A Firm's Financial Reputation vs. Sustainability Reputation: Do Consumers Really Care?

In today's global marketplace, management teams spend a significant amount of effort on managing their organizations' image. Stellar reputations help to secure financing, attract business partners, and entice customers. Across two studies, we examine the extent to which a firm's financial and sustainability reputations are influenced by two distinct organizational activities: its status as a first mover in the field of sustainability and its chief executive officer's actions. We accomplish this by utilizing a basic semiotics framework to analyze the process by which a firm's reputation is created between the object (the firm), different signs (organizational activities), and an interpretant (the firm's reputation). Among other reported findings, we confirm that a firm's first mover status significantly impacts its financial reputation. In addition, the first mover status and the actions of its CEO both significantly impact the firm's sustainability reputation. In examining sustainability reputation more closely, we confirm a strong and significant effect of the firm's sustainability reputation on consumer attitudes toward the firm, which is mediated by the attitude toward the CEO and attitude toward the firm's first mover status. Do consumers care what organizations do? The answer is yes.