Categorization of organizational reputation and subordinate organizations' global funding outcome: A higher education perspective

Abstract

Reputation is critical for building relationships with business customers in the global marketplace. However, in structurally connected organization configurations, the literature focuses mainly on one of the functional unit's reputations (either subordinate or superordinate organization), leaving out the interplay of reputation among various units in the organization. Drawing on identity and categorization theories, we develop a framework to examine the effects of brand reputation at both levels. Our study context is higher education, where business schools (subordinate) operate as autonomous entities globally yet are dependent on universities (superordinate) for policy decisions. We specify a random effects model on a 10-year panel dataset of 193 business schools to account for unobserved heterogeneity, potential selection bias, and endogeneity of reputation. Our findings suggest that brand reputation attributes at the subordinate and superordinate levels both individually and synergistically affect subordinate funding outcomes (i.e., business-school endowment). Furthermore, subordinate-level resource-utilization signals, such as diversification strategies and top executives' backgrounds, and superordinate-level policy signals, such as organization ownership and inclusivity, inform donor decisions and moderate the reputation–funding relationship. Our study suggests that administrators and managers should consider donor identity salience in marketing efforts.