Creating Public Value Through Reputation Management

Asmara Irfan; Abdul Sami

doi:10.31384/jisrmsse/2021.19.2.8

Creating Public Value Through Reputation Management

1 Department of Management, University Teknologi Malaysia, Malaysia

2 Assistant Professor at University of Jhang, Pakistan

Abstract

The central idea of this research is to find out how reputation management creates public value. The value system of an institution is very much important for its reputation. Reputation is associated with an institution’s ability to assure its employee’s requirements. An institution’s reputation explains its members’ opinion about its institution’s proficiency to create values comparative to its opponents. Universities do not give attention to managing their reputation in the long run. Public value can be considered a new thought for public sector organisations to manage their reputation. The public value of universities includes those ethics of an organisation that offer quality services to its students. To remain in the competition, universities have to handle their reputation by fulfilling their students’ demands. Reputation management is much argued in the business sector, and public value is discussed in different public organisations. Few researchers have discussed the relationship between reputation management and public value in the education sector. This study uses proportional random sampling. The sample for this study includes five public universities in Pakistan. To evaluate the collected data Partial Least Squares Structural Equation Modeling was used. The findings of this study confirm that there is a positive relationship between university reputation and public value.

Keywords

university reputation management, public value, public universities

INTRODUCTION

The base of Public Value is built on the influential work of Professor Mark Moore’s book “Creating Public Value” in 1995; in which Professor Moore specified the basic objective of a public manager. According to Moore important duty of a public manager is to maintain public value by fulfilling the requirements of public. Policy makers and public managers all over the world show great interest in the thought of public value. According to the previous literature many researchers found that public value is an important construct for public administration (Sami, Jusoh, Mahfar, Qureshi, & Khan, 2016).

Public value concept is attracting both developed and developing countries. Public value has the ability to assess the credibility of public services according to the demand of its citizens. In general, Public value is used to manipulate government activities that help to make principles for its citizens (Alford & O’Flynn, 2009; Kelly, Mulgan, & Muers, 2002). To make policy decisions about citizen’s well being, public value is widely used (Kelly et al., 2002). Public value policy helps government to make good relationships with its citizens by providing quality services to its citizens (Kelly et al., 2002; O’Flynn, 2007).

Shaw (2013) highlighting the friendly environment of organisation that help to build moral values for their employees. Furthermore, public value concept of Moore explains that cooperative partnerships among public administrators and different cluster of people in society will create public value.Spano (2009) discusses that management control system of an organisation is very much important in making public value in an organisation; management control system includes organisational culture, organisational structure and core control system.

On the other side, reputation explains the performance of an organisation. Similarly, reputation helps to distinguish universities from their competitors reduces information asymmetry and students uncertainty (Shamsie, 2003). As such, reputation is the key to know the performance and ranking of universities; it is reputation of universities by which anyone can understand why some universities performs well than others (Hitt, Boyd, & Li, 2004). A new vision of creating values through reputation is given by (Rindova, Williamson, Petkova, & Sever, 2005) in their study they proposed the scope of reputation. According to them there are two proportions of reputation one is perceived quality and second is market fame. Reputation as perceived quality shows the quality of inputs and productive assets that is this dimension of reputation is embedded with economic orientation. Reputation as market prominence includes media, expert mediators and association with high status people; this type of reputation is embedded with sociological tradition. Moreover, in this study authors argue that some stakeholders attach reputation of an organisation with the quality of goods and services provided by the organisation while some stakeholders view organisations reputation as its external prominence in the market.

In higher education, universities can improve its management by giving importance to its value system. Values of an institution can be improve or better if the institution knows how to give importance to its people and knowledge.Drucker (1974) gives an idea to improve management of organisation. According to him if organisations sacrifices short term benefits and only focus on long term benefits it will help in continuous improvement in human resource development and will create values for the organisation which will be benefited for the public. Public universities can contribute to the society through their public values. Public values of a public university must be in a position to serve its stakeholders and have common good for the society. This study investigates the public value management of five public universities of Pakistan and their contribution to the society.

The recent development of public value and reputation management is important for public sector universities as student’s wants quality services because they are paying higher fees. In this study researchers have explore that whether reputation management in public universities of Pakistan creates public value. According to (Rindova et al., 2005) “reputation is stakeholders’ perceptions about an organisation’s abilities to create value relative to competitors” conceptualising reputation and linking it to performance” (Bergh, Ketchenjr, Boyd, & Bergh, 2010). Universities are not focusing on providing the services to students rather they are much interested to increase their ranking and reputation on the bases of publication and marketing. The main objective of this paper is to create public value in public universities of Pakistan by providing best services to its students by managing their reputation.

