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Faith-holders 1 From Stakeholders to Faith-holders: Reputational Advantage of Frequent Contact and High Trust

From Stakeholders to Faith-holders: Reputational Advantage of Frequent Contact and High Trust Vilma Luoma-aho, Ph.D.

Spring 2006:

Summer 2006-

V. Luoma-aho, Visiting Research Scholar

V. Luoma-aho, Researcher

Annenberg School for Communication

SOCA-project,

University of Southern California

Ethnology, Villa Rana

3502 Watt Way (ASC227)

Po Box 35, 40014 University of Jyvaskyla

Los Angeles, California, 90089 USA

Finland, Europe

Phone 1 213 821 6662

Phone +358 14 260 1280 / +358 44 585 5064

Fax 1 213 740 8624

Fax +358 14 260 1231

[email protected]

[email protected]

Department

of

History

&

Faith-holders 2

Abstract This paper approaches the reputation of public organizations through a discussion of the stakeholder concept and presents findings of a stakeholder reputation survey on frequent stakeholders of 19 different Finnish public organizations. The findings compare the organizational target reputation with the measured stakeholder reputation and point to a rather good and neutral reputation. Based on the findings, a new concept of faith-holder is introduced. Faith-holders are understood to be those stakeholders with frequent contact and high trust, and they are especially beneficial to the organizational reputation and long-term development.

Note: This paper is written based on data and theory of the author’s 2005 doctoral dissertation entitled “Faith-holders as Social Capital of Finnish Public Organizations,” Department of Communication at University of Jyväskylä, Jyväskylä, Finland but has not previously been published in international journals.

Faith-holders 3 Introduction Stakeholder theory is often used as a frame for understanding the relationship between an organization and its environment. According to Donaldson & Preston, “The principal focus on interests … has been the proposition that corporations practicing stakeholder management will, other things being equal, be relatively successful in conventional performance terms” (1995, 67). Closely related stakeholder theories such as principal-agent perspective and agency theoryperspective share a common emphasis: efficiency (Clarkson 1995, 78). Freeman (1995, 39) suggests that there is not one well-developed stakeholder theory, but that stakeholder thinking can be seen as a type of human value-giving creative metaphor. The focus in stakeholder research is to define how the organization behaves in relation to its stakeholders, and what the stakeholders think of this behavior (Bromley, 1993; Fombrun, 1996). The stakeholders are believed to continually form assessments of the organization and these various assessments together are said to form an invisible entity of attitudes, the intangible operating environment for the organization. The assessments are formed individually in the eye of the beholder, regardless of whether the target actively attempts to influence them or not. How stakeholders perceive the organization will influence their behavior toward it for better or worse (Davies, Chun, da Silva & Roper, 2004). Though the stakeholder assessments cannot be manipulated toward desired outcomes, organizations can use public relations to make a considerable impact on stakeholder opinions (see Grunig et al., 1992; Bromley, 1993; Fombrun & van Riel, 2003; Pharoah, 2003). In order to survive (and be legitimate), the organization needs to influence its environment to be favorable for its operations. Yet in order for the organization to influence its environment, it must highlight and focus on actual deeds, for officials who make false claims about their organizations arouse

Faith-holders 4 distrust and indignation in stakeholders. This influencing is achieved via communication, and the desired outcome is often described as a relationship of two-way communication between the organization and its stakeholders. Maintaining a dialogue is especially important as stakeholders today have access to information and are empowered to act through various real time media. Issues, opinions and alternative points of view move quickly through public perception and the media. The speed at which the media pick up on current incidents is also a challenge for public organizations, for the increasingly mediated information that stakeholders now receive places a special emphasis on trust (Bentele, 2005). This ever-changing environment requires organizations to remain constantly aware of stakeholders. Public organizations in different parts of the world are facing similar challenges with funding and legitimacy (Cheung, 1996; Cinca, Molinero & Queiroz, 2003), but this problem may be addressed with Stakeholder theory, which gives a voice to those who were previously without. Public organizations make an interesting case in stakeholder research, as they are legally bound to serve everyone equally. The term ‘stakeholder’ emphasizes the importance of feedback and customer satisfaction. Moreover, public organizations are a rather new focus of stakeholder research, a field which traditionally places more focus on bureaucratic administration than management ideas. On one hand, stakeholder thinking itself can be understood to reflect neoliberal thinking that has been introduced to public organizations to solve the problems of legitimacy; on the other hand it represents the development toward increased openness and better service of public organizations. Yet despite the built-in assumption of equality in the stakeholder concept, some choices and preferences between different stakeholders have to be made even at public organizations.

