Corporate Image: Employee Reactions Christine M. Riordan and Implications for Managing Robert D.

Gatewood Jodi Barnes Bill Corporate Social Performance

ABSTRACT. Corporate image is a function of organizational signals which determine the perceptions of various stakeholders regarding the actions of an organization. Because of its relationship to the actions of an organization, image has been studied as an indicator of the social performance of the organization. Recent research has determined that social performance has direct effects on the behaviors and attitudes of the organizations employees. To better understand these effects, this study develops and empirically tests a model which links corporate leaders actions, employees perceptions of corporate image, and the employees level of association with the organization. The effects of managing the social environment of an organization on its employees perceptions of image, attitudes, and intended behaviors are discussed.

The importance of corporate image to the social performance of a firm has been examined in recent research. For example, Miles (1987) found that image (i.e. reputation) was used as one of several criteria for measuring the social performance of firms. Similarly, Fombrun and Shanley (1990) empirically determined that reputation
Christine M. Riordan is an Assistant Professor at the University of Georgia. Her research focuses primarily on corporate image, cross-cultural and labor force diversity and work group norms. Robert D. Gatewood holds a Ph.D. in IndustrialOrganizational Psychology. And is currently Chairman of the Department of Management at the University of Georgia. His research interests are in social issues, selection, corporate image, and total quality. Jodi Barnes Bill is a doctoral student in Human Resources Management. Her research interests include organizational climate, organizational commitment, diversity, and employment law.

was directly related to the extent of the firms social welfare activities. Finally, Dutton and Dukerich (1991) postulated that image served as a gauge against which employees evaluated and justified actions taken by the Port Authority of New York and New Jersey toward homeless individuals who used its facilities. This last study is of particular importance because it describes not only how corporate image reflects the social performance of the organization but also discusses how image affects the work activities of the organizations employees. In the present study, we characterize corporate image as an individuals perceptions about the actions, activities, and accomplishments of an organization. As noted by Thompson (1967), an organization does not present one image, but rather multiple images. Each of the various stakeholder groups relates differently to the organization and, thus, has a different perception of the organization (Freeman, 1984). The image of an organization is constantly being evaluated by a variety of assessors, . . . each inclined to employ a different kind of yardstick (Thompson, 1967, p. 88). Various stakeholders or organizational audiences, therefore, will have different images of the same organization. For example, the firms image as an employer, as held by either employees or job applicants, can be quite different from its image as a provider of goods and services, as held by customers or clients. Image perceptions are critical to both the stakeholders and the organization because they influence market transactions. Research has consistently demonstrated that corporate image is related to stakeholder decisions about the organization such as consumers perceptions of price level for goods or services (Klein and

Journal of Business Ethics 16: 401412, 1997. 1997 Kluwer Academic Publishers. Printed in the Netherlands.

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C. M. Riordan et al. dimension, social responsiveness, is a function of a firms internal mechanisms for responding to its environment. These mechanisms may also be regarded as signals of an organizations ability to meet external expectations. In an effort to achieve further understanding of the construct of corporate image, Fombrun and Shanley (1990) have discussed the importance of research which examines the image perceptions of the various stakeholders of an organization. By examining domain specific components of each stakeholders relationship with the organization, it may be possible to identify central causes and effects of image. Following this, the purpose of the present study is to propose and empirically test a theoretical model of corporate image from one stakeholders perspective, the employees of the organization. Examining corporate image from the employees perspective is important for several reasons. For one, employees are, of course, essential to an organizations performance. To the extent that employees perceptions of corporate image are related to their work attitudes and/or behaviors, an organizations image could affect organizational performance. Dutton and Dukerich (1991) found evidence that image perceptions do, in fact, influence employees actions. Specifically, they found that corporate image was important to each employees sense of self and that employees use image to gauge how outsiders are judging them. The deterioration of the organizations image, acted as a trigger that prompted employee action to address issues that were causing the deterioration of the image. However, this study did not hypothesize or test which specific employee attitudes and actions may be affected by corporate image. Subsequently, the present study relates to Fombrun and Shanleys (1990) call for research and also extends Dutton and Dukerichs (1991) work in two ways. First, it identifies and tests two organizational factors that are proposed as antecedents of employees image perceptions. Kennedy (1977) and Dowling (1986) suggest that both personal and organizational factors combine to form a set of meanings by which individuals describe, remember, and relate to a company. However, existing research has not identified a