LITERATURE REVIEW

Public value

Public value was first expressed by Mark Moore in his influential book “Creating Public Value - Strategic Management in Government” as a new approach to think about the public management of an organisation. According to (Moore, 1995), public value can help public managers to satisfy public demands both collectively and individually (Omar, 2015). The idea put forward that public value formation should be the foremost purpose of public managers (Knoll, 2012).

Moore (1995) offers a representation of public value stands on the responsibility of the public administrator. This model is built on three interdependent and necessary processes (See Figure 1). First, the public value must be defined clearly to specify the impact of public expectations. Second, legitimacy and support for strategic action is required to create public value which is based on the creation of an established agenda that permits the action, the building and preservation of a union of helpful stakeholders. Third, these plans should be attainable. An outfitted ability shows that these strategies must be familiar to manage the working assets like funds, human assets, talent and equipments. These three strategies are combined in a triangle.

The second theoretical concept is the public value frame work developed byKelly et al. (2002) which indicate main parts of public value. Figure 2 demonstrates these three main parts of public value which includes the provision of quality public services, socially desirable outcome and trust of people in government. These three parts of public value provide the foundation to draw the dimensions of public value for this study. These building blocks help the public managers and government to think about new ways to provide quality services to their citizens. There are different factors included in the provision of quality services like availability of services, satisfaction levels with services, importance of services offered, equality in service provision, and cost (Kelly et al., 2002). Not only the provision of quality services is important but also the outcome from these services is important as these outcomes will establish a trust on government by the public.

https://typeset-prod-media-server.s3.amazonaws.com/article_uploads/5059ca9c-578e-4b8a-b6ba-5e42c4c06698/image/ae18ae26-39a0-45fe-a523-2e5fa7003fd7-upicture1.png — **Figure 1: Strategic triangle**

https://typeset-prod-media-server.s3.amazonaws.com/article_uploads/5059ca9c-578e-4b8a-b6ba-5e42c4c06698/image/6eb3b0e8-c5f6-4e1d-a274-9faeec2b299f-upicture2.png — **Figure 2: Public Value Framework**

According toKelly et al. (2002) public value concept was used in different public sector areas to bring change and improvement such as criminal and justice, learning and skills, higher education and health (Sami, Jusoh, & Qureshi, 2016). The main purpose of public value is to conduct the functions of public organisations; main purpose of public organisation is to create value for citizen by providing them quality public services (Moore, 1995; Try & Radnor, 2007). It is the utmost duty of al the public and private organisations to create some value for their stakeholders. Although, the main aim of private sector is to generate profit by creating private value for its stakeholders. Contribution of public organisations is more in creating public value. Public organisation creates public value for the well being of society and nation (Sami, Jusoh, Nor, Irfan, & Qureshi, 2018).

Reputation management

Like commercial markets which wants to boost up their business in the competitive market, focused on the needs and satisfaction of customers, educational institutions also to remain in the global market must give importance to the needs and satisfaction of its stakeholders (Hamzah & Shamsudin, 2020; Khan & Yildiz, 2020; Shekarchizadeh, Rasli, & Hon-Tat, 2011). Educational institutions must have the knowledge of the needs of its students as interest of students is directly related to the success of an institution. Some researchers are also of the view that the success and failure of an institution is associated with the ability to manage and achieve student satisfaction (Tetřevová & Sabolová, 2010). The concept of reputation is somehow related to the concept of image. Reputation is the valuable judgments passed by public about an organisation‘s reliability, honesty and trustworthiness formed over a long period of time (Bennett & Rentschler, 2003).

Reputation management is an impressive thought for professionals (Wæraas & Dahle, 2020). Reputation is based on collective or public ideas which they share after their experiences with the services of the organization (Etter, Ravasi, & Colleoni, 2019). Reputation is greatly affected by the outside views than that of internal views (Men & Yue, 2019). Reputation can be describe as an intangible feature. It means we cannot touch it but it has some value for the organization. Word of mouth, print media, social media, public gatherings were some of the tools that are used for giving comments about any organization service but also these tools are used by organizations to manage their reputation (He, Zha, & Li, 2013; Veil, Buehner, & Palenchar, 2011)

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In previous literature reputation is much discussed in business environment not much discussed in education sector. In higher education institution reputation also plays an important role as strong academic reputation is one of the factors in attracting more and more student (Kong & Farrell, 2010). Education institutions charge university fee as a premium as they are providing super quality services to their students (Angell, Heffernan, & Megicks, 2008).Mazzarol (1998) discussed that for some higher education institutions reputation is very much important than the actual service quality. Students select their university on the bases of its reputation (Yang, Alessandri, & Kinsey, 2008). Consequently, it can be concluded that the reputation of a university is an effective source of information on how the university succeeds in meeting the needs and expectations of students (Temple, 2006).

