Moderating role of corporate reputation in the influence of external support on organisational resilience and performance

In the organisational context, resilience is a multidimensional and sociotechnical phenomenon that addresses how organisations manage uncertainty (Lee et al., 2013). A widely accepted definition of organisational resilience has not yet emerged. It can be understood as a capacity, property, or an outcome, process or a state of an organisation (Hamel & Välikangas, 2002; Kantur & Iseri-Say, 2015; Vogus & Sutcliffe, 2007), referring to the ability to survive and function successfully despite unfavourable conditions. It can also be understood as “maintenance of positive adjustment under challenging circumstances such that the organisation emerges from those conditions strengthened and more resourceful” (Vogus & Sutcliffe, 2007, p. 3418), able to recognise and adapt to unexpected changes (Sutcliffe & Vogus, 2003; Manyena, 2006; Lengnick-Hall et al., 2011; Lee et al., 2013; Linnenluecke, 2017; Koronis & Ponis, 2018). According to McCann et al. (2009, p. 47), “an organisation also demonstrates resiliency be experiencing a severe, life-threatening setback, but then reinventing itself around its core values”. Thus, not only the ability to adapt but also to reinvent is sometimes understood as organisational resilience. Various definitions give rise to various resilience drivers, which mainly refer to social and cultural factors, such as sensitivity to changes and situation awareness, preparedness and the keystone vulnerability management or adaptive capacity (Norris et al., 2008; Scholl & Patin, 2012; Bruneau et al., 2003; Wicker et al., 2013; Kantur & Iseri-Say, 2015; Koronis & Ponis, 2018; Szydło & Grześ-Bukłaho, 2020). They often serve as a basis for building tools for the assessment of organisational resilience. However, no single consistent scale has been created for measuring organisational resilience.

According to Lee et al. (2013), organisational resilience is a target, which is desirable although continuously moving. This is important not only in a crisis but also in the daily life of an organisation, as it contributes to performance during business as usual. Being resilient can provide organisations with competitive advantages, as there are similarities and links between organisational resilience and competitive excellence (Vargo & Seville, 2010). Besides, the drivers of organisational resilience are, in many cases, the same as those that are needed to gain a competitive advantage (Mitroff et al., 1989; Mitroff, 2005). Some authors suggest possible links between organisational resilience and profitability (Sundström & Hollnagel, 2006). According to them, “to be resilient, an organisation must be able to deal with unexpected and disruptive events as well as to understand the longer-term impact of such events. (…) this translates into the ability to identify and successfully manage risk at all levels in the organisation while sustaining a profitable business” (Sundström & Hollnagel, 2006; p. 1). It is often underlined that resilience is the capacity to rebound from adversity strengthened and more resourceful (Sutcliffe & Vogus, 2003). Therefore, to be resilient means to emerge stronger and to achieve positive potential outcomes (such as increased competitiveness or innovativeness, more adjusted internal processes or higher profitability). Carden et al. (2018) proved the existence of the relationship between organisational resilience and organisational performance from the financial aspect. The observation also seems to be valid in relation to other categories considered when measuring organisational performance. Concerning the above, the following hypothesis was formulated:

H1a. A relationship exists between organisational resilience and organisational performance.

Undoubtedly, modern organisations are unable to operate effectively without interacting with other market players. Bird (1988) emphasised that social, political, and economic variables, beside individual features of an organisation, created the context for conducting business activities. Hence, the ability to build a lasting relationship with the environment seems to be important, as it allows for “the acquisition of desired behaviour from the environment” (Sznajder, 2003, pp. 194–195), which may be crucial not only to survive but also to win a competitive fight. According to Gnyawali and Fogel (1994), the presence of local, financial and social encouragements significantly changed the entrepreneurial process. This means that external support influences the activities of an organisation as a whole.