Leffler, 1981), job seekers decisions to apply for employment (Gatewood et al., 1993), investors decisions to invest in the firm (Milgrom and Roberts, 1986), and employees attitudes and behaviors toward their organization (Dutton and Dukerich, 1991). Thompson (1967), Fombrun and Shanley (1990), and Spence (1974) indicate that the development of corporate image is a function of the signals that an organization transmits to its various stakeholder groups. These signals serve an important function in the competitive markets in which the firm operates. From the organizations perspective these signals convey information about otherwise unobservable characteristics of the organization, which are important to the market choices of potential stakeholders. These signals, therefore, serve to position the firm in its competitive markets. From the stakeholders perspective, each group has a different relationship with the organization and different interests that need to be satisfied through that relationship (Thompson, 1967). Thus, the various stakeholders selectively process the various informational cues or signals provided by the organization to judge the effectiveness of that organization for satisfying their interests and needs. Corporate image, subsequently, becomes a stakeholders overall perception of the organization, at least partially based on its ability to meet or provide for his/her particular needs and interests. The function of signals in market perceptions, at least partially, explains the role of image in the firms management of its social environment. Miles (1987) describes two dimensions of corporate social performance relative to its environment. The first, social responsibility, . . . may be thought of as the consequence between outcomes of corporate behavior and the norms, values, and performance expectations held in the larger social system (p. 73). In other words, social responsibility is viewed as a function of the correspondence between the firms signals (behaviors) and the interests of the social system. Related to this, Dowling (1986) explicitly discusses how a firms image reflects the publics perception of its social responsibility through its marketing (signalling) actions. Miles second

Corporate Image and Social Performance comprehensive list of these personal and organizational factors. The identification of such factors may enable an organization to alter its image among employees and subsequently alter employees attitudes and behaviors. Second, this study identifies and tests two variables that are proposed as consequences of employees image perceptions. As noted previously, Dutton and Dukerich (1991) concluded that employees use an organizations image to gauge how outsiders are judging the organization and, by extension, themselves. Deterioration in image initiates employees actions because each employees sense of self is tied, in part, to that image. In particular, individuals in organizations actively monitor organizational actions on social issues because such actions can be especially character-enhancing or damning (Dutton and Dukerich, 1991, p. 548). Deterioration in image, due to undesirable social responsiveness or performance by the organization, is an important stimulus for employee action. It is not, however, presently understood which specific employees attitudes and behaviors are influenced positively or negatively by corporate image. Identifying

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these attitudes and behaviors would clarify the link between the social performance of an organization and its employees actions.

The proposed model Figure 1 depicts the hypothesized causal model that will be tested in this study. The proposed model posits relationships among measures of the employees assessment of corporate leadership, a corporate image variable, and two measures of employees feelings of association with the organization. Specifically, we expect that employees assessment of the actions of corporate leadership are directly related to the employees perceptions of corporate image are related to their feelings of association with the organization. As previously noted, there is a very personal connection between organizational image and an individuals sense of self. Employees are motivated to take action in ways that are consistent with what they believe will reflect positively on the organization, and by association, on themselves as well (Dutton and Dukerich, 1991). This sense of self-association with the organization will

