The Effect of Institutionalization at Universities on Institutional Reputation
Abstract
Institutionalization process is one of the most elaborated organizational theory models recenlty. Although institutionalization process at universities is crucial, a limited number of studies have been conducted in the literature. In order to provide contribution to the existing literature, determining which of the dimensions of institutionalization would improve university institutional reputation is critical. According to the literature, institutionalization can be considered in four dimensions such as formalization, professionalization, consistency and cultural power. This study, which is based on the social exchange theory, aims to examine the effect of institutionalization dimensions on institutional reputation in the context of universities. For this reason, the study was conducted with explanatory research method. The data collection method of the study was survey. The perceptions of a total of 395 academic and administrative staff from a public university were assessed. The results revealed that the institutionalization dimensions of the university, respectively consistency, formalization, professionalization and cultural power had a positive and significant effect on the university’s institutional reputation. As a consequence, the significance of institutionalization in determining institutional reputation was observed, and suggestions for future studies were proposed.
Keywords: Institutionalization, institutional reputation, university, social exchange theory
Introduction
Institutional reputation refers to the perception that will emerge related to the past activities and future activities of all stakeholders of an institution (Gezmen, 2014). In the literature, there are different variables that affect institutional reputation have been identified, such as service quality (Gün, 2019), corporate social responsibility communication (Gümüş & Öksüz, 2009), corporate social responsibility (Güleryüz, 2020; Karatepe & Ozan, 2017; Karayel & Yalman, 2016), quality-focused management (Işılay Üçok, 2008), brand value (İpçioğlu & Arpa, 2020), and organizational culture (Bayram, 2011). It is also important to analyse the effect of institutionalization on institutional reputation (Gün, 2019; Şen, 2013).
Institutionalization could be defined as one of the most elaborated organizational theory models nowadays. Institutionalization refers to a process that consists of routine behaviours repeated and reflects the same meaning across the organization (Zucker, 1983). Universities are one of the most important institutions that are challanged by fierce change. A university seeks for truth with freedom of speech and thought through its students (Çınar, 2008).
Universities may achieve national and international success through having both an institutional structure and an institutional reputation. Although the topic of institutionalization at universities is crucial, a limited number of studies have been conducted up to now. Based on this, it is important to find the relationship between the dimensions of institutionalization and university institutional reputation in order to provide a unique contribution to the literature.
This study, which is based on the social exchange theory, aims to examine the effect of institutionalization dimensions on institutional reputation in the context of universities. In this study, institutionalization is considered in four dimensions: formalization, professionalization, consistency and cultural power.
Theoretical Framework
Institutionalization
According to Özen (2013), institutions are socially built behavioural patterns and rule systems that bring a meaning and stability to social behaviour. Parkhe (2003) accepts institutions as social entities in which adopted, widely recognized practices, technologies, or rules are relatively valid and in which they are securely positioned. According to Meyer and Rowan (1977), institutionalization is the rationalized form of obligations, rules, and social processes that arise as a consequence of social thoughts and activities. Institutionalization could be defined as the process of repeating a behavioural pattern and attaining a status similar to rule, independent of human (Özen, 2013).
In universities, institutionalization is a system of rules and shared values established to allow the university to perform its own legal and functional tasks while competing with other universities on a national and international arena (Paksoy et al., 2014). Although there are different classifications about the dimensions of institutionalization in the literature, the following classification namely “formalization, professionalization, cultural power and consistency” (Şen, 2013, p. 36) is widely recognized.
Formalization is the definition of organizational structure, activities, and relationships through the use of rules, procedures, and contracts, as well as the documentation of the duties, roles, authorities and responsibilities of the employees (Apaydın, 2009). It can be claimed that formalization is the most commonly highlighted institutionalization dimension at the national and international levels. It is also noticed that formalization and institutionalization are used interchangeably (Zencir, 2013). Formalization limits who will do what by reducing the uncertainty through the knowledge of roles by those working in the institution. This facilitates the coordination within the organization and increases institutionalization. Formalization strengthens employees’ commitment to the organization (Narmambetova et al., 2016). Formalization is important since the transparent and open relations in the business promote the trust in the organization (Scott, 1987).
