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Reconsidering the Reputation: Performance Relationship: A Resource-Based View

Reconsidering the Reputation: Performance Relationship: A Resource-Based View. Brian Boyd Arizona State University Don Bergh University of Denver Dave Ketchen Auburn University. Journal of Management , 2010. Evolution of Paper. Design to showroom time: One year

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Reconsidering the Reputation: Performance Relationship: A Resource-Based View

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  1. Reconsidering the Reputation: Performance Relationship: A Resource-Based View Brian Boyd Arizona State University Don Bergh University of Denver Dave Ketchen Auburn University Journal of Management, 2010

  2. Evolution of Paper • Design to showroom time: One year • Genesis of project was a question regarding construct validity • Paper morphed into a hybrid methods/theory topic

  3. University Competition: Pre-WWII “…colleges struggling to find available models and competing on terrain that was not yet stable or structured” (Washington & Ventresca, 2004)

  4. Post-War: Geographic Integration and Stratification National Institutions:Compete on Differentiation Financial Times MBA Tuition 2007: Top decile: $80,000 Bottom decile: $37,000 Local Institutions:Compete on Price

  5. What Is B-School Reputation? • Labels • Quality • Prestige • Measures • Graduate offerings • Research output • Faculty DGI • Department size

  6. Rindova’s 2005 Model of Reputation Reputation is composed of two separate dimensions, with unique drivers and outcomes

  7. SEM: The Problem of Equivalent Models SEM appeal • Concurrent test of multiple relationships • Both global and local tests of hypotheses • Global fit measures enable comparison of competing hypotheses Equivalent models • Many configurations can yield identical fit • Rarely addressed in published studies • Completely different patterns of covariation and causation

  8. Henley et al, ORM 2006Replication of Stimpert & Duhaime 1997 IndustryProfitability R&DExpenditures SBUEffectiveness FirmDiversification CapitalInvestment Hypothesized Model

  9. Henley et al, ORM 2006Replication of Stimpert & Duhaime 1997 IndustryProfitability R&DExpenditures SBUEffectiveness FirmDiversification CapitalInvestment Reverse Causality Model

  10. Henley et al, ORM 2006Replication of Stimpert & Duhaime 1997 IndustryProfitability R&DExpenditures SBUEffectiveness FirmDiversification CapitalInvestment Each model has a unique logic, but identical chi-square, GFI, CFI, and so on Covariation Model

  11. Content Analysis by Henley and Colleagues • Reviewed 109 SEM articles • Few alternate or equivalent models addressed in papers • 79% of articles had at least one equivalent model • Causality reduced to covariation in 71% of studies • Causality reversed in 48% of studies Equivalent models follow a very specific set of criteria. Much broader range of alternate models available.

  12. Going From Equivalent to Alternate Models:Applying the RBV Lens • RBV defines reputation as a general attribute, with ambiguous and interconnected elements • Synergies between elements combine to build a durable competitive edge • Example: Do better students attract better profs, or do better profs attract better students? • Accumulation advantage posits an ever widening disparity between ‘haves’ and ‘have-nots’

  13. Reconfiguring Rindova’s Components .37 (3.4) Chi-square is non-sig GFI is 0.97 RMSR is 0.05 Student Quality 1.0 GMAT Reputation -.94 (10.5) Media Rank .93 (11.1) Faculty Pubs .92 (11.2) Degree Prestige

  14. Direct Comparison of Competing Logics

  15. Additional Configurations (a) Prominence as part of reputation (b) Direct effect on salaries (c) Prominence and salaries as common dimension

  16. Comparison of Models • The usual suspects • 2 • GFI • RMSR • Adjustment for model complexity • 2 /df • AIC • Standardized 2 • Benchmarks against null models • CFI • IFI

  17. Comparison of Models • Hypothesized model fit better than Rindova on all eight indicators • Alternative A – comparable to Rindova on all eight indicators • Alternative B – Best fit on four indicators, but less parsimonious and no significant improvement on 2 • Alternative C – Better fit than Rindova, worse than hypothesized or Model b

  18. Hypothesized Model

  19. Implications • Need for devils advocacy by both authors and reviewers • RBV logic more compelling for reputation than signaling or institutional perspectives • Difficult to boost reputation simply by pulling a lever • Prominence is a critical mediator of reputational effect

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