Fig. 1. Original causal model of corporate image

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C. M. Riordan et al. Miles (1987) describes how the philosophy of top managers varies considerably among firms pursuing the same business strategies. Top managements views of the organizations role in society directly influence the interaction of their organization with external stakeholders. Therefore, since corporate image is based upon perceptions of the actions of the organization (Dutton and Dukerich, 1991), it logically follows that the actions of top management, as the initiators of important actions, are a direct antecedent of employees image perceptions. Similarly, the board of directors can also be regarded as a source of important organizational actions and, thus, an antecedent of corporate image. Although all boards do not operate independently of top management, powerful boards do exist and are considered necessary to organizational effectiveness (Pearce and Zahra, 1991). Powerful boards actively contribute to the development of the organizations mission and goals (Pearce and David, 1987), provide checks and balances in corporate governance (Dalton and Kesner, 1985), monitor top management actions, and take appropriate steps to ensure organizational effectiveness. Through such actions, powerful boards can directly influence the employees perceptions of image by . . . imprinting their firms with their unique world view that sets the tone for definition of executives and employees, and guides the development of policies throughout the firm (Pearce and Zahra, 1991, p. 136). We, therefore, hypothesize that both the employees assessment of top management and the board of directors, and the employees satisfaction with top management and the board of directors will be directly related to their perceptions of corporate image. We regard assessment and satisfaction to be different constructs of the employees reactions to the actions of corporate leaders. Assessment refers to the employees overall cognitive evaluation about the adequacy of the decisions and behaviors of the leaders. Satisfaction, on the other hand, indicates the employees overall affective reaction towards these leaders.

manifest itself through employee attitudes and/or behaviors. Subsequently, we posit that employees perceptions of corporate image are related to two specific variables of association: job satisfaction and intentions to quit. The former variable can be regarded as an indicator of an emotional or affective association with the organization and the latter variable as a cognitive or evaluation measure of staying with or leaving the organization. For ease of presentation, the model will be discussed in two sections: (a) corporate leaders actions as antecedents to corporate image; and (b) employees association with the organization as an outcome of corporate image. The theoretical rationale for each path relationship in the model is discussed below.

Corporate leaders actions The model in Figure 1 is based upon the assumption that employees perceptions of corporate image are, in a large part, due to their interpretations of the actions of both the top managers, or senior executives, and the board of directors. That is, the images of organizations and their leaders are interwined (Sutton and Callahan, 1987, p. 406). By definition, the senior executives within an organization are considered to be the dominant coalition of decision makers (Thompson, 1967). The importance of such a group in the control of organizational actions and outcomes has long been recognized (e.g. Hambrick and Mason, 1984; Thompson, 1967). In fact, Hambrick and Mason (1984) argue that an organization is a reflection of its top management. From a classical organizational theory perspective, a firms effectiveness is often dependent upon the ability of top management to secure the cooperation of the employees to attain desired goals (Barnard, 1938). Thus, top management is the source of many actions such as goal setting, strategic planning, and monitoring of control systems which define salient features of each employees working environment. The actions of top management are also critical determinants of how an organization reacts to and manages its social environment.

Corporate Image and Social Performance Employee association with the organization As mentioned previously, Dutton and Dukerich (1991) determined that employees compare image to their definitions of self and react to the discrepancy between the two. As an extension of this determination, we posit that an employees association with the firm is affected by perceptions of corporate image. By association we mean the employees affective and cognitive relationship to the organization. Job satisfaction and turnover intentions are indicators of this association. Job Satisfaction. Job satisfaction is regarded as an important indicator of the employees relationship to the organization (Locke, 1976). As such, this construct has been directly linked to other critical organization and work variables such as commitment (Porter et al., 1974) and motivation (Hackman and Oldham, 1975). Job satisfaction is believed to be largely influenced by organizational characteristics (Herman and Hulin, 1972). Because corporate image is a perception of the organization, we hypothesize that image directly influences the employees job satisfaction. While there have been no studies that have directly measured the relationship between corporate image and job satisfaction, Wotruba (1990) found that the similar construct of job image was positively correlated to job satisfaction for sales personnel. Our hypothesis of the direct relationship of corporate image to job satisfaction is a logical extension of this empirical work. Turnover Intentions. The employees intention to leave the organization has been shown to be a precursor of actual termination or turnover (Steele and Ovalle, 1984). Turnover has several negative consequences for an organization among which are the financial costs of the separation with the leaver, the replacement of the leaver, and the training of the replacement (Boudreau and Berger, 1985; Cascio, 1991; Flamholtz, 1985). Subsequently, unwanted turnover can create a financial burden for the organization. Therefore, employees intentions to leave the organization, can be an important component of

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organizational performance. Additionally, this variable is, obviously, a direct measure of an employees association with the organization. The model in Figure 1 proposes three relationships concerning intentions to turnover. First is the direct, negative relationship with corporate image. Wortruba (1990) found such a relationship between job image and intentions to turnover. We extend this finding to corporate image. Conceptually, we argue that the employees image perceptions of the organizations actions toward its various stakeholders influences the employees intentions to remain or leave the firm. If the employee has negative perceptions of these actions, disassociation will likely follow. If perceptions are positive, the employee will likely remain with the firm. Second, the model proposes a direct, negative link between job satisfaction and intentions to turnover. This relationship is central to turnover models (Mobley, 1982) and has been empirically determined in several studies (e.g. Bedian and Armenakis, 1981). Third, an indirect, negative relationship is proposed between image and intention to turnover through job satisfaction. This is based on the previously discussed relationships between image and job satisfaction and job satisfaction and intentions to turnover.