Faith-holders 5 This paper first provides a detailed description of the concept of stakeholder and then examines case studies of various frequent stakeholders from nineteen different public organizations in Finland from 2001 to 2004. Finland’s extensive public welfare system, along with its very high GNP and high international competitiveness scores, make it an ideal case study. The stakeholders chosen for this study varied from the public organizations’ staff, customers, collaboration organizations and decision makers to those under the supervision of the public organizations in question. All stakeholders had frequent, ongoing contact with the public organizations, as the public organizations under study were mostly neutral, administrative-type organizations with little contact with the general public (such as the radiation authority or various governmental research centers, which are more difficult to prove ‘efficient’ since their products and services are not always known or understood).

On Stakeholders and Enabling Stakeholders are defined as those groups which aim to influence or are influenced by the organization, or groups without which the organization would cease to exist, according to the Stanford Research Group (1963). Stakeholder thinking differs from other theories in that “…it is intended to both explain and guide the structure and operation of the established corporation. Toward that end it views the corporation as an entity through which numerous and diverse participants accomplish multiple, and not always entirely congruent, purposes” (Donaldson & Preston 1995, 70). For an overview of what is meant by stakeholder thinking, four premises of stakeholder thinking are assumed in this paper (see Jones & Wicks 1999, 207): 1. An organization has relationships with many constituent groups, stakeholders. (Freeman 1984)

Faith-holders 6 2. The concern of stakeholder theory is with the nature of these relationships, as well as the outcome of the relationships for both the organization and the stakeholders. 3. The interests of all (legitimate) stakeholders have intrinsic value, and no set of interests is assumed to dominate over others. (Clarkson 1995, Donaldson & Preston 1995) 4. Stakeholder theory is focused on managerial decision-making (Donaldson & Preston 1995), and thus somewhat organization-centered. Stakeholders are often considered to need “management”, a term which implies that stakeholders may somehow be controlled. Traditionally management can also include the wielding of power and hierarchy. This emphasis on management does not suit public organizations, as they should involve and enable citizens instead of managing and controlling them (see Prime Minister’s Office, 2002; Denhart & Denhart, 2000). Thus, the theory of Stakeholder Enabling can be understood to be more appropriate to public organizations (Calton & Kurland, 1996). The notion of enabling thoroughly explains the quality of the relationship and the communications between an organization and its stakeholders. It also explains stakeholder thinking as a bridge between an organization and its stakeholders. “Enabling” also indicates acting together and sharing responsibility, thus removing the confrontational setting from the organization-stakeholder relationship. This interdependency involves shared information, a similar understanding of the concepts applied and ongoing dialogue as customary features of the organization. Ongoing dialogue is one of the main emphases of “Stakeholder Enabling,” as it directs attention to the joint creation of meanings, the building of ethical regulations and trust formation. Stakeholder Enabling has the difficult goal of bringing all stakeholder groups into dialogue and creating a mutual understanding of the direction followed (Calton & Kurland, 1996, 154-170).

Faith-holders 7 As the organization is not always able to meet the needs of all stakeholders equally, various typologies have been derived to that suggest in which order stakeholders should be addressed and placed in importance. Stakeholders are often categorized into primary and secondary stakeholder-groups, which change over time. Primary stakeholders have formal contracts with the organization (Carroll, 1993), while secondary stakeholders are those who are not engaged in significant exchange or seen as essential to the organization’s survival (Clarkson, 1995). Other categorizations refer to importance, closeness or type of relation. Stakeholders can also be grouped into internal (permanent relation) or external coalitions (Näsi 1979). Pizzorno (2004) distinguishes between active and dormant circles of stakeholders: active circles generate opinion and reputation through discussion, whereas dormant circles do not affect reputation formation, whether for lack of knowledge, experience or discussion. The stakeholders can further be distinguished according to their different traits or environments: economic, technological, social and political (Carroll 1993). Savage, Campbell, Patman & Nunnelley (2000, 103) distinguish stakeholders according to past and present potential to cooperate with or threaten the organization. They differentiate between marginal stakeholders with a low level of cooperation or threat, and supportive and non-supportive stakeholders. The most important stakeholders, however, are the “mixed blessing” stakeholders. They have the power both to cooperate with and to threaten the organization. Reputation is formed differently depending on the directness of the situation itself and the amount of contact. Reputation formation also depends on the stakeholders, with different levels of legitimacy, power and urgency of claims (Mitchell et al., 1997). Those with frequent contact with the organization have more personal interactions, whereas those with less actual contact rely on other means for forming opinions (such as the media or other people). This paper introduces