Previous research argued that organisation tangible and intangible assets along with organisation resources will improve the organisation financial performance (Neville, Bell, & Mengüc, 2005; Vig, Dumičić, & Klopotan, 2017). (Betül, 2015)claimed that student’s perception about institution reputation have an impact on institution financial performance. The other aspects that impact financial performance and reputation of organisation include emotional demand, product and services, vision and leadership, workplace environment and social and environmental responsibility. Diagrammatic representation of Fombrun’s reputation attributes is given in Figure 3.

It is a social responsibility of a university to create jobs for people and to solve the problems of society; this will help to boost up the reputation of a university. Past literature shows that different researchers have discussed different dimensions of corporate reputation. The findings of the study done by (Verčič, Verčič, & Žnidar, 2016) showed that reputation is unidimensional while findings of (Shamma, 2012) and (Fombrun & Riel, 1990)proved that reputation as a multi-faceted construct. However, each institution explain different dimensions of reputation according to the nature of business and the different expectations of their constituent (Jie & Hasan, 2018). Major studies on reputation management is mainly done in the field of branding, image building and self-presentation in the private sector but now many public organisations like universities also shows interest in the reputation management of their institutions (Carpenter & Krause, 2012).

Public value creation through organisations reputation management

https://typeset-prod-media-server.s3.amazonaws.com/article_uploads/5059ca9c-578e-4b8a-b6ba-5e42c4c06698/image/8125e7a9-3a09-448b-8514-7cc361b96142-upicture5.png — **Figure 4: Reputation and Public Value Framework**

The general objective of this paper is to investigate whether reputation management in public universities of Pakistan creates Public Value. To examine the public university reputation, it must be in mind that the picture of public sector services is far wider than private sector services. Expectations from the public university is not only be affected by the direct services provided by the university but also by the trust and policies of Government on education sector. In private sector, value can be judged by individual customers or students while in public sector, values can be assessed by the citizens or students, tax payer or fee payer; in fact overall community is involved which defines societal outcome. While, reputation of a university can be assessed by its performance. Reputation of a university is intertwined by its value system. A public university policy can be termed as public value of that university. Therefore, reputation of a public university can be assessed by the public value it creates. Reputation of a public university is said to be an instrumental value; a means to reach the desired destination and the benefits associated with it as its societal outcome.

Although, literature on reputation is focused mainly in the private sector (Silva & Batista, 2007). Studies on reputation in Higher education have been undertaken in relation to university business schools, their ranking, university mergers and their branding (Vidaver-Cohen, 2007). However, in public administration the literature on reputation is very limited. From the determinants of reputation given by (Riel & Fombrun, 2003) and public value framework by Kelly et al. (2002), this study uses its own framework Figure 4.

If a university is successful in providing quality services and products to its stakeholders; university has a strong vision and leadership quality; university is familiar with the wants and needs of the students and have long term financial vision and investment and at the end overall socially responsible and provides healthy work environment to its stakeholders than university is capable enough to create public value through its reputation. By public value of a university means university is providing high quality services, it is trustable and honest and overall work and benefiting the society.

METHODOLOGY

Sample and measures

A arbitrary sample of 500 students from five public universities of Pakistan was taken. 320 dully filled questionnaires were received from the students of five public sector Pakistani universities. Public value was measured by three dimensions adapted from (Sami, Jusoh, Nor, Irfan, & Liaquat, 2018). The objective of this scale is to measure the public value of the universities. University Reputation was measured by the measurement scale of university reputation provided by (Fombrun, Charles, & Naomi, 2000). These instruments will measure the way students actually conceptualise their university. Sample item of this scale includes “international postgraduate students at five research universities”.

Five points Likert scale was used to get the responses. Point 1 shows strongly disagree, point 2 as disagree, point 3 as neutral, point 4 as agree and point 5 as strongly agree.