External support should be generally understood as tangible and intangible resources provided by external bodies (various groups of stakeholders) to assist an organisation. According to Cheah et al. (2019), external support may be differentiated by the type of support (direct and indirect) and the type of a stakeholders (e.g., government, private or nonprofit). Direct support is typically financial (i.e., in the form of donations, grants, subsidies or earnings from any fundraising activities (Cheah et al., 2019)). Indirect support can be provided in all non-financial forms, e.g., various external sources of knowledge, information and expertise (Bala Subrahmanya, 2013). Organisations seek external support once they perceive a gap between the existing internal resources and the resources required to achieve business objectives (Carey, 2015). Thus, the use of external resources focuses on increasing competitiveness and development and, thus, on striving to achieve better results. However, Mambula (2004) emphasised that although the impact of external support on organisational performance has been studied many times (Cook, 2001; Warren & Hutchinson, 2000), the reports are not explicit in this regard.

On the one hand, research results by Cook (2001) on small and medium-sized enterprises indicate a different level of organisational performance despite the same financial form. On the other hand, Carey (2015) proved that in the case of small and medium enterprises with indirect external support in the form of buying business advice, they achieved superior performance. This finding is consistent with research results by Mambula (2004), who believed that even in the case of exceptional internal resources, the lack of external support would result in insufficient performance. In addition, in studies on social organisations, Cheah et al. (2019) proved that both direct (financial) and indirect (training) support had a positive impact on organisational performance (both financial and social) through business planning. And finally, MacMahon (2001) showed that external funding dependence and financial advice were associated with better performance. Thus, considering the above, the following hypothesis can be assumed:

H1b. A relationship exists between external support and organisational performance.

By definition, each enterprise is a self-governing, independent and self-financing organisation, operating at its own risk and will. However, this independence of action means decision-making independence rather than a lack of business connections, as nowadays, it would be difficult to find an organisation that does not exert influence on other organisations or is not influenced by them. Organisations, as open systems constantly exchange resources with the environment. It is often stressed that ensuring survival and providing the organisation with development opportunities under contemporary, increasingly turbulent environmental conditions, requires mastery in management. Furthermore, it is not just about the mastery in managing internal resources, but also, and perhaps above all, about the mastery in creating and managing relationships with the stakeholders and acquiring external resources.

Externally obtained resources can be crucial for the organisation's survival. According to McCann et al. (2009), having well-established external networks of relationships for accessing financial, human or other resources become essential in a crisis. Also, Tengblad and Oudhuis (2018) stated that to be resilient, organisations had to develop mutually trusting relationships with various groups of stakeholders (committed co-workers, loyal customers, reliable suppliers/partners, supportive owners, media, government, etc.). Such relationships can be treated as a kind of investment or insurance policy for poor times. They can also stimulate the customer citizenship behaviour perceived as non-obligatory consumer actions that create value for the company (Dewalska-Opitek & Mitręga, 2019), which can be especially important in a crisis. And “although establishing strong stakeholder relationships will not likely help an organisation avert every crisis, it can play an important role in how the organisation resolves a crisis it cannot avoid” (Ulmer, 2001, p. 593). First, it can decide whether the organisation receives any external help.

According to Ulmer (2001, p. 594), “if stakeholder relations are not strong, these groups may withdraw their support during a crisis, prolong the effects of a crisis, or intensify the threat associated with the event” and, thus, negatively affect the organisation's resilience. Second, it can determine the scope of external support that can be given to the organisation (from political support, purchase discounts and reasonable credit terms to sharing the crisis-mitigating resources). Being a part of business interaction networks allows an organisation to gather knowledge and use expertise more quickly and effectively. In turn, such external support allows an organisation to manage unexpected challenges, respond more appropriately to adverse conditions and recover from misfortune, damage or destabilising perturbation in the environment. External support, thus, can have a positive influence on organisational resilience. Therefore, considering the above, the following hypothesis can be assumed:

H1c. A relationship exists between external support and organisational resilience.

