Proceedings of World Business and Economics Research Conference
24 - 25 February, 2014, Rendezvous Hotel, Auckland, New Zealand, ISBN: 978-1-922069-45-0
Corporate Reputation and Value Creation: The Influential Role of
Emotions in Interactive Service Experiences
Nadia Ali Shah1
Academic and business practitioners increasingly recognize the importance of corporate
reputation for achieving business success. Despite this interest, little has been studied in
academic literature about the influencing role of emotions in enhancing or destroying
reputation of a firm. Drawing on relationship marketing and the service-dominant logic
theoretical framework, this paper discusses the affective dimension of reputation in
influencing individuals’ perceptions about a firm. It focuses on increasing interest of
practitioners on customer relationships in co-creating service experiences. This study argues
that reputation can be more usefully conceptualized based on individuals’ emotional
assessments derived from service experiences. The findings in the form of a conceptual
framework explicate four major emotions; valued, appreciated, frustrated and involved as
integral to influencing corporate reputation. The paper concludes with an overview of key
research limitations and implications.
Track: Marketing, Services Marketing
1. Introduction
Corporate reputation is of immense value for the firm2 and its customers. It is a valuable strategic
resource that provides the basis of differentiation and competence. Marketing researchers (e.g.
Fombrun & VanRiel 2004; Karmark 2013; Schultz, Hatch & Adams 2013) posit that corporate
reputation is formed by the impressions and perceptions that individuals have about a firm and
therefore, it is most closely linked to corporate branding. The corporate brand is conceptualized as a
key symbol of firms‟ culture and identity (Balmer & Gray 2003; Karmark 2013). Moreover, scholars
(e.g. Abratt 1989; Ind 1997) argue that corporate reputation and corporate brand, can both serve as
means of assessing each other‟s influence on multiple stakeholders.
The marketing literature is progressively transforming from a product-centric to customer relationshipcentric view. Scholars (e.g. Argenti & Druckenmiller 2004; Karmark 2013) believe that corporate
reputation is strengthened when customers develop strong relationships with firms, and their
expectations from the service are fulfilled repeatedly (Argenti & Druckenmiller 2004). This shift to
relational marketing has encouraged customer engagement as a lens to view customers as active
participants in services rather than passive recipients in a transaction-oriented exchange process.
This has been further emphasised in the service-dominant (S-D) logic literature. The increasing focus
of S-D logic (Vargo & Lusch 2004a; Brodie, Hollebeek, Ilic, & Juric 2011) on collaboration, interaction
and co-creation, in the service provision have brought down attention on relationships as an
engagement process bringing together individuals on a single platform to co-create value. The term
engagement is conceptualised in this paper as an emotional process that models the underlying
mechanism by which customers evaluate a firm‟s reputation.
The purpose of this research is to study corporate reputation based on emotional experiences and
expressions of customers when they engage in co-creative service experiences, while locating
consumer choice in its social context. The argument is supported by S-D logic theoretical framework,
1
Nadia Ali Shah, PhD Candidate,Department of Marketing, University of Waikato, Gate-1 Knighton Road, Private Bag
3105, Hamilton 3240, New Zealand, Phone: +647856 2889, Email: nas22@waikato.ac.nz
2
The term firm refers to service provider and/or company. These terms have been used interchangeably.
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Proceedings of World Business and Economics Research Conference
24 - 25 February, 2014, Rendezvous Hotel, Auckland, New Zealand, ISBN: 978-1-922069-45-0
which highlights interactivity and collaborative co-creative service experiences as integral to value cocreation (Vargo 2009; Brodie et al. 2011). Developing further on the emerging literature, this paper
will illustrate that emotions can mediate behavior and precede cognition during the interactive process
of value co-creation. Little has been explored on the role of emotions in the creation of value through
corporate reputation. The paper studies corporate reputation as a higher order concept which can
further be managed by corporate branding decisions (Schultz et al. 2013).
This research is expected to impart key insights for scholars and managers seeking to establish longterm relationships with their customers to support a firm‟s overall corporate reputation. Prior work has
been limited in terms of explaining the role of emotions in co-creative service experiences while
supporting corporate reputation in highly emotional contexts, and also with regard to high/low
engagement levels in the service experiences (Price, Arnold & Deibler 1995). Moreover, the previous
literature fails to provide a comprehensive representation of the concept. In the light of S-D logic
framework, this research responds directly to the marketing scholars (e.g. MSI, 2010; Barnett &
Pollock 2013; Lusch, Vargo & Tanniru 2010) call for research in this area.