Faith-holders 8 the concept of frequency to the field or stakeholder thinking by focusing on frequent stakeholders, or those with ongoing interaction or collaboration with the public organizations in question. These frequent stakeholders can be seen as a mixed blessing, as they have personal experiences that are valuable for reputation formation, although negative experiences may deteriorate the reputation. Moreover, with frequent interaction there is a chance to develop a relationship. The desired reputation (organizational target reputation) may differ from the outcome (perceived or stakeholder reputation). This gap is often filled with PR-actions such as profile building, information flow, listening and dialogue, marketing and environmental scanning. Managing reputation, however, is a twofold issue. On one hand, reputation should result from actions, hence a good reputation would result from good and just actions without any effort or communication. The argument is that the most credible reputation results from satisfied stakeholders sharing their experiences informally in various social networks (Sjovall & Talk, 2004). This approach is adopted by Finnish public organizations, but is seldom sufficient. Moreover, good deeds do not benefit the organization if they are not known. On the other hand, good reputation requires management, and since reputation is connected with what is said about an organization, it can be managed by monitoring mentions about the organization in conversations, in the media, or on the internet (Karvonen, 1999.) Stakeholder categorizations distinguish individuals based on those with the most relevance and influence. This is understandable, as organizational resources are limited. However, there are arguments against such divisions. The importance of stakeholder groups changes, for example, with the organizational life cycle (Jawahar & McLaughlin, 2001). The attention stakeholders require varies as their importance to the organization grows or diminishes

Faith-holders 9 over time. Secondary or dormant stakeholders can change their status and quickly become primary and active. Moreover, categorizing stakeholders can create an artificial and false sense of order and therefore all stakeholders hold a potential stake in the organization and should be considered primary (Fombrun & van Riel, 2003).

Stakeholder assessments When measuring stakeholder assessments, intangible concepts such as reputation and trust are beneficial. The premise in stakeholder research is that a good reputation and stakeholder trust add up to an organization’s intangible capital, which supports the functions of the organization and positively affects everything around it. For organizations created to serve the stakeholders, the stakeholder assessments either legitimate or de-legitimate them. In this paper, reputation is defined as a record of past deeds (Sztompka, 2000), or the sum of stories told about the organization among its stakeholders (Fombrun & Van Riel, 2003). There is a difference between a target reputation and stakeholder reputation, as the former is associated with what the organization wants to be, and the latter with how the stakeholders perceive it. Trust, on the other hand, is faith that the interaction will continue and is linked with future expected behavior of the organization (Seligman 1997, Rothstein 2003). As demonstrated in figure 1, reputation (along with stakeholder trust) is the collection of intangible assets that maintain the legitimacy and balance of the organization.

Faith-holders 10

Figure 1

To remain stable and efficient, despite the changes to its operational environment, a public organization balances its stakeholder trust and reputation. Potentially a good reputation and high trust can even become social capital for the organization.

Trust and reputation are formed in the minds of individual stakeholders, yet are often understood as collective attributes. They are both products of social interaction and both help organizations to create a positive operating environment and reduce transaction costs (Hosmer, 1995). Moreover, good reputation may produce trust, and vice versa (Pizzorno, 2004). “A good reputation is the result of trustworthy behavior, and trust in this sense... is the economically rational decision to do exactly what you have contracted to do or promised to do because otherwise you would suffer an eventual loss in reputation and hence, in contracting opportunities” (Hosmer, 1995, 386). Figure 2 links these concepts together over time and demonstrates the organizationstakeholder relationship and its development. As shown in Figure 2, trust becomes reputation as present turns into history. In turn, reputation creates trust. Where trust is an element of a relationship, reputation is the experience of the relationship. Reputation and trust are both formed within the relationship of continuous meetings and interaction between an organization and stakeholders. Moreover, reputation and trust spread via networks. As time goes by, trust turns into reputation little by little, yet reputation influences the decision to trust also.