Table 1: Demographic features of Respondants

Demographic	Frequency	Percentage
Gender
Male	200	62
Female	120	38
Total	320	100
Marital Status
Undergraduate	201	63
Post Graduate	119	37
Total	320	100
Source of fund
Scholarship	111	35
Self-Sponsored	209	65
Total	320	100

Demographic part contains information about respondent age, gender, qualification and experience and given in. Table 1 shows that the 200 of the respondents were male and rest 120 of the respondents were female that is 62% and 38% respectively. 63% respondent’s belongs to undergraduate studies and 119 were from postgraduate studies. 65% respondents were self sponsored and 35% were on scholarship.

Measures of the study

The current study uses two main constructs. The selection of the measurement scale for each construct in this research was based on examining their previous reliability, which is Cornbach alpha equal to 0.70 or above. A total of 26 items scale was used to measure the variables of this study. The details of all the related constructs are given in Table 2.

Table 2: Number of Scale items for each constructs

Construct	Items	Reference
Reputation Management	11	(Fombrun, Gardberg, & Sever, 2000)
Public Value (Services, Trust, Societal Outcome)	15	(Sami et al., 2018)

Measurement Scale for Reputation Management

In this study researcher provides the measurement scale for university reputation provided by (Fombrun et al., 2000). These instruments will measure the way students actually conceptualise their university.

Table 3: Scale adapted for measuring Reputation Management

S.No	Items
1	My university has the ability to attract, develop and retain top talent.
2	My university has the ability to cope with the changing environment.
3	My university looks like a university with strong prospects for future growth.
4	My university has an excellent leadership.
5	My university offers high quality products/services that are good value for money.
6	My university contributes to the local economy.
7	My university has long term financial vision.
8	My university maximising student’s satisfaction and loyalty.
9	My university is respected and admirable.
10	My university has the capability to serve and work for society, environment and community.
11	My university takes advantage of market opportunities.

Measurement Scale for Public Value

Public value scale adapted from (Sami et al., 2018) aiming at finding public value in public universities of Pakistan.

Table 4: Scale adapted for measuring Public Value

Sr.No.	Items
Services
1	My University focus on satisfying Students needs
2	My University believes in students democracy
3	My University establishes good relations with Students
4	My University believes in providing high quality services to students
5	My university allows to work independently to meet professional standard
Trust
1	My university follows Judicial values/ Due process
2	My university always remains loyal to rules
3	My university make network to achieve organisational goal
4	My university remains accountable towards society.
5	My university always stays within allocated budget
Societal Outcome
1	My university provides quality services in less time and cost.
2	My university leads to better technological efficiency.
3	My university focuses on value than cost.
4	My university provides job opportunities to unemployed people.
5	My university has ability to draw long term goals

Measurement model validation

This study applied SEM to statistically analyse the results along with PLS algorithm approach was utilised after setting up the pointer of the measurement. The PLS analysis uses both the measurement model and the structural model and according to (Hair, Ringle, & Sarstedt, 2013), PLS is one of the best statistical tools for SEM. To check the reliability and validity of the constructs and to ensure proper loadings of the indicators to their respective construsts, this study uses Convergent and discriminant validity. After that structural model was used to verify the hypothesised connection of the variables understudy.

https://typeset-prod-media-server.s3.amazonaws.com/article_uploads/5059ca9c-578e-4b8a-b6ba-5e42c4c06698/image/f7705f28-39ba-4673-ae02-0e08488475c1-ufig-5.png — **Figure 5: Measurement Model**

Convergent validity verify the association among the measures of the same construct (Hair et al., 2013; Rasli, 2006). We can check convergent validity through construct loadings, Average Variance Extracted (AVE) and constructs reliabilities. Important thing to note while analysing convergent validity is to study whether all the items are considerably loaded on a construct.

Table 5: Average Variance Extraction of all constructs

Constructs	Final AVE
Constructs	Final AVE
Reputation Management	0.529
Services	0.573
Societal Outcome	0.529
Trust	0.596

Table 5 displays that the average variance extraction of the reputation management which was 0.529, services was reported 0.573, societal outcome was 0.529 and trust was reported 0. 596.

The point value of the Composite reliability is 0.70 or above (Cooper, Schindler, & Sun, 2006; Rasli, 2006). Table 6 displays all those concepts that have the satisfactory reliability of all constructs.