This paper is structured as follows. In the first section, the relevant literature addressing corporate
reputation and service experience concepts are reviewed. This is followed by an analysis of the
nature of co-creativity and emotional connectedness between the actors (customer and the service
provider). An overview of the approach guiding the enquiry is provided in section two, followed by the
key findings proposing four prominent themes derived from empirical material analysis. The paper
concludes with an overview of research limitations and implications.
2. Literature Review
2.1. Corporate Reputation
Corporate reputation is a highly visible signal of an organization capabilities and reliability. It indicates
a value judgement about a firm‟s attributes. The importance of corporate reputation has been
acknowledged in the academic literature, it is considered as an asset of immense importance for
business success (e.g. Devine 2001) because it can influence customer buying decisions and
behaviour, tells about service quality, differentiates firms‟ services, provides credibility, attract
investments, and helps firm to achieve competitive advantage.
The term „reputation‟ suggests recurring experiences. The literal meaning of the word „reputation‟ is
derived from the Latin words „re‟ means over and over, and „putare‟ meaning calculating (Cees & van
Riel 2013, p.15). The derived word „reputation‟ means assessing the positives and negatives of a
subject repeatedly. This is a rational process that also holds an emotional component. As defined by
Fombrun (1996) reputation is „the net affective or emotional reaction good or bad, weak or strong, of
its stakeholders‟ (p. 37). Moreover, Cees and van Riel (2013) define it as “a perception about the
degree of admiration, positive feelings, and trust an individual has for another person, organization,
an industry” (p. 15). These definitions explain corporate reputation as a result of information
processing cues from personal experiences. The emphasis on relationships is also found prominent
in the corporate branding literature (e.g. Karmark 2013; Balmer & Gray 2003). During a service
experience customers consciously or unconsciously filter clues and organize them into set of
emotional impressions (Berry & Carbone 2007) which can guide cognition as perceptual processes
towards reputation (Holladay 2013).
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Proceedings of World Business and Economics Research Conference
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Marketing literature indicates that the boundaries between the concepts of corporate reputation and
corporate branding have become blurred with the development of recent literature (e.g. Schultz &
Hatch 2013). Both concepts have been defined as intangible assets affected by stakeholder
perceptions, and depend on stakeholder relationships with the firm (Balmer & Greyser 2006; Dowling
2006). From the classical conditioning perspective (Ghodeswar 2008) reputation connects to
branding through a brand‟s ability to differentiate services from competition (Karmark 2013). Hatch
and Schultz (2001) proposed that corporate branding can influence corporate reputation as it involves
the capturing and expressing a firm‟s culture, identity and strategic vision among customers and
service providers as primary stakeholders. Corporate reputation as an aggregate of stakeholder
perceptions captures the influences that image and brand have on the overall evaluation of firm
(VanRiel & Fombrun 2007). Moreover, the brand scholars (e.g. Abratt 1989; Ind 1997) have
positioned corporate reputation as a means to assess the influence of a corporate brand on multiple
stakeholders).
2.2. Relationship and Engagement as a Process
Engagement may be viewed both as an emotional state and a process. As an engaged state, it refers
to one‟s preferred/true self by exhibiting emotions such as enthusiasm, commitment and passion
towards a service (Patterson et al. 2006; Van Doorn et al. 2010). According to Bowden (2009),
engagement as a process models a mechanism by which an enduring state of loyalty may develop
among new versus repeat purchase customers of a service brand.
The conceptual roots of customer engagement can be drawn upon S-D logic (Vargo & Lusch 2004a,
2008a) literature addressing relationships and interactive experience. This theoretical lens contrasts
the transactional view of marketing, which focuses on the exchange process. Based on its 10
foundational premises (FPs), S-D logic depicts marketing relationships characterised by collaborative,
interactive, co-creative service experiences. Moreover, Varey and Ballantyne (2006) provided a
nexus between dialogical interaction and relationship marketing, and challenged the monological
communication model with dialogical interactions in services. They have further elaborated value cocreation through relating, communicating and knowing (Ballantyne & Varey 2006) as an outcome of
interactive service experiences.
2.3.
Services Experience: Co-creative Appreciation of Value
The literal meaning of the word „experience‟ is a „process‟ a „phenomenon‟ or a „change‟ (Helkkula
2011, p. 368). As defined by Pine and Gilmore (1999), „Experiences are events that engage
individuals in a personal way and derive from the individual‟s prior state of mind and being‟ (p. 12).
The perceptual interpretation of experience is explained by S-D logic by emphasising on a
phenomenological service experience (Vargo & Lusch 2008) and characterizing individually perceived
experience as subjective, case and context-specific taking place in social networks. Within these
networks every individual that interacts with a firm experiences service in his or her individual way
(Prahalad & Ramaswamy 2004).
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Every individual has a unique experience with a service (Shaw 2007). These differences in
experiencing service are due to different emotional interpretations of meanings by individuals.
