Social axioms as antecedents of corporate reputation in South African banking

Abstract

Reputation is an important customer choice criterion in banking, a sector characterised by intangible services and limited opportunity for pre-purchase evaluation. It has been shown that while companies may communicate their reputation in a particular way, responses to reputation stimuli are not homogeneous, resulting in calls in the literature to understand sources of variation in customer responses. This study investigated whether an individual’s social axioms, that is, an individual’s general beliefs about the world were such a source of individual difference and influenced corporate reputation and behavioural intention among middle-high income South African banking customers. Conceptualising corporate reputation as customer perceptions (beliefs and attitude) led to adoption of the reasoned action approach as the study’s theoretical basis. Each of the social axioms dimensions, namely, fate control, religiosity, reward for application, social complexity and social cynicism, was hypothesised to influence customers’ beliefs about their bank and behavioural intention. Following a deductive approach and adopting a positivistic paradigm, quantitative data was collected from 636 middle-high income customers of the top five South African retail banks using an online questionnaire. The conceptual model was tested using partial least squares structural equation modelling. The study’s results confirmed that social axioms are a source of individual difference, can explain variances in customers’ beliefs, and are therefore antecedents of corporate reputation. Reward for application has the strongest relationship with customers’ beliefs while the relationship between social cynicism and beliefs was statistically insignificant. Effects of all social axioms dimensions apart from social cynicism were completely mediated in series by beliefs and attitude. Contributions to corporate reputation scholarship include definition of the construct as a collective of beliefs and attitude and expansion of the set of antecedents to beliefs within the reasoned action framework beyond the traditional personality and demographic factors. In practice the findings endorse the view that corporate reputation is to an extent beyond a company’s control and is in part controlled by stakeholders. As a result, it is suggested that bank marketing executives and reputation practitioners consider including social axioms in customer segmentation models to ensure that their offerings resonate with customers’ general beliefs about the world.