Table 6: Reliability of all Constructs

Constructs	Cronbach's Alpha	Composite Reliability
Reputation Management	0.884	0..908
Services	0.764	0.842
Societal outcome	0.759	0.768
Trust	0.833	0.879

The composite reliability value for reputation management was reported 0.908, services was reported 0.842, societal outcome was 0.768 and trust was reported 0.879. Cronbach’s Alpha value for reputation management was reported 0.884, services was reported 0.764, societal outcome was 0.759 and trust was reported 0.833.

Structural equation model

In this study, structural equation model is used for testing the research hypotheses. PLS gives the opportunity to analyse the path model, especially in the research that is more exploratory. Furthermore, PLS is the most suitable technique for a model that involves hierarchical constructs as it reduces the complexity of the model and aid the process of making a conclusion and generalisation. Another reason to use PLS is to cater to the small sample generated from the survey because PLS has the ability to handle smaller sample size. This research studies relationship among variables and is exploratory and for causal relationship PLS is used (Hair et al., 2013) and the results of the hypothesis are comprehensively shown according to the path coefficients, p-value, and t-values, using significance level of 0.05. In this study three hypothesis were proposed; hypothesis 1 states the positive correlation between reputation management and services, hypothesis 2 states the positive correlation between reputation management and societal outcome and hypothesis 3 states the positive correlation between reputation management and trust.

Findings of this study show that Path coefficient of the Reputation management → Services was 0.349 with R² value 12.2%, t value greater than 1.96 and P < 0.05; this proves the positive correlation between reputation management and services.

Similarly, path coefficient of the Reputation Management → Societal Outcome was 0.458 with R² value 21.0% , t value greater than 1.96 and P < 0.05 also proves the positive correlation between Reputation Management and Societal Outcome.

Furthermore, path coefficient of Reputation Management → Trust was 0.275 with R² value 7.6%, t value greater than 1.96 and P < 0.05 confirms the positive correlation between Reputation Management with Trust. Table 7 shows the results of hypothesis in tabular form.

Table 7: Hypothesis Results

Construct	Path Coefficient	T Value
Reputation Management -> Services	0.349	8.396
Reputation Management -> Societal Outcome	0.458	9.120
Reputation Management -> Trust	0.275	5.393

DISCUSSION AND CONCLUSION

For a good organisation reputation, reputation management is very important (Hillenbrand, Carola, & Money, 2007; Nakra, 2001). Reputation management is a professional policy to make organisation successful, flourish and keep it sustained for long time (Deephouse & Carter, 2005) and the length of its sustainability depends upon the relationship between public and organisation. However, reputational management has been proven to be a process of controlling and directing the minds and emotional responses of people (Deephouse & Carter, 2005).

Furthermore, higher education institutions need to manage communication programs and processes effectively so as to make sure that they correspond to the appropriate stakeholders in the most efficient way (Botha, Sanders, & Viljoen, 2009). In previous literature, scholars examined reputation in business setting; they did not use different theories of corporate reputation in educational settings. Most of the studies on reputation in HEIs show that quality of services by institutions, satisfaction of student, expectations of student and loyalty of student are crucial for market competitiveness and constructive student observation (Vidaver-Cohen, 2007). Past studies have found different observation of consumers on business reputation management of HEIs. (Sami et al., 2016; Šontaitė-Petkevičienė, 2015). Good reputation management helps to draw attention and keep students in their hands (Standifird, 2005), which is important to remain in competition within which higher education institutions operate. The strength of a higher education brand can drive a well-built sign regarding the worth along with reliability of an educational establishment. In this way, educational institutions should take care of their reputation by monitoring factors such as performance and the behaviour of academic and non-academic staff and perceptions of external stakeholders in order to optimise the quality of the brand and enhance its appeal.

This is an exploratory study as we have examined the elements of the reputation and Public Value, data has collected from five Pakistani Public universities. The result of this study shows a positive correlation between reputation management and dimensions of Public Value in HEIs context includes societal outcome, trust, and services. To upgrade reputation of HEIs; administrators of HEIs must focus on public.

LIMITATIONS AND IMPLICATIONS

The limitation of this research is that the demographic features were not controlled. For future research use the controlled demographic features.Public value is believed to give managers with an idea of providing services to the common consumer. Currently, public value is no longer restricted to the public sector, but is used by all types of organisation, including non-governmental organisations and private sector firms. Public value ensures that students will receive quality services in a fair manner against their payments made to the universities. It also helps administration of organisations how to achieve trust of society by promoting honesty in their operations and policies. This research also helps administration of different institutions to maintain their reputation in the long run by achieving trust of their stakeholders and it can be achieved by creating public value in their institutions.

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