Professionalization can be defined as the employment of professionals in management, the development of the organizational climate in a way that fosters the characteristics of professional staff (such as autonomy, continuous education), and organizational relationships with professional and sectoral institutions in the industry (Kostova, 1999). Professionalization in the organizations is related to professionals’ maintaining their authority and being autonomous. Empowering professionals with autonomy increases their commitment to the organization and allows them to integrate into the organization (Cohen & Kol, 2004).
Cultural power refers to the level of acceptance of corporate culture and its widespread sharing inside the institution (Apaydın, 2007). Corporate culture refers to facts that are shared by a certain group, are shown to be the right way of thinking, and have been proven to be valid by themselves (Schein, 2004). What makes every organization an “institution” is its philosophical values, namely culture. A well-established strong culture that guides people’s behaviours is regarded as a critical component in the institutionalization of an organization (Akdoğan, 2000). Organizational culture is the result of shared values, understandings, and attitudes among an organization’s members (Chang & Lin, 2007).
Consistency is the capacity of institutions to respond similarly to similar circumstances, through keeping promises, and achieving harmony between the organization’s vision, mission, strategy, and actions. More variability is expected to cause less consistency (Apaydın, 2009). According to DiMaggio and Powell (1983), the efforts of organizations operating in the same environment to adapt to one other will result in resemblance. Organizational legitimacy grows as consistency grows, and accordingly, organizations become institutionalized (Jaworski, 1988). Consistency is not only displaying consistent behaviours towards internal stakeholders within the organization, but also towards the external stakeholders. Due to the consistency that the organization will display, the trust of the stakeholders will be earned and rational relations with the stakeholders will be established (Dando & Swift, 2003).
Institutional Reputation
Institutional reputation could be defined as the features that show the possible situation of an institution, the behaviours practiced in a certain circumstance, a mobility that provides a sustainable competitive advantage to its owners, or the relations that the institution establishes with all of its stakeholders (Fombrun et al., 2000). Institutional reputation is the stakeholders’ and public’s perception of an institution’s products, services, businesses, strategies, and expectations in comparison to those of its competitors (Fombrun & Shanley, 1990).
Institutional reputation is typically the evaluation by all stakeholders of what the institution is, whether it is properly managed, if it accomplishes its responsibilities, whether it informs its stakeholders, and whether it meets the stakeholders’ expectations (Cretu & Brodie, 2007). Institutional reputation is the evaluation of the institution by its stakeholders for its influence and knowledge and is an indicator of the superior competence that has been proven over the years in the eyes of its stakeholders (Deephouse, 2000).
Reputation is the source of competitive advantage that companies earn and the collective images of a company’s evolving performance consistency (Abdullah & Abdul Aziz, 2013). Organizational reputation can be defined as a collective system of subjective beliefs among members of a social group (Bromley, 2000).
By analysing different definitions of institutional reputation, Barnett et al. (2006) clearly distinguished the concept of institutional reputation from the concepts of corporate identity, institutional reputation capital, and corporate image. Corporate Reputation is observers’ collective judgments of a corporation based on assessments of the financial, social, and environmental impacts attributed to the corporation over time.
A university’s reputation can be defined as collective representations that the university’ s multiple constituents –various internal and external constituents, including the media –hold of the university over time (Alessandri et al., 2006).
According to Gotsi and Wilson (2001), institutional reputation is the evaluation of an institution by all of its stakeholders over a certain time period. This evaluation is based on the direct experiences of stakeholders with the organization, the means of communication and symbols that convey information about the organization’s activities, or comparisons with the activities of other competitors.