Hypotheses In sum, based on the existing research as discussed above, the present study hypothesizes a number of relationships. With respect to relationships among the antecedents of corporate image, it is hypothesized that: H1a: Satisfaction with top management will be positively related to corporate image. H1b: Assessment of top management will be positively related to corporate image. H1c: Satisfaction with the board of directors will be positively related to corporate image. H1d: Assessment of the board of directors will be positively related to corporate image.

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C. M. Riordan et al. zational employees, as the way they believe others see the organization (p. 520). The items were: Generally I think Company X has a good reputation in the community; Generally I think Company X has a good reputation in the industry; Generally I think Company X is actively involved in the community; Generally I think Company X has a good overall image; Generally I think Company X is known as a good place to work; and Generally I think Company X has a good reputation among its customers. Scale anchors ranged from 1 (strongly disagree) to 5 (strongly agree). Corporate leadership. Four measures of perceptions of corporate leadership were included: (a) satisfaction with top management; (b) satisfaction with board of directors; (c) assessment of top management; and (d) assessment of board of directors. Satisfaction with Top Management was measured with a single-item asking respondents about their satisfaction with the top management in general. Scale anchors ranged from 1 (strongly dissatisfied) to 5 (strongly satisfied). A similar item was used to measure Satisfaction with the Board of Directors. Assessment of Top Management was measured with four items, each of which had scale anchors that ranged from 1 (strongly disagree) to 5 (strongly agree): (a) Top management at this company seems to do an efficient job; (b) Top management at Company X is sincere in its attempt to understand the employees point of view; (c) Company X has a poor future unless it can attract better top managers; (d) Top management can be trusted to make sensible decisions for this companys future. Assessment of the Board of Directors was measured with three similar items: (a) The Board of Directors at Company X seems to do an efficient job; (b) The Board of Directors is aware of the needs of the employees; and (c) I have full confidence in the decisions made by the Board of Directors. Intentions to turnover. Intentions to turnover was assessed with the single item measure I plan to look for a job with another company within a year. This measure was designed to tap respondents reported tendencies to leave their

With respect to job satisfaction, it is hypothesized that: H2: Corporate image will be positively related to job satisfaction. With respect to intentions to turnover, it is hypothesized that: H3a: Job satisfaction will be negatively related to intentions to turnover. H3b: Corporate image will be directly and negatively related to intentions to turnover. H3c: Corporate image will be indirectly and negatively related to intentions to turnover through job satisfaction.

Methodology Sample The sample for this study was comprised of 174 employees from a small electric utility company, representing 88% of those available employees at the time of data collection. The respondents mean length of service was 8 years and 68% of the respondents were males. Additionally, the respondents held a variety of job positions, with approximately 78% of the respondents being in nonmanagement positions, such as clerical staff and trades/crafts engineers. It is important to note that employees were knowledgeable of the actions of the board of directors of the utility. This was due to both the size of the company and the boards activity level. Individual board members were personally known to employees as were the decisions made by the board.

Measures Corporate image. A six item scale was used to measure the employees general image of the organization. This scale was based on Dutton and Dukerichs (1991) work which defined organizational image, from the perspective of organi-

Corporate Image and Social Performance employing organization. The scale anchor ranged from 1 (strongly disagree) to 5 (strongly agree). Job satisfaction. Global job satisfaction was measured using five facet items including satisfaction with pay, coworkers, career, the work itself, and promotion opportunities. Each item used a scale which ranged from 1 (strongly dissatisfied) to 5 (strongly satisfied). The five facets items were summed to obtain the global job satisfaction score for each employee (Warr et al., 1979).