Appropriate management of stakeholder relationships can bring measurable benefits to an organisation from minimising the risks associated with, e.g. employee strikes, to ideas for great innovation or higher innovativeness obtained despite the lack of sufficient internal resources. To understand relationships and resources, the organisation might need to access other organisations and institutions during potentially disruptive events, which provide a better chance of gaining access to these resources. It must be underlined that external support is only one possible choice among different resources essential for creating organisational resilience. Besides, received support does not guarantee maintained organisational resilience, although the possibility exists. Moreover, it may not only bring results in the form of strengthened organisational resilience and the short-term growth of organisational performance but also can ensure the sustainability and stability of organisational functioning in the long-term perspective by developing solutions that strengthen the organisation's ability to manage the unexpected. In the context of the relationships described above, a need arises to analyse the impact of external support on organisational performance while analysing the mediating role of organisational resilience. It will allow verifying and more comprehensively explaining the mechanism behind the influence of external support on organisational performance. Therefore, a hypothetical model for the impact of external support on organisational performance was assumed, considering the mediating role of organisational resilience, which is clearly connected to both. Therefore, in light of the above, the main hypothesis maintains that:

H2. External support influences the organisational performance (an indirect effect) through organisational resilience (an intermediary variable).

The diagram presented in Fig. 1 illustrates the adopted research hypotheses.

Fig. 1

The growing body of research demonstrates that corporate reputation is indicated as a very important intangible resource of a company (Ali et al., 2019; Bergh et al., 2010; Djordjević & Djukić, 2008; Roberts, 2002), and even considered to be the most important (Pérez-Cornejo et al., 2020; Almeida & Coelho, 2019; Hall, 1992). The literature provides many definitions of the term, but they are not consistent. The first approach treats corporate reputation as awareness, i.e. the perception of the company's stakeholders, without its simultaneous judgement (Fombrun & van Riel, 1997). Another is an assessment, where the focus is on the opinion of the company's status (Pharoah, 2003) or assets (Weigelt & Camerer, 1988) but this approach is criticised for the excessive concentration on the consequences of the phenomenon (Barnett et al., 2006). Considering all the approaches above, the definition by Barnett et al. (2006) seems very apt as it covers all aspects and describes corporate reputation as “observers’ collective judgments of a corporation based on assessments of the financial, social, and environmental impacts attributed to the corporation over time” (Barnett et al., 2006, p. 34). Noteworthy is also the definition of a higher degree of generality provided by Pérez-Cornejo et al. (2019), where “corporate reputation is defined as the expectations of various stakeholders regarding the company's ability to satisfy their interests” (Pérez-Cornejo et al., 2019, p. 1252).

Although the literature offers different concept definitions (Šontaitė-Petkevičienė, 2019; Barnett, 2006), researchers seem to agree that corporate reputation is a collective phenomenon as the topic always revolves around a group of people (i.e., stakeholders) (Rindova & Martins, 2012; Walsh et al., 2009; Cretu & Brodie, 2007). Thus, there is no doubt that corporate reputation has an immense impact on building the relationship of the company with its stakeholders (Pérez-Cornejo et al., 2020; Bergh et al., 2010), and also allows shaping their desired behaviours (Ali et al., 2019). However, it should be remembered that individual groups of stakeholders have different characteristics and also differ in the nature of their participation in the organisation (Ali et al., 2015; Gabionetta et al., 2007). Therefore, the drivers and benefits of positive corporate reputation are different.

First, good corporate reputation results in a higher level of consumer satisfaction, trust, loyalty, and word-of-mouth (Roberts, 2002; Walsh et al., 2009; Chun, 2005; Fedorko et al., 2017; Szwajca, 2017), and, very importantly, customer value (Cretu & Brodie, 2007). Therefore, it affects consumer purchasing decisions. Consumers are willing to pay premium prices and are less sensitive to price changes (Burke et al., 2018), which seems crucial because buyers are main creators of the revenue streams (Pérez-Cornejo et al., 2020; Ali, 2011; Walsh et al., 2009). Second, corporate reputation is a factor in achieving sustainable competitive advantage that is difficult to imitate, and, as a consequence, it can become a source of superior profits (Almeida & Coelho, 2019; Rindova & Martins, 2012; Bergh et al., 2010; Deephouse, 2000; Hall, 1992; Walsh et al., 2009; Roberts, 2002; Djordjević & Djukić, 2008). Third, it affects the trust and loyalty of investors (Helm, 2011), suppliers and other contractors (Potgieter, 2018). Fourth, it helps to attract adequate human resources from the labour market, has an impact on positive feelings of employees (Ali et al., 2019; Potgieter, 2018; Bieńkowska et al., 2020), and also reduces the voluntary turnover (Makarius et al., 2017). As a consequence, corporate reputation affects organisational performance (Bergh et al., 2010; Pradhan, 2016) and company value (Almeida & Coelho, 2019; Roberts, 2002).