Faith-holders 11

Figure 2

The continuum of stakeholder reputation and trust over time: trust turns into reputation as present turns into past.

Based on theoretical elaborations, some hypotheses were laid down for the empirical data. First, a well functioning public organization would equal to frequent stakeholders being satisfied with its functions and trusting it. Second, should the frequent stakeholders be satisfied and trust the organization,the target reputation would match the actual stakeholder reputation. And third, if the target reputation matches the actual stakeholder reputation, the organization is legitimate.

Measuring stakeholder reputation The main approach of the study was quantitative, with empirical data collected over a period of 4 years (2001-2004) consisting of four parts: 1) a pilot study to test the whole research process, 2) interviews and background research to determine the target reputation and create a stakeholder questionnaire, 3) a main study to determine the stakeholder reputation and 4) a post study to test the stakeholder reputation. Altogether, nineteen different Finnish neutral- and administrative type public organizations participated, and the focus on this paper is on the main study involving twelve organizations. This paper discusses the empirical data and results only briefly and generally, concentrating on the analysis of the quantitative data (mainly the semantic

Faith-holders 12 differential statements). The stakeholder questionnaire used in the main study is attached as Appendix 2. First, the target reputations of the public organizations were determined through in-depth thematic interviews of top management and PR-practitioners from the organizations, along with desk research carried out on previous studies and organizational publications. The target reputation turned out to be rather neutral: desk research and interviews showed that the target reputation would include high expertise and an aim toward being trustworthy and credible. The interviews noted some problems as well: slowness and bureaucratic culture were evident in the case organizations. The exact listings of the target reputation are included in Appendix 1. After the target reputation, the stakeholder reputation was measured and compared to the target reputation. The data collected through the main study stakeholder questionnaire (Appendix 2) were analyzed through factor analysis to reveal hidden groupings (factors) that make up reputation. The factors show the attributes around which reputation is formed in the respondent’s mind. The factor analysis yielded five reputational factors for public organizations that were named according to their contents: Authority, Trust, Service, Esteem and Efficiency. The exact factors and the results of the reliability testing are presented in Appendix 3. These factors describe stakeholder assessments of public organizations. Figure 3 shows the scores the factors received from the stakeholders on various parts of the study (pilot, main and post) on a scale of 1-5 where 1 was the negative end and 5 the positive end. The scores were all toward the positive.

Faith-holders 13

Figure 3.

A comparison of the reputational factors of the different parts of the study: the pilot study (1 public authority), the main study (12 different public organizations; research, authority, legislation and semicommercial) and the post study (factor analysis of 7 similar public authorities). Altogether the number of stakeholders involved in answering exceeded 2100.

The results of the stakeholder surveys were overall quite positive: no averages were left on the negative side of the scale. The results showed that the relationship between public organizations and frequent stakeholders was quite neutral, gathering around the zero point of three, with an exception of rather high trust. Furthermore, with almost all different stakeholder groups, trust received the highest ratings. This high trust may develop into good reputation over time. The frequent nature of the contacts between the measured stakeholders and the public organizations under study further emphasizes the importance of trust: personal experience with an organization is understood to be the most credible basis for assessment and the evaluation of reputation (Bromley, 1993). Moreover, personal experience has greater credibility than media reports or rumors. As the assessments of those in frequent contact with the public organization were mostly positive, there was an obvious advantage for the organization. It was likely that good experiences had ensured trust, and an ongoing trust was making way for a sustained reputation.

Faith-holders 14 The empirical data seemed to confirm the set theoretical hypotheses, since the target reputation and the stakeholder reputation were directly proportional to one another. According to the target reputation, the strongest parts seemed to be trust and expertise, but some problem areas around bureaucracy and slowness were reported. The stakeholder survey results supported the target reputation, as the frequent stakeholders gave higher values (best achievements) for trustworthiness and professionalism along with service. The statements concerning efficiency and bureaucracy, on the other hand, were noted as problematic in the target reputation data and also received lower values from the frequent stakeholders. Essentially, the overall satisfaction of the frequent stakeholders and the matching target and stakeholder reputations lead to a conclusion of organizational legitimacy.