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Procedure The measures used in this study were part of a more extensive organizational opinion survey. Data were collected from subjects using surveys administered in employee meetings during regular working hours. Prior to survey administration, one of the researchers explained the purpose of the survey and obtained the employees consent to participate in the project. Confidentiality of respondents was guaranteed by ensuring minimum respondent identification, off-site data processing, and the use of group means and frequency counts for organizational feedback purposes.

Analysis We tested the theoretical model presented in Figure 1 through structural equation modeling techniques. Specifically, LISREL VII ( Jreskog and Srbom, 1989) was employed using the covariance matrix of the sample. To account for the effects of measurement errors, scale reliabilities were used to fix the relationships between the observed scale scores and their corresponding latent constructs. That is, the reliabilities of all measures were used to estimate latent variables in the structural model by setting the path from a latent variable to its corresponding observed variable equal to the square root of the reliability of each measure (Podsakoff et al., 1986). Since the constructs of intentions to turnover, satisfaction with the board of directors, and satisfaction

with top management were each measured with a single item and a reliability score was not available, we followed Anderson and Gerbings (1988) suggestion that a reliability of 0.90 be employed for single-item measures. Additionally, the error variances for each of the measures were also fixed. Specifically, the amount of random error variance was fixed to one minus the reliability of the measure times the variance of the observed score (Podsakoff et al., 1986). Several statistics were used to evaluate overall model fit. Because sample size often affects the goodness-of-fit chi-square, several researchers have suggested multiple indices for judging the fit of a model to data (e.g. Marsh et al., 1988). Therefore, the following indexes were used in the present study to evaluate model fit: (a) the normed fit index (NFI; Bentler and Bonett, 1980; Mulaik et al., 1989) as a relative comparison of the proposed model to a baseline model (i.e. null model); (b) the Tucker-Lewis Index (TLI; Tucker and Lewis, 1973) as an additional incremental index to assess fit of the model to the data; (c) the goodness-of-fit index (GFI) as an overall degree of fit of the predicted square residuals compared to the actual data; (d) the chi-square test as an indication of fit between the predicted and obtained covariance matrix, and (e) the root-mean-square residual (rmsr; Jreskog and Srbom, 1989) as a measure of the average of the fitted residuals. In brief, there is no single statistical test that best describes the strength of a models predictions (Hair et al., 1992). Rather, some combination of the above indices should be used to determine overall model fit. While there are no specific guidelines for assessing the fit of a model, in general, the larger the values of the TLI, NFI, GFI, and AGFI (i.e. values above 0.90), the better fitting the model (Bollen, 1989). For the rmsr, a value of less than 0.05 is considered acceptable. Furthermore, a nonsignificant chi-square value is an additional indication of acceptable model fit. It should also be noted that even if the overall fit of the model is within an acceptable range, it is necessary to examine the predicted relationship of each path individually to determine the statistical significance of that particular relationship or component of the model ( James et al.,

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C. M. Riordan et al. Model fit The results of the LISREL analyses indicated that the model, as presented in Figure 1, was not an acceptable fit to the data. None of the fit indices were within the commonly accepted ranges of values for support (NFI = 0.73; TLI = 0.56; GFI = 0.83; chi-square = 168.24, 12df (p < 0.01); rmsr = 0.09). Therefore, as recommended by Bollen (1989), we used a two step procedure for revising the hypothesized model. First, all nonsignificant, hypothesized paths were trimmed from the model. These were: satisfaction with top management to corporate image, and satisfaction with board of directors to corporate image. Second, paths were added to the model if two conditions were met: (a) the modification indices, provided by LISREL VII from the test of the original model, indicated that the path should be added, and (b) there was theoretical justification for the indicated path. In this case, two paths were added: (a) assessment of top management to job satisfaction and (b) satisfaction with top management to job satisfaction. Both of these paths were supported by the research of Niehoff et al. (1990) which found significant positive correlations between employees ratings of top management and three attitudinal variables, including job satisfaction. The items for evaluating top management actions in our study appeared to be conceptually similar to the five management actions used in the Niehoff et al. (1990) study. Subsequently, this similarity provided the theoretical rationale for

1982). Subsequently, following the test of the overall theoretical model, we examined each of the parameter estimates and the t-values provided through LISREL VII to determine if the modeled causal paths among the antecedents and outcomes of corporate image were, in fact, statistically significant.