Corporate reputation is based on communication processes and personal stakeholder experiences, i.e., as a result of satisfying experiences with a corporate product or service, but also as a result of a broader assessment of employment conditions, investment opportunities and engagement in socially responsible behaviour or financial and competitive performance (Gabionetta et al., 2003). Stakeholders tend to pay special attention to the quality, timeliness, openness and honesty of communication, which seems to contribute substantially to the fair valuation of an organisation's reputation. It is not surprising that behaviours, reactions and decisions of stakeholders are influenced by those factors and, as a consequence, by the subjectively perceived organisation's reputation. They are more willing to support organisations that receive a better evaluation. It is noteworthy that the level of performance is also an important factor to consider during the evaluation of an organisation's reputation. Gabionetta et al. (2003) stated that well-performing companies are generally regarded as more credible — i.e., healthier and better managed, thus, able to deliver positive results now and in the future — than poorly-performing companies. Reputation increases the organisation's attractiveness for partners, joint ventures and prospective funding sources, leads to lower costs and higher prices, and, as a consequence, the organisation can achieve higher profits (Rhee & Valdez, 2009).

We can also observe a kind of feedback between external support and organisational performance in the context of corporate reputation. Corporate reputation changes over time. When seeking further external support, organisations must try not to fail the trust of stakeholders. Therefore, they must demonstrate the ability to “use” the offered external support in the best possible way (that can be judged, i.e., by organisational performance), which allows stakeholders to think that they (organisations) thoughtfully “consume” the offered resources. In that context, it seems that the effectiveness of external support and its impact on the overall effectiveness of the organisation could be higher, and reputation (good reputation and the willingness to maintain it as a policy for the future) can be a catalyst for this relationship. Therefore, considering the above, the following hypothesis can be assumed:

H3a. The higher is the corporate reputation, the greater is the influence of external support on organisational performance.

The relationship between corporate reputation and the scope of external support is undisputable. Good reputation conveys the company's overall attractiveness, increases investor confidence and customer trust (Fombrun, 2005). Thus, it induces repeat purchases or encourages potential investors to make additional financial resources available. And vice versa, poor reputation is not conducive to obtaining additional loans or capital contributions. It can, therefore, be concluded that corporate reputation is important for coping, is often emphasised once acquired, and can protect the organisation in the event of a crisis. In situations of an instability or crisis, it can buy some time as it is highly probable that stakeholders, aiming to reduce uncertainty in decision-making processes, would be more likely to base their decisions on the perceived reputation of the organisation. Therefore, by developing an appropriate reputation background, an organisation may even escape crises or their harmful consequences (Koronis & Ponis, 2012) or have more time and space to remedy the problem if crises are unavoidable. As a consequence, it can function successfully despite unfavourable conditions, i.e., survive, ensure business continuity and recovery. Hence, by making external support more accessible, corporate reputation also has the potential to strengthen an organisation's capability to modify negative and inflexible propensities to face unpredicted events better (which is organisational resilience).