Individuals pick-in and interpret signals continuously during a service encounter. In a collaborative cocreative service ecosystem these signals can be vital in developing interest, excitement, stimulation,
and energy for profound engagement (Shaw 2007). Moreover, these signals can fulfil individuals‟
value seeking objectives (Van Dooren et al. 2010) to engage in conscious acknowledgement of value
appreciation (Adler & Fagley 2005).
Emotions arise in response to experiences that are important to the fulfilment of individuals‟ needs.
Behind every emotion is a more or less enduring disposition to prefer certain states of mind (Elliot
1998). Emotions are irrevocable and inescapable judgements that implicate the self, independent of
cognition and reflect basic subjective feelings (Elliot 1998). Carnevale and Isen (1986) showed that
positive affect improves people‟s ability to integrate ideas, propose solutions and make assessments
(Kraiger et al. 1989). It is further confirmed by the „Affective choice model‟ (Mittal, 1988) which
suggests that emotion-based choice is holistic and self-focused. Emotions cue material in memory,
making access to thoughts in mind which are organized and accessible in terms of an affective tone
(Isen 1993). This affective tone precedes cognition and directs individual behaviour (Zajonc 1980).
3. Design/Methodology/Approach
For the purpose of this research the hermeneutic phenomenological approach has been employed
which aims to elucidate lived experience and to reveal meaning through a process of interpretation
(Gadamer 1989). The material was collected at two stages to uncover rich and deep insights into the
understanding of emotional influence on a firm‟s reputation. In the first stage open-ended interviews
were conducted, followed by netnography. This approach also enabled data triangulation (Coffey &
Atkinson 1999). In the first stage, a sample comprising 8 participants (in-depth interviews) were
conducted. Participants aged 28-40 were employed, 5 were male. The initial references for
participants were obtained from colleagues and later early interviewees were asked for further
referrals (i-e. snowball sampling). The interviewees were contacted by phone and emails and
scheduled interviews at a date, time and place convenient to the participants. Incentives were not
used in the conduction of research. Each interview session took approximately 35-40 minutes. The
informants were asked at the onset of the interview to describe their emotional experiences when
interacting with any self-selected brand(s) and share a service experience in a free association
manner (Myers & Newman 2007). At the netnography stage, 10 publicly available posts from online
forums were collected in which people have narrated their service experiences with any self-selected
brand.
The empirical material collected from interviews and netnography was analysed by using thematic
analysis (Thomsen et al. 1998). A thematic analysis was used because it incorporates the entire
conversation as the potential unit of analysis (Thomsen et al. 1998). For analysis, the researchers
used the notes taken during interviews, coding of the interview transcripts, netnographic text, and
comparison of themes. The analysis was done at two levels; the material was examined and
organized into cluster of meanings to generate open codes. Initially identified open codes were reexamined in further depth during the axial coding and codes with similar meanings were grouped
together to derive sub-themes and themes.
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4. Findings
Figure 1 illustrates the findings in the form of four prominent themes; valued, appreciated, involved and
frustrated. As illustrated in Figure 1, these four themes explain individuals‟ emotional expressions which
influence their perceptions about a firm. The analysis increased our understanding of the assessment
of individual service experiences in terms of individual‟s emotional expressions. Moreover, these
outcomes serve as means of assessing and defining customer‟s future relationships with the brand.
Figure 1
Thematic Coding Grid: Emotional Drivers of Corporate Reputation
Care & Trust
Valued
Reliable
Help
Focus
Secure
Pleased & Wellbeing
Appreciated
Expectations
Encouragement
Support
Happiness
Frustrated
Disappointed
Tired
Stressed
Emotional
Drivers of
Reputation
Neglected
Involved
Involved
Attentive
Concerned
Problem-solving
Connected
Figure 1: Emotional Drivers of Corporate Reputation
4.1. Valued
The theme value evolved from four sub-themes; reliable, help, focus and secure, grouped under subtheme care and trust. To be valued turned out to be the most important emotions as it sums a number
of actions and behaviours that derive customer engagement and return behaviour towards a service.
The respondents identified that they feel valued with some companies who acknowledge and make
them feel their importance rather than those that consider them as means of just another transaction.
The responses received from the interviews show that participants feel being valued and looked-after
when service providers are helpful and attentive towards them; and when the service providers appear
trustworthy and reliable. Moreover, according to respondents co-creative experiences require time and
effort and to keep them involved needs service provider extra focus and attention.
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4.1.1. Care and Trust
Care and trust evolved from the sub-themes; reliable, help, focus and secure. Trust and caring as
emotion derives well-being embedded within the experience and evokes a feeling of security and
kindness. It has been observed that trust and care can influence accumulated judgements about a firm.