Institutional reputation is an important issue as it affects student satisfaction (Işık, 2020), organizational citizenship behaviour (Bayar, 2018; Bican, 2020; Çekmecelioğlu & Dinçel, 2013) growth and financial performance (Bican, 2020; Göker et al., 2017), organizational resources (Aydemir, 2008), public relations studies (Uzunoğlu & Öksüz, 2008), stakeholder loyalty (Akgöz & Solmaz, 2010) and stakeholder relations (Özcan & Solmaz, 2019).
Relationships Between Variables
Blau’s (1964) social exchange theory may be a theoretical basis that can explain the effect of perception level of institutionalization in universities on institutional reputation, since it has the power to explain the relationships between perception, attitude and behaviour (Aydın, 2017; Turunç & Turgut, 2017).
When examining the studies on institutionalization at universities, Baptista et al. (2019) analysed the institutionalization processes of interdisciplinary centres in Latin American Universities. It was stated that the three Latin American universities concentrate on efforts to create institutional venues for interdisciplinary research. Moore and Ward (2010) interviewed 20 faculty members from 15 universities in the USA and analysed the effect of society during the institutionalization process of universities. It has been stated that establishing more relationships with society would have a favourable impact on institutionalization and faculty involvement in society-supported studies should be fostered.
Benneworth et al. (2015) studied the effect of the third mission (social role) of a university towards external stakeholders on the institutionalization process at a university in Sweden. It was noted that there were difficulties between internal and external stakeholders and different mechanisms should be employed to assess the effects of the third missions on the institutionalization of the university. Folch and Ion (2009) analysed corporate culture in state universities in Spain, both at the university and department levels. Suggestions for corporate culture, business dynamics, and professionalization were made in the study, which was analysed in the context of two models.
Joo and Halx (2012) analysed the institutionalization of performance-based pay systems in Korean national universities. Korean national universities are compared and discussed in the context of isomorphism using the performance-based pay systems form that is utilized in higher education in the USA. Heras-Colàs et al. (2017) examined the institutionalization of service-learning at Spanish universities. It was concluded that most of Spanish universities were still in the very early stage in the institutionalization of service learning.
Aström (2008) examined the institutionalization of library and information science (LIS) research in the Nordic countries. The paper, underlined on formalizing a discipline, analysed the social organization of LIS in Nordic Countries, focusing on the institutional environment, research studies, and the relationships between LIS and academia. Santoro and Gopalakrishnan (2000) focused on the institutionalization of knowledge transfer activities for the university and industry cooperation projects. The study at the research centres of 21 universities in cooperation with 189 companies in the USA revealed that knowledge transfer activities were facilitated under the following conditions: When industrial enterprises have more mechanical structures, they adopt a direction-oriented and steady culture, and they depend more on their research centre partners.
Paksoy et al. (2014) conducted a study on the administrative staff working at the university in order to demonstrate the condition of the institutionalization process in a newly established university in Turkey. As a consequence, the perceptions about the institutionalization process of the university and the views on the application were reached. When reviewing the studies on corporate reputation in universities, Steiner et al. (2013) designed a multidimensional model about university identity, reputation and image. This model functions as an analytical tool for scientists and administrative managers in strategic studies of the reputation, image and identity of the university. It also explains the complex relationships between the concepts.
Miotto et al. (2020) conducted the study with 509 professors in business administration departments from 47 Spanish universities. It was concluded that there was a significant and positive correlation between the reputation of a university and its legitimacy. Chapleo (2004) examined the understanding and attitudes of and remarks from university top administrators (rector, vice-rector, dean) on reputation and brand management. In the UK, reputation and branding have emerged as important issues in higher education. Christensen and Gornitzka (2017) conducted a comparative analysis among twenty universities in four Scandinavian countries. The new universities showed a lower performance than the old universities; nonetheless, it was concluded that they could struggle more than the old universities to portray a cohesive, charismatic, and distinctive image.