This relationship seems to work especially well if crises are not the fault of the organisation. According to Ali et al. (2019), if, e.g., a political action leads to economic instability, reputation can protect against negative effects. The same was observed during the crisis caused by COVID-19 pandemic. In fact, both of these situations did not fully test the reputation of organisations. The origin of crises can be different, and corporate reputation is especially important in the case where the organisation may become the target for blame. Faced with incomplete information about company's actions, stakeholders not only interpret the first-order signals sent by companies but also rely on their previous experience and the evaluative signals refracted by other key stakeholders (Fombrun, 2005). However, Koronis and Ponis (2012, p. 283) stated that “the problem with corporate reputation is that it is solely based on the perceptions and evaluations of the stakeholders that are flux, situational and easy to be changed within a relatively short amount of time”. Each crisis should be treated as a potentially reputation-damaging event that can be followed by the rapid erosion of reputation. In such a case, key stakeholders of the organisation may react negatively by lowering their quality of involvement, acting confrontationally towards the management, demanding better contractual terms, and/or detaching from the firm. This translates into difficulties in obtaining new clients and maintaining current ones (Rhee & Valdez, 2009), which together significantly reduces the ability to handle difficult situations (organisational resilience).

In summary, by strengthening the network connections with other stakeholders, corporate reputation has an impact on “valorising businesses” in a competitive environment, especially in the context of, e.g., economic downturns, because stakeholders share the view that it contributes to a healthier (more resilient) business (Andres & Rounds, 2015). It is for sure not the main, direct and certainly not the only factor influencing organisational resilience. However, attracting stakeholder interest helps to keep market opportunities and make available new resources to manage uncertainty and develop, which certainly can lead to the strengthening of organisational resilience. Nevertheless, it should be treated as a catalyst rather than a direct factor shaping organisational resilience. Therefore, the following hypothesis is offered: H3b. The higher is the corporate reputation, the greater is the influence of external support on organisational resilience.

As mentioned above, corporate reputation is linked with organisational performance (Rindova & Martins, 2012; Bergh et al., 2010). According to Tracey and French (2017, p. 57), “firms with superior reputations have a greater capacity to increase prices, retain customers, attract higher quality managers and employees, as well as more committed investors and capable strategic partners”. Most research on the topic points to the direct effect between these constructs (Roberts & Dowling, 2002). However, there is some doubt regarding indirect influence (Tracey & French, 2017).

The relationship between corporate reputation and organisational resilience is also indisputable. Favourable reputation is treated as an excellent resource in the times of crisis (Coombs & Holladay, 2006). In addition, research showed that companies with a good reputation could maintain it even in the event of difficulties during a crisis (Fombrun & van Riel, 2003) as reputation protects company assets against damage caused by the crisis (Coombs & Holladay, 2006). According to Jones et al. (2000), corporate reputation protects against adverse events in a competitive environment, which can affect organisational performance. Roberts and Dowling (2002) believed that appropriate management of corporate reputation allows repairing or avoiding damage resulting from disruptive events. This means that a superior level of reputation not only helps to mitigate negative consequences but also avoid crises (Tracey & French, 2017), which in turn leads to secured results of the organisation. Therefore, the following hypothesis appears to be valid:

H3c. The higher is the corporate reputation, the greater is the influence of organisational resilience on organisational performance.

In the context of the proposed mediation model, hypotheses H3b and H3c could be summarised as one statement, namely: the better is the corporate reputation, the stronger is the influence of external support on organisational performance through organisational resilience. Fig. 2 presents the diagram illustrating the adopted research hypotheses.

Fig. 2

The hypotheses verification was based on four key variables: corporate reputation, external support, organisational resilience, and organisational performance.

Corporate reputation was measured based on the concept by Ali et al. (2019). The scale contained eight items, which were assessed based on a 5-point Likert scale (from “I strongly disagree” to “I strongly agree” with the middle point “I have no opinion”).

External support in an organisation was measured based on a 5-point Likert scale (from “I strongly disagree” to “I strongly agree” with the middle point “I have no opinion”). There were six items in this scale, referring to the range of the organisation's collaboration with and outside the industry, the intensity of networking and accessibility to external resources. The questions were phrased based on the available literature (Lee et al., 2013; Seville, 2017; McCann et al., 2009; Tengblad & Oudhuis, 2018).

The variable organisational resilience was built based on four properties assigned to system resilience: robustness, redundancy, resourcefulness and rapidity (Bruneau et al., 2003; Wicker et al., 2013). Within the four properties, four measures (one for each property) were indicated for organisational resilience. They were rated on a 5-point Likert scale (from “I strongly disagree” to “I strongly agree” with the middle point “I have no opinion”).

