linjuan Rita Men

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  1. Linjuan Rita Men
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Appendix

Appendix

Measures of Key Constructs

Authentic Leadership

  1. 1

    My manager describes accurately the way others view his/her abilities. (Self-awareness)

  2. 2

    My manager shows that he/she understands his/her strengths and weaknesses. (Self-awareness)

  3. 3

    My manager is clearly aware of the impact he/she has on others. (Self-awareness)

  4. 4

    My manager clearly states what he/she means. (Relational transparency)

  5. 5

    My manager openly shares information with others. (Relational transparency)

  6. 6

    My manager expresses his/her ideas and thoughts clearly to others. (Relational transparency)

  7. 7

    My manager shows consistency between his/her beliefs and actions. (Internalized moral perspective )

  8. 8

    My manager uses his/her core beliefs to make decisions. (Internalized moral perspective)

  9. 9

    My manager resists pressures on him/her to do things contrary to his/her beliefs. (Internalized moral perspective)

  10. 10

    My manager is guided in his/her actions by internal moral standards. (Internalized moral perspective)

  11. 11

    My manager asks for ideas that challenge his/her core beliefs. (Balanced processing)

  12. 12

    My manager carefully listens to alternative perspectives before reaching a conclusion. (Balanced processing)

  13. 13

    My manager objectively analyzes relevant data before making a decision. (Balanced processing)

  14. 14

    My manager encourages others to voice opposing points of view. (Balanced processing)

Transparent Communication

  1. 1

    The company asks for feedback from people like me about the quality of its information. (Participative)

  2. 2

    The company involves people like me to help identify the information I need. (Participative)

  3. 3

    The company provides detailed information to people like me. (Participative)

  4. 4

    The company makes it easy to find the information people like me need. (Participative)

  5. 5

    The company asks the opinions of people like me before making decisions. (Participative)

  6. 6

    The company takes the time with people like me to understand who we are and what we need. (Participative)

  7. 7

    The company provides information in a timely fashion to people like me. (Substantial)

  8. 8

    The company provides information that is relevant to people like me. (Substantial)

  9. 9

    The company provides information that can be compared to previous performance. (Substantial)

  10. 10

    The company provides information that is complete. (Substantial)

  11. 11

    The company provides information that is easy for people like me to understand. (Substantial)

  12. 12

    The company provides accurate information to people like me. (Substantial)

  13. 13

    The company provides information that is reliable. (Substantial)

  14. 14

    The company presents more than one side of controversial issues. (Accountable)

  15. 15

    The company is forthcoming with information that might be damaging to the organization. (Accountable)

  16. 16

    The company is open to criticism by people like me. (Accountable)

  17. 17

    The company freely admits when it has made mistakes. (Accountable)

  18. 18

    The company provides information that can be compared to industry standards. (Accountable)

Internal Reputation

  1. 1

    I have a good feeling about my company. (Emotional appeal)

  2. 2

    I admire and respect my company. (Emotional appeal)

  3. 3

    I trust my company. (Emotional appeal)

  4. 4

    My company stands behind its products and services. (Products and services)

  5. 5

    My company develops innovative products and services. (Products and services)

  6. 6

    My company offers high quality products and services. (Products and services)

  7. 7

    My company offers products and services that are a good value for the money. (Products and services)

  8. 8

    My company has excellent leadership. (Vision and leadership)

  9. 9

    My company has a clear vision for its future. (Vision and leadership)

  10. 10

    My company recognizes and takes advantage of market opportunities. (Vision and leadership)

  11. 11

    My company is well-managed. (Work environment)

  12. 12

    My company is a good company to work for. (Work environment)

  13. 13

    My company is a company that has good employees. (Work environment)

  14. 14

    My company supports good causes. (Social and environmental responsibility)

  15. 15

    My company is an environmentally responsible company. (Social and environmental responsibility)

  16. 16

    My company maintains high standards in the way it treats people. (Social and environmental responsibility)

  17. 17

    My company has a strong record of profitability. (Financial performance)

  18. 18

    There is low risk investing in my company. (Financial performance)

  19. 19

    My company tends to outperform its competitors. (Financial performance)

  20. 20

    I believe my company has strong future growth prospects. (Financial performance)

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Men, L. Internal Reputation Management: The Impact of Authentic Leadership and Transparent Communication. Corp Reputation Rev 17, 254–272 (2014). https://doi.org/10.1057/crr.2014.14

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