Finch et al. (2013) investigated the reputation qualities of three different Canadian higher education institutions in their study. They came to the conclusion that three different higher education institutions had different market reputation qualities, and that linking an institution’s brand to a category affected the development of the beliefs and attitudes of the stakeholders towards the institution. Qazi et al. (2021) aimed to determine the variables affecting the reputation of a university in Pakistan, as well as the degree of student satisfaction influencing the commitment of higher education students. Consequently, it was put forth that those social contributions, research & development and university service quality all have a significant impact on university reputation and student satisfaction.
Colyvas (2007) analysed the early institutionalization of technology transfer in the life sciences at Stanford University in this study. As a consequence, the ambiguity of the important categories and the flexibility of policies provided insight into the early stages of institutionalization, as they are transformed into institutional routines. It was stated that today’s established outcomes were actually the product of a number of exceptionally good practices. There are relatively few empirical studies in the literature that examine the correlation between institutionalization and institutional reputation, which is a dimension of corporate performance. Gün (2019) examined the correlation between institutionalization, corporate reputation, and service quality in the hospitals. According to the findings, positive correlations were found between the formalization, professionalization, cultural power and consistency sub-dimensions of institutionalization, and corporate reputation.
Şen (2013) examined the correlations between institutionalization, corporate governance and business performance in companies registered in Istanbul Chamber of Commerce. According to the results, institutionalization, which comprises the dimensions of formalization, professionalization, cultural power, and consistency, came up with a positive effect on business performance. Öğüt (2019) observed that institutionalization had a positive effect on business performance as a whole. It was also revealed that the professionalism dimension had a positive effect on financial performance, while the consistency and transparency dimensions had no effect. Additionally, the professionalism and transparency dimensions of institutionalization had a positive effect on non-financial performance, while the consistency dimension had no effect.
Taking these theoretical foundations and empirical studies into account, the following hypotheses was developed:
Hypothesis 1: Institutionalization affects institutional reputation positively.
Hypothesis 1a: Formalization affects institutional reputation positively.
Hypothesis 1b: Professionalization affects institutional reputation positively.
Hypothesis 1c: Cultural power affects institutional reputation positively.
Hypothesis 1d: Consistency affects institutional reputation positively.
Research Methods
The Purpose and Scope of The Research
This study aims to reveal the effect of the institutionalization dimensions on institutional reputation. The population of the research consisted of a total of 1262 personnel, of whom 881 were academic and 381 administrative staff. The sampling of the research comprises totally 395 personnel (academic: 257; administrative staff: 138) in Kars Kafkas University, Turkey, the public university in higher education sector. It can be said that the sample represents the population (Saruhan & Özdemirci, 2016). The data were collected by convenience sampling method.
The Type Of The Research And Scales Used
The type of research is explanatory research based on cause-and-effect relation. Data was collected with questionnaire method between January and March 2022. The scale items were developed by the authors to be specific to universities, using different studies (Apaydın, 2007; Bozbayındır, 2014; Hacımirzaoğlu, 2009; Şen, 2013). As it is showed in Table 1, the institutionalization scale consist of total 29 items, 7 for formalization, 7 for professionalization, 7 for consistency and 8 for cultural power. The scale of corporate reputation has 7 items. The data collected for the research was analysed by SPSS program. Research hypothesis was tested by regression analysis. A 5-point Likert scale was used to assess the scales.
Findings
Demographic Features
From 395 research participants, 127 participants (32,2%) are women and 268 participants (67,8%) are men. According to the results, 257 participants (65,1%) are academic and 138 participants (34,9%) are administrative staff. Also, 136 participants (34,4%) have extra administrative roles and 259 participants (65,6%) do not have administrative roles. 110 participants (27,8%) are at the age of 35 and under, 149 participants (37,7%) are between the age of 36-45, and 136 participants (34,5%) are at the age of 45 and over. Regarding the levels of education, 34 participants (8,6%) have foundation degree, 97 participants (24,5%) have bachelor’s degree, 67 participants (17,0 %) have master’s of science degree, 197 participants (49,9%) have a Ph.D. degree. 28 participants (10,5%) are full professor, 55 participants (21,5%) are associate professor, 75 participants (29,3%) are assistant professor, 51 participants (19,9%) are lecturers and 48 participants (18,8%) are research assistants.