From Stakeholders to Faith-holders The relationship between frequent stakeholders and public organizations seemed to be rather fact-based and neutral for the most part, yet high trust was apparent throughout the subjects. To thoroughly describe this type of relationship (which includes frequent contact and high trust) the Faith-holder concept was created. A “Faith-holder” is a stakeholders who trusts the organization and has frequent personal experiences and contact with the organization. Faithholders can be considered an advantage to the organization, as they are a source of organizational legitimacy. Moreover, they are a credible source of information when those without frequent contacts form opinions or impressions of the organization. In this paper, faith is understood as a very strong type of trust, even reliance. Though the levels of stakeholder trust measured in this study were not the highest possible (reaching about 4 on a scale of 1-5), the concept of faith can be applied because it remains overall the strongest and

Faith-holders 15 unanimous factor in the relationship between the public organizations and their frequent stakeholders. The term Faith-holder describes the role and character of the stakeholders’ relationship with the public organization. The term is applied from the point of view of the organization, since the frequent stakeholders form the basis of trust that the organization enjoys within its environment and among all stakeholders. Public organizations enjoy levels of trust high enough to be recognized as faith. Thus, Faith-holders are important stakeholders whose trust in the organization provides a foundation for organizational well-being. Moreover, with Faith-holders there is less strain in communication, as there is a presumption of trust and cooperation. Organizations practicing public relations and reputation management are in the process of turning stakeholders into Faith-holders, or increasing trust among those with frequent contact. Increased mediation of communication and overload of information underline the importance of reliable sources of information. Stakeholders with personal experiences play a key role, as recommendations become more valuable. Faith-holders are understood to have the greatest impact on legitimacy of public organizations in the 21st century.

Faith-holders 16 References

Bentele, G. (2005). Vertrauen und Glaubwürdichkeit. Begriffe, Ansätze, Forschungsübersicht und praktische Relevanz. In Bentele, G., Fröhlich, R. & Szyszka, P. (eds.) Handbuch Public Relations. Verlag für Sozialwissenschaften: Wiesbaden. Bromley, D. (2002). Comparing corporate reputations: Leaguetables, quotients, benchmarks, or case studies? Corporate Reputation Review, Vol. 5, No. 1, pp. 35-50. Bromley, D.B. (1993). Reputation, Image and Impression Management. Wiley: West Sussex. Calton, J.M. & Kurland, N.B. (1996). A theory of Stakeholder Enabling. Giving voice to an Emerging Postmodern Praxis of Organizational Discourse. In Boje, D.M., Gephart, Jr, R.P. & Thatchenkery, T.J. (eds.). Postmodern management and organizational theory. Sage: Thousand Lakes. Carroll A. B. (1993). Business and Society. Ethics and Stakeholder Management. 2nd Edition. South-Western Publishing: Cincinnati. Cheung, A. (1996). Public sector reform and the re-legitimation of public bureaucratic power. The case of Hong Kong. International Journal of Public Sector Management. Vo. 9, No. 5/6, pp. 37-50. Cinca, C. S., Molinero, C. M. & Queiroz, A. B. (2003). The measurement of intangible assets in public sector using scaling techniques. Journal of Intellectual Capital. Vol. 4, No. 2, pp. 249-275. Clarkson, M.B.E. (1995). A Stakeholder Framework for Analyzing and Evaluating Corporate Social Performance. Academy of Management Review. Vol. 20, No. 1, pp. 92-117.