Results The means, standard deviations, alpha coefficients, and correlations among the modeled variables are presented in Table I. As can be seen from this table, all reliabilities are within ranges deemed acceptable for research (Nunnally, 1978). Further, Table I shows that model constructs were significantly related. While this could signal a multicollinearity problem, it may not be a problem in the present data set for two reasons. First, a correlation of 0.90 between two estimates is the most frequently cited value in the literature which might indicate collinearity problems (Hayduck, 1987). Second when collinearity is a problem, the information fails to converge to a maximum likelihood and no output is produced. Since the information matrix did converge and output was produced and the correlations in Table I are less than 0.90, multicollinearity does not appear to be problem in the present study.

TABLE I Descriptive statistics of variables Mean 1. 2. 3. 4. 5. 6. 7. Assessment of BD Satisfaction with BD Assessment of top mgt. Satisfaction with top mgt. Image Job satisfaction Intention to turnover 3.42 3.18 3.25 3.87 3.84 3.62 2.88 S. D. 0.83 1.29 0.74 0.91 0.76 0.77 1.10 0.77 NA 0.67 NA 0.90 0.80 NA 1 1.00 0.79 0.73 0.46 0.58 0.72 0.55 2 3 4 5 6 7

1.0 0.66 0.44 0.46 0.62 0.44

1.0 0.67 0.57 0.77 0.62

1.0 0.51 0.62 0.42

1.0 0.58 0.52

1.0 0.57

1.0

Note: All correlations are significant at p 0.05.

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Fig. 2. Modified causal model of corporate image.

adding these paths to our model. The modified model is presented in Figure 2. Additional analyses, using LISREL VII, were then conducted on the modified model. The resulting fit indices were as follows: chi-square = 34.18, 8 df, (p < 0.01); TLI = 0.89, GFI = 0.94, NFI = 0.94, and rmsr = 0.035. Based on these indices, we concluded that the revised model was an acceptable fit to the data. Figure 2 also presents the standardized parameter estimates of the model. Each of the paths shown was significant at p < 0.05. In summary, the revised model indicated that employee assessment of both top management and the board of directors actions were related positively to image. Corporate image, in turn, was related positively to job satisfaction and negatively to intentions to turnover. Additionally, both satisfaction with top management and assessment of top management actions were positively related to job satisfaction. Finally, job satisfaction was negatively related to intentions to turnover. In terms of the hypotheses of this study, we concluded that the analyses: 1. supported hypotheses H1b and H1d but not H1a and H1c. The antecedents of corporate image seem to be the employees assessment of top management and the

board of directors actions, not their satisfaction with these groups. 2. supported hypothesis H2. Corporate image was directly related to job satisfaction. 3. supported hypotheses H3a, H3b, and H3c. Job satisfaction was negatively related to intentions to turnover. Corporate image was both (a) directly and negatively related to intentions to turnover and (b) indirectly and negatively related to intentions to turnover through job satisfaction. 4. while not originally hypothesized, both satisfaction with top management and assessment of top managements actions were directly and positively related to job satisfaction. Discussion The results of the present study add to the growing body of evidence that corporate image is an important construct in understanding how the organizations management of its social environment affects the attitudes and behaviors of employees. It must be remembered that the measurement of image in this study asked employees to estimate the reaction of groups external to the organization. As Dutton and