Validity and Reliability
Based on the expert opinions face validity is used and some questions are revised. Factor analysis has been carried out for validity. Cronbach’s Alpha internal consistency coefficients are calculated for reliability. Besides, one item from the formalization dimension, one item from the professionalization dimension, and three items from the cultural power dimension were eliminated.
As it is showed in Table 2, for the variables of the related sample, it can be said that scales are valid and reliable (Nunnally, 1978).
Correlation Analysis
Since the data were normally distributed, Pearson correlation analysis has been conducted to test the correlation between variables. As it is showed in Table 3, between all variables, there are medium level, positive oriented correlations at 0,01 significance level. The highest correlation has occurred at ,826 between consistency and professionalization. There is a moderate positive correlation between formalization and professionalization (.586; p<0.01), between formalization and consistency (.629; p<0.01), between formalization and cultural power (.543; p<0.01) and formalization and institutional reputation (.608; p<0.01). There is a moderate positive correlation between professionalization and cultural power (.656; p<0.01) and between professionalization and institutional reputation (.669; p<0.01). There is a moderate positive correlation between consistency and cultural power (.685; p<0.01), between consistency and institutional reputation (.728; p<0.01). There is a moderately significant positive correlation between cultural power and institutional reputation (.590; p<0.01).
Regression Analysis
Regression analysis has been conducted to test research hypothesis. Table 4 shows the effect of the dimensions of institutionalization on institutional reputation. The findings revealed that there is a positive and significant effect of formalization (.214; p<0.01), professionalization (.138; p<0.01), consistency (.409; p<0.01) and cultural power (.103; p<0.01) on institutional reputation. The degree of explanation is 58.1%. Therefore, hypotheses was completely supported.
Conclusion
In this study, the effect of institutionalization dimensions on corporate reputation has been examined on academics and administrative staff in Kars Kafkas University. Accordingly, it has been revealed that all dimensions of institutionalization have a positive effect on corporate reputation. Consistency, formalization, professionalization and corporate culture have the highest impact on corporate reputation, respectively.
As mentioned by Bahar (2019), one of the most important reasons for the establishment of this significant effect may be the institutionalization process of institutions is critical in the construction of reputation. The conclusions related to institutionalization show similarities with some prior studies.
There is a limited research in the literature that examines the relationship between institutionalization and corporate reputation. Similar findings were reached by Gün (2019)’s work which was conducted in hospitals. A positive correlation was also observed between institutionalization and institutional performance in the study by Şen (2013) and Öğüt (2019).
This study contributes to literature by revealing the importance of specialization for professionalization in an institution, establishing rules and procedures for formalization, creating a professional understanding via a shared corporate culture, and ensuring consistency in activities, indicating that institutional reputation could even spring up. The study was conducted in only one university in Turkey as a limitation, therefore further research may be conducted in different industries and in different cultures. Also a future study with a comparative analysis between state and foundation universities will contribute a lot to the existing literature.
:The following recommendations may be put forward according to the results of the study. Corporate administrators may be recommended to recruit and promote employees who will embrace the core values of the organization such as strategic goals, core values, mission and the vision. Also, employees who could internalize the organizational identity and culture are expected to contribute to the reputation of the organization. It can be asserted that institutions could survive with their employees through completing the institutionalization process and attaining reputation. Managers and leaders may be expected to establish institutions where organizational and individual objectives are clear and consistent decisions are made with a formalized structure by creating a supportive corporate culture.
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Çetin, M., Yıldız, S., & İyigün, N. Ö. (2022). The Effect of Institutionalization at Universities on Institutional Reputation. In E. N. Degirmenci (Ed.), New Frontiers for Management and Strategy in the Post-Pandemic Era, vol 130. European Proceedings of Social and Behavioural Sciences (pp. 52-65). European Publisher. https://doi.org/10.15405/epsbs.2022.12.02.5