Reconsidering the Reputation: Reconsidering the Reputation: Performance Relationship: Performance Relationship:

A Resource-Based ViewA Resource-Based ViewBrian Boyd

Arizona State University

Don BerghUniversity of Denver

Dave KetchenAuburn University

Journal of Management, 2010

Evolution of PaperEvolution 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

University Competition: University Competition: Pre-WWIIPre-WWII

“…“…colleges struggling to find colleges struggling to find available models and competing available models and competing on terrain that was not yet stable on terrain that was not yet stable

or structured” (Washington & or structured” (Washington & Ventresca, 2004)Ventresca, 2004)

“…“…colleges struggling to find colleges struggling to find available models and competing available models and competing on terrain that was not yet stable on terrain that was not yet stable

or structured” (Washington & or structured” (Washington & Ventresca, 2004)Ventresca, 2004)

Post-War: Geographic Post-War: Geographic Integration and StratificationIntegration and Stratification

National Institutions:Compete on Differentiation

Local Institutions:Compete on Price

Financial Times Financial Times MBA Tuition 2007:MBA Tuition 2007:

Top decile: $80,000Top decile: $80,000

Bottom decile: $37,000Bottom decile: $37,000

What Is B-School Reputation?What Is B-School Reputation?

LabelsLabels Quality Prestige

MeasuresMeasures Graduate offerings Research output Faculty DGI Department size

Rindova’s 2005 Model of Rindova’s 2005 Model of ReputationReputation

Quality

Prominence

Salaries

R2 = .11

R2 = .36

0.33*

Faculty Exp

Degree Prestige

Faculty Pubs

Media Ranking

GMAT

R2 = .69

0.03

-.01

-.51*

0.17*

0.18*

0.59*

0.13*Reputation is composed of two Reputation is composed of two separate dimensions, with separate dimensions, with unique drivers and outcomesunique drivers and outcomes

SEM: The Problem of SEM: The Problem of Equivalent ModelsEquivalent Models

SEM appealSEM appeal Concurrent test of

multiple relationships Both global and local

tests of hypotheses Global fit measures

enable comparison of competing hypotheses

Equivalent modelsEquivalent models Many configurations

can yield identical fit Rarely addressed in

published studies Completely different

patterns of covariation and causation

Henley et al, ORM 2006Henley et al, ORM 2006Replication of Stimpert & Duhaime 1997Replication of Stimpert & Duhaime 1997

IndustryProfitability

R&DExpenditures

FirmDiversification

CapitalInvestment

SBUEffectiveness

Hypothesized Hypothesized ModelModel

Henley et al, ORM 2006Henley et al, ORM 2006Replication of Stimpert & Duhaime 1997Replication of Stimpert & Duhaime 1997

IndustryProfitability

R&DExpenditures

FirmDiversification

CapitalInvestment

SBUEffectiveness

Reverse Causality Reverse Causality ModelModel

Henley et al, ORM 2006Henley et al, ORM 2006Replication of Stimpert & Duhaime 1997Replication of Stimpert & Duhaime 1997

IndustryProfitability

R&DExpenditures

FirmDiversification

CapitalInvestment

SBUEffectiveness

Covariation ModelCovariation Model

Each model has a Each model has a unique logic, but unique logic, but

identical chi-square, identical chi-square, GFI, CFI, and so onGFI, CFI, and so on

Content Analysis by Henley Content Analysis by Henley and Colleagues 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

EquivalentEquivalent models follow models follow a very specific set of a very specific set of

criteria.criteria.

Much broader range of Much broader range of alternatealternate models models

available.available.

Going From Equivalent to Alternate Models:Going From Equivalent to Alternate Models:Applying the RBV LensApplying 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’

Reconfiguring Rindova’s Reconfiguring Rindova’s ComponentsComponents

Student QualityStudent Quality

GMATGMAT

Media RankMedia Rank

Faculty PubsFaculty Pubs

Degree PrestigeDegree Prestige

Reputation

.37 (3.4)

1.0

-.94 (10.5)

.93 (11.1)

.92 (11.2)

Chi-square is non-sig

GFI is 0.97

RMSR is 0.05

Direct Comparison of Direct Comparison of Competing LogicsCompeting Logics

Quality

Prominence

Salaries

R2 = .11

R2 = .36

0.33*

Faculty Exp

Degree Prestige

Faculty Pubs

Media Ranking

GMAT

R2 = .69

0.03

-.01

-.51*

0.17*

0.18*

0.59*

0.13*Quality

GMAT

MediaRank

FacPubs

DegPrestige

Reputation

Prominence

Salaries

R2 = .79

R2 = .45

0.96(12.1)

0.66(8.2)

0.37(3.4)

-.94(10.5)

1.0

0.92(11.2)

0.93(11.1)

Faculty Exp

-.20(2.9)

0.05(0.1)

Additional ConfigurationsAdditional Configurations

Quality

GMAT

MediaRank

FacPubs

DegPrestige

Reputation

Salaries

Faculty ExpProminence

(a) Prominence as part of reputation

Quality

GMAT

MediaRank

FacPubs

DegPrestige

ReputationProminence

Salaries

Faculty Exp

(b) Direct effect on salaries

Quality

GMAT

MediaRank

FacPubs

DegPrestige

Reputation

Elite

Faculty Exp

Prominence

Salaries

(c) Prominence and salaries as common dimension

Comparison of ModelsComparison of Models The usual suspects

2

- GFI

- RMSR Adjustment for model complexity

2 /df

- AIC

- Standardized 2

Benchmarks against null models- CFI

- IFI

Comparison of ModelsComparison 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

Hypothesized ModelHypothesized ModelQuality

GMAT

MediaRank

FacPubs

DegPrestige

Reputation

Prominence

Salaries

R2 = .79

R2 = .45

0.96(12.1)

0.66(8.2)

0.37(3.4)

-.94(10.5)

1.0

0.92(11.2)

0.93(11.1)

Faculty Exp

-.20(2.9)

0.05(0.1)

ImplicationsImplications 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