Faith-holders 17 Davies, G., Chun, R., da Silva, R. V. & Roper, S. (2004). A corporate Character Scale to Assess Employee and Customer Views of Organizational Reputation. Corporate Reputation Review. Vol 7, No. 2, pp. 125-146. Denhardt, R.B. & Denhardt, J.V. (2000). The New Public Service: Serving Rather than Steering. Public Administration Review. Vol. 60, No. 6, pp. 449-459. Donaldson, T. & Preston, L. (1995). The stakeholder theory of the corporation: Concepts, evidence, implications. Academy of Management Review. No. 20, pp. 65-91. Fombrun, C. & van Riel, C. (2003). Fame and Fortune: how successful companies build winning reputations. Prentice Hall: Upper Saddle River. Fombrun, C. J. (1996). Reputation. Realizing Value from the Corporate Image. Harvard Business School: Boston. Freeman, R.E. (1995). Stakeholder thinking: The State of the Art. In Näsi, J. (ed.). Understanding Stakeholder Thinking. LSR-julkaisut: Jyväskylä. Freeman, R.E. (1984). Strategic Management: A Stakeholder Approach. Pitman: Boston. Grunig L., Grunig J. & Ehling W. (1992). What Is an Effective Organization? In Grunig, J. Dozier, D., Ehling, W. Grunig, L., Repper, F & White, J. (eds.) Excellence in Public Relations and Communication Management. Lawrence Erlbaum Associates: Hillsdale NJ, pp. 65-90. Hosmer, L. T. (1995). Trust: The connecting link between organizational theory and philosophical ethics. Academy of Management Review. Vol. 20, No. 2, pp. 379-403. Jawahar, I. M. & McLaughlin, G. L. (2001). Toward a descriptive stakeholder theory: an organizational life cycle approach. Academy of Management Review. Vol. 26, No. 3, pp. 397-414.

Faith-holders 18 Jones, T. M. & Wicks, A. C. (1999). Convergent stakeholder theory. Academy of Management Review, No. 24, pp. 206-221. Karvonen, E. (1999). Maine kulttuurisena käsitteenä. A paper presented at the Communication Colloquium in January 8th -9th 1999, Helsinki. Mitchell R., Agle, B. & Wood D. (1997). Toward a Theory of Stakeholder Identification and Salience: Defining the Principle of Who and What Really Counts. Academy of Management Review. Vol. 22, No. 4, pp. 853 – 886. Näsi, J. (1995). What is Stakeholder Thinking? A snapshot of a social theory of the firm. In Näsi, J. (ed.). Understanding Stakeholder Thinking. LSR-julkaisut: Jyväskylä. Näsi, J. (1979). Yrityksen suunnittelun perusteet. Yrityksen taloustieteen ja yksityisoikeuden laitoksen Julkaisuja A 1:15. University of Tampere. Pajunen, K. (2004). Explaining by Mechanisms. A Study of Organizational Decline and Turnaround Processes. A Doctoral Thesis. Tampere University of Technology: Tampere. Pharoah, A. (2003). Corporate reputation: the boardroom challenge. Corporate Governance. Vol. 3, No. 4, pp. 46-51. Pizzorno, A. (2004). Resources of Social Capital: Reputation and Visibility. A presentation given at the ECSR Summer School on Social Capital, Trento Italy, August 22nd -27th, 2004. Prime Minister’s Office (2002). Recommendation by the Prime Minister’s Office on the Principles and Procedure of Central Government Communication. Communication in the Finnish State Administration – towards open, trustworthy and efficient administration. Prime Minister’s Office 2002/5. [online] [cited 30.5.2003].

Faith-holders 19 Savage, G., Campbell, K., Patman, T. & Nunnelley, L. (2000). Beyond Managed Costs. Current Trends and Future Issues. Health Care Management Review. Vol. 25, No. 1, pp. 93-108. Rothstein, B. (2003). Sociala fällor och tillitens problem. SNS Förlag: Stockholm. Savage, G., Campbell, K., Patman, T. & Nunnelley, L. (2000). Beyond Managed Costs. Current Trends and Future Issues. Health Care Management Review. Vol. 25, No. 1, pp. 93-108. Seligman, A.B. (1997). The Problem of Trust. Princeton University: New Jersey. Sjovall, A. & Talk, A. (2004). From Actions to Impressions: Cognitive Attribution Theory and the Formation of Corporate Reputation. Corporate Reputation Review. Vol. 7, No. 3, pp. 269-281. Sztompka, P. (2000). Trust. A Sociological Theory. Cambridge University Press: Port Chester, NJ.