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C. M. Riordan et al. of its own employees attitudes and intended behaviors. Furthermore, these attitudes and intended behaviors can also have direct financial implications for the firm. As mentioned previously, intentions to leave an organization are strongly related to actual termination. The costs of turnover, especially of good performers, is known to be high and include recruitment, selection, and training costs as well as lost productivity (Mobley, 1982). In fact, even though turnover costs may vary across occupations and industries, Hom and Griffeth (1994) identified that, for particular occupations, turnover costs could range anywhere from $3,441 to $16,484 per turnover incident. Additionally, job satisfaction has been linked to important variables, such as employees willingness to change and organizational commitment, which logically affect overall organizational performance. Therefore, corporate actions taken relative to the social environmental can have direct effects on the economic wellbeing of the organization through their impact on the organizational members. Another way of assessing the costs and benefits of social performance is through its effects on the relationship between corporate leaders and the organizations employees. The employees assessment of both the board of directors and the top managers were found to effect the employees image perceptions. We interpret this to indicate that employees review the actions of corporate leaders relative to their effects on external stakeholders. That is, the employees assessment of the sensibleness of decisions and the efficiency of job performance of these leaders reflects, at least partially, how they think others will react to these leaders actions. The employees assessment of corporate leaders, in turn, has obvious implications for overall organizational performance. Logically, there are costs associated with the actions of leaders being judged as ineffective by employees. For example, it is unlikely that the directives of leaders who are assessed as ineffective by employees will be well accepted and followed. Although this study has contributed to the knowledge about corporate image, a few limitations of the present study should be noted. First, when interpreting the results of this study, one

Dukerich (1991) discuss, employees achieve part of their self-definition through their membership in an organization. The reactions of others to the organization are a part of this self-definition. Positive reactions are seemingly beneficial to selfdefinition and negative reactions are detrimental. Said another way, the image of the organization held by external groups serves as a basis for the employees reactions to the organizations actions. Dutton and Dukerich explain that The relationship between individuals senses of their organizational identity and image and their own sense of who they are and what they stand for suggests a very personal connection between organizational action and individual motivation (1991, p. 550). This study offers empirical support for Dutton and Dukerichs (1991) conclusions. We found clear evidence that the employees estimates of the reactions of external groups to their employing organization (i.e., the employees perception of corporate image) influence both their job satisfaction and their intentions to leave the organization. This influence is also in the expected directions. Image is positively related to job satisfaction and negatively related to intentions to leave the organization. If the employee views the company to be lowly regarded by external groups (i.e., a poor corporate image), he/she has lower job satisfaction and a higher probability of leaving. If the company is highly regarded by external groups, the employees job satisfaction is higher and his/her probability of leaving is lower. Poor external reactions seemingly prompt disassociation of the employee from the organization. These findings have important implications for understanding the effects of an organizations attempts to manage its social environment. Actions of the organization which prompt positive reactions from external stakeholders can have direct, positive effects on the organizations employees. Actions which prompt negative reactions can have corresponding detrimental effects on its employees. To us, the results of this study address the issue of payoffs to the organization of interactions with its social environment. Our results indicate that there are benefits and costs of such actions to the organization in terms

Corporate Image and Social Performance must recognize that the sample was limited to a single organization within the electric utility industry. Additionally, the organization may have been unique in that it had a very active Board of Directors which maintained relationships with both top management and the employees. In future research, it will be important to investigate multiple organizations within different industries to determine the generalizability of the antecedents and consequences of corporate image. Second, the present study was limited by constraints in interpretation due to monomethod bias. Namely, all of the variables studied in the theoretical model were obtained through selfreport surveys. However, this may not be as serious as once thought. A recent study by Crampton and Wagner (1994) examined percept-percept inflation using 42,934 correlations published in 51 articles. They concluded that their findings challenge the validity of general condemnations of self-report methods, suggesting instead that domain-specific investigations are required to determine which areas of research are especially susceptible to perceptpercept effects (p. 67). Additionally, it could be argued, particularly for corporate image, that it is, in fact, the employees perceptions of the organizations image that influence subsequent attitudes and behaviors. Therefore, self-report data of both image and attitudes are appropriate. Future research could benefit, however, by the inclusion of alternate measures such as actual turnover. In sum, more research is obviously necessary in order to fully understand the effects of corporate image and the management of corporate social performance on employees attitudes and behaviors. One critical research topic is the relative importance of various external groups or individuals on employees perceptions of corporate image. External stakeholders differ in terms of their numbers, access to public media, influence on corporate decisions, and control of resources needed by the organization. One could postulate that external groups that have a strong effect on the financial status of the organization are the most important referents for employees image perceptions. Similarly, individuals who have strong, personal relationships with the

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employee, e.g. family members, could exert more influence than others. If distinct groups or types of individuals can be identified as critical sources of image perceptions, we could more clearly understand the relationship between the organizations social performance and its effect on employees. References
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