The Balanced Scorecard concept by Kaplan and Norton (1996) was used to build the variable organisational performance. Within four perspectives (financial performance, internal business processes, customer perspectives, and innovation and learning), ten measures were indicated for organisational performance. They were rated on a 5-point Likert scale (from well below expectations to well above expectations with the middle point being equal to what expected).

Cronbach's alpha was used to estimate the internal consistency of responses. Table 2 presents the results. The Cronbach's α was high for corporate reputation, external support, organisational resilience and organisational performance, indicating high internal reliability of the scales and measurements.

As mentioned before, the first step of the research was to build the mediation model. Three conditions must be met to establish such a model:

the independent variables must be related to the mediator,

Aiming to verify the first two conditions and hypotheses H1a, H1b, H1c, the r-Pearson's correlation analysis was performed. The results are presented in Table 3.

The obtained results showed a statistically significant, positive and high or moderate correlation between all analysed variables. It must be pointed out that this correlation is definitely the lowest (but still moderate) in the case of the relationship between external support and organisational performance. It allows for the acceptance of H1a, H1b and H1c hypotheses.

Therefore, such a conclusion enabled to verify the mediating model of organisational performance. To do that, the mediation model was built for external support as an independent variable, and organisational performance as a dependent variable. Organisational resilience was tested as the mediator in the model. The calculations were made using the Process macro for SPSS Version 3.4 by Andrew F. Hayes. To confirm the assumed relationship, it was supposed that the obtained regression model was statistically significant and the total effect was higher than the direct effect calculated for the given variables. Table 4 presents the results of the analysis.

The obtained research results showed that the built regression model with the mediator was valid and statistically significant (F(2, 245)=64.224, R2=0.347). Furthermore, organisational resilience was a statistically significant mediator of the model (p<0.001, coeff. = 0.3238, se = 0.0506). According to Table 4, the mediating effect (the indirect effect of the independent variable on the dependent variable through the mediator variable) is also statistically significant (BootLLCI = 0.099 and BootULCI = 0.222 and they are both above 0), although this is a partial mediation. To confirm it, the Sobel test was calculated (Z=5.43, p<0.001), which confirmed that organisational resilience significantly carries the influence of an independent variable to a dependent variable. The obtained model showed that organisational resilience was a partial but significant mediator of the relationship between external support and organisational performance. Therefore, hypothesis H2 can be accepted.

As a next step of the analysis, the obtained mediation model was studied in the context of corporate reputation to verify the statistical significance of it as moderator of the relationships given in the model. As the first step, to check if corporate reputation has a potential to be a moderator of the discussed relationships, the hypotheses were tested using the regression analysis with the moderator for three separate sets of independent relationships:

corporate reputation as the moderator of the relationship between external support and organisational performance,

In the next step, this variable was tested as the moderator in the previously build mediation model (as a moderator of the relationship between external support and organisational performance trough organisational resilience) to test hypotheses H3a, H3b and H3c. In both cases, the moderated regression analysis procedure was performed using the Process macro for IBM SPSS Statistics. The results of the analysis are presented in Table 5.

Based on research results, when the discussed relationships are treated separately, corporate reputation is the moderator for all of them (all obtained results were statistically significant, Table 5). However, the obtained results showed that in the proposed mediation model, corporate reputation moderated the path from external support to organisational resilience (the moderator coeff.=0.108, p=0.0222) and the path from organisational resilience to organisational performance (the moderator coeff.=0.196, p=0.0017), but not the path from external support to organisational performance (the moderator coeff.= −0.031, p =0.6068). Hence, corporate reputation is a statistically significant moderator in the case of both relationships, i.e., between external support and organisational resilience (F(3, 235)=61.897, p <0.001) and the relationship between organisational resilience and organisational performance (F(4, 234)=52.106, p <0.001). Therefore, as shown in Table 5, the obtained results are the basis for the acceptance of hypotheses H3b and H3c and the rejection of the hypothesis H3a.