Faith-holders 20 Appendix 1 Target reputation: a comparison of the attributes mentioned during the 12 informal interviews and the attributes found through the Background research. Any attributes mentioned in less than three interviews were omitted. For comparison, the table also includes the attributes used for the pilot study questionnaire. No

Attribute or characteristic mentioned Informal interviews: 1. Number of interviews in which mention was made of this attribute

Background research: 2. Number of organisations whose values, vision and mission included the attribute

1

Professional, expert Trustworthy Co-operative Bureaucratic, stiff, rigid Customer-oriented, willing to serve Impartial, neutral Open Efficient Progressive, leading For the common good Active, proactive, initiator Dynamic Flexible Internationally esteemed, respected Continuous development of actions Well-known Finds out the customer's needs Humane Involved in dialogue, interactive High quality research Productive, profitable, impressive Responsible, diligent Official On the pulse Esteemed Removed from real life Modern, forward-looking Motivated personnel Fast, rapid Keeps to planned schedules Independent, autonomous Honest Extrovert, outward-looking States clearly the right contact persons Overloaded with work

8

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35

12 10 10 9 8 8 7 7 6 6 5 5 5 5 5 5 5 4 4 4 4 4 4 3 3 3 3 3 3 3 3 3 3 3 3

6 6 0 5 6 5 4 1 5 0 0 1 0 3 0 0 2 1 1 3 2 0 0 2 0 1 3 0 0 0 2 0 0 1

Faith-holders 21 Appendix 2 The stakeholder reputation questionnaire of the main study.

Faith-holders 22

Faith-holders 23 Appendix 3 The reputational factors of the 12 main study organisations and their loadings on different factors. The highest value of each row indicates the factor the attribute belongs to. The attributes have been arranged in factor order for clarity. Rotated Factor Matrix

Factor 1 Factor 2 Authority Esteem

Factor 3 Trust

Factor 4 Service

Factor 5 Efficiency

non cooperative – cooperative

.441

.220

.362

.228

.214

not customer-oriented – customer-oriented

.500

.203

.160

.266

.155

closed – open

.537

.347

.207

.211

.120

static – dynamic

.468

.447

.144

.195

.307

bureaucratic – flexible

.657

.229

.130

.121

.261

distant – humane

.667

.243

.0972

.232

.144

dictatorial – engaged in conversation

.688

.185

.221

.079

.122

outdated – modern

.498

.432

.183

.201

.338

unable to listen – able to listen

.570

.127

.357

.193

.274

not under constant development – under constant development

.316

.504

.195

.234

.268

unknown – well-known

.211

.534

-.012

.260

-062

not esteemed – esteemed

.156

.621

.327

.245

.133

reactive – proactive

.339

.396

.232

.213

.292

not internationally esteemed – internationally esteemed

.164

.595

.231

.047

.086

insignificant research – significant research

.215

.506

.308

.083

.129

poorly motivated employees – motivated employees

.300

.400

.279

.222

.304

poor employer – good employer

.201

.486

.180

.149

.271

lags behind in its field – a trend-setter in its field

.320

.541

.311

.177

.290

partial – neutral

.153

.108

.643

.139

.088

for its own good – for the common good

.316

.104

.544

.117

.099

irresponsible – responsible

.120

.269

.619

.221

.167

unethical – ethical

.135

.229

.668

.115

.044

unfair – fair

.173

.049

.533

.503

.169

low expertise – high expertise

.117

.429

.516

.237

.187

untrustworthy – trustworthy

.111

.285

.613

.277

.236

passive – active

.325

.328

.062

.348

.123

does not find out customer needs – finds out customer needs

.379

.149

.113

.455

.130

states the contact persons unclearly – states the contact persons clearly

.334

.105

.053

.412

.132

poor quality – high quality

.115

.377

.313

.567

.160

inaccessible – accessible

.279

.133

.162

.533

.240

useless – useful

.085

.262

.349

.528

.048

does not meet expectations – meets expectations

.227

.298

.269

.595

.222

does not act according to clear principles – acts according to clear principles .130

.132

.332

.590

.240

inefficient – efficient

.283

.351

.211

.259

.467

poor leadership – good leadership

.272

.336

.307

.230

.389

slow – fast

.443

.205

.086

.229

.585

does not keep to schedule – keeps to schedule

.253

.147

.186

.218

.602

communicates its aims unclearly – communicates its aims clearly

.294

.299

.261

.279

.324

fractured – coherent

.281

.166

.178

.240

.367

Initial eigenvalue (altogether 56.84%)

40.48%

5.61%

Total eigenvalue

15.79

2.19

4.18% 1.63

3.69% 1.44

2.89% 1.13

CRONBACH’S ALPHA (RELIABILITY) 0,904 0,873 0,865 0,854 0,838 Extraction Method: Maximum Likelihood. Rotation Method: Varimax with Kaiser Normalization. a Rotation converged in 8 iterations.