The Effects of Financial Crisis on the Organizational Reputation of Banks: An Empirical Analysis of Newspaper Articles

The recent financial crisis has triggered an intense debate about the role of banks in society, presumably changing the criteria used in the evaluation of organizations. Against this backdrop, we investigate the changing role of banks’ organizational features in shaping different dimensions of banks...

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Bibliographic Details
Published in:Business & society 2020-11, Vol.59 (8), p.1519-1553
Main Authors: Englert, Mario R., Koch, Christopher, Wüstemann, Jens
Format: Article
Language:English
Subjects:
Banking
Economic crisis
Organizational change
Organizational effectiveness
Organizational research
Reputations
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Summary:The recent financial crisis has triggered an intense debate about the role of banks in society, presumably changing the criteria used in the evaluation of organizations. Against this backdrop, we investigate the changing role of banks’ organizational features in shaping different dimensions of banks’ organizational reputation. Using the media as an important evaluator, we measure the reputational dimension of visibility based on the frequency of newspaper articles and the reputational dimension of favorability based on the sentiment of newspaper articles. Drawing on social judgment research for developing our hypotheses, we expect that organizational features such as financial performance and familiarity become more important determinants of organizational reputation in times of crisis. Our results support this expectation, suggesting stronger effects of these organizational features on the visibility and favorability of banks during a crisis. These findings provide novel empirical evidence on how the importance of drivers of organizational reputation changes in times of crisis and highlight areas for managerial attention.
ISSN:0007-6503
1552-4205
DOI:10.1177/0007650318816512