According to respondents, care makes them important to the company and that they are worth of an
exceptional service. We typically find that collaboration in a caring manner make customers feel secure
and valued.
“At the time of an internet security breach, several credit card numbers were stolen from the
website and my card was among those. My bank immediately held my card and informed me, I did
not lose any money. I felt being cared and consider it a very supportive service”.
According to the analysis of material, trust is based on the belief that the promises will be delivered with
honesty, integrity and safety. According to respondents trust is the fundamental believe that the service
provider will not deceive.
“If I have a good experience I would trust them and I’ll be more confident in the future how they fulfil
my need. It is familiarity and trust that convince me going to the same service”.
From the material, we identified that this trust is gained through continuous engagement with company.
Also, sureties like warranty, membership cards, complaint and feedback systems were identified as
proper indicators of service evaluations.
4.2.
Appreciated
The theme appreciation evolved from four sub-themes; expectations, support, encouragement and
happiness. Analyses showed that for some people fulfilment of expectations can evoke happiness,
whereas for others, friendliness and customization of additional requirements matters. Furthermore,
people are more pleased with a service experience if it is important to their well-being and contribute in
making their living better.
4.2.1. Well-being
The analyses showed that any kind of satisfaction derived from service experience makes customers
believe that the company has contributed in their lives. Analyses showed that when service providers
customize any service on specific individual requirements which is beyond their prescribed service
standards, it differentiates the company from others and, enhances loyalty and customer involvement in
their services.
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“I was not really satisfied with the room condition so I went and asked them to change to another
room and allow me late checkout, they accepted it and offered me a better room with same rate”.
According to the respondents, first experiences may surprise them based on what customers have
learnt from online and peer reviews, and can serve as a good indicator of whether to maintain a
relationship with the firm.
“If a product really surprises me in a positive way I will try to buy more from that company because
I know that their products are really good but undervalued”.
4.3.
Involved
From the empirical material it was analysed that emotions such as attentive, concerned, problemsolving and connected can be states of involvement in service. Getting involved in a service experience
and making arguments on the features of service that are excess or additionally required can help in cocreating customer‟s desired value. Some participants believed that the level of involvement depends on
the intensity of the problem; if the service matter holds significant importance to individuals life than they
tend to focus, spend more time and interact to co-create something of value, instead of accepting
whatever is offered to them.
“If the matter is not serious and it’s a routine service experience then I accept whatever is offered
to me …but if it has importance in my life than I engage deep to get everything done as I want”.
The analyses showed that customers develop their interest when they are contacted by email;
receive greeting cards, promotions, text messages and brochures from a company. Company‟s actions
such as quick responses to customer complaints, feedback and offering additional information does help
maintain customer connection with the firm. However, the interview material indicated that at times
customers get irritated by receiving influx of emails, brochures and text messages.
4.3.1. Interest and Problem-Solving
Interest is a fundamental concept in service experiences. It entails making an
individual excited, to pay attention, and to be involved in some action that causes
mental and physical engagement (Shaw 2007). It was analysed that an interesting
experience can be powerful to bring the customer back to same service provider and
keep him/her engaged. It was also observed that the level of interest in a service is
very much supported by fulfillment of expectations.
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“If my expectations are met and I’m happy, then I consider it a good experience.
It improves perspectives of a company and I can recommend it to others”.
The participants referred to their experiences when they we supported, their
problems were solved and also services were customized to their requirements.
Problem solving involves continuous dialogue to reveal what is of value to each
party. Effective help and complaint management systems can help solving individual
problems. Analyses showed that continuous support can bring the element of
forgiveness and customers tend to ignore service provider‟s mistakes because of the
regular good service they receive.
“Sometimes it is very hard to shift suppliers because of the loyalty developed
through things they have helped me with...I often ignore their small mistakes
because of their other regular good services”.
4.4.
Frustrated
The process of collaborative interactive service experiences does not always result in
creation of value. Instead, at times it may lead to dissatisfaction and disengagement.
The analyses showed that poor service experiences may evoke emotions such as
disappointment, stress, and feeling neglected, bored and irritated. The actions that
could lead to such emotions vary reportedly: disrespectful behaviour, influx of emails,
waiting long, extensive requirement, complicated forms, long conversations and
negotiations. Some respondents felt the interactive, collaborative services take too
much time and may result in frustration and tiredness.
4.4.1. Neglected
Neglecting and disappointing customers tend to affect individuals‟ over-all
behaviour towards the firm. Analyses showed that this kind of behaviour not only
discourages customers to return, but also influences their overall perception
towards the firm. Over-promising and under-delivering the services, negligence,
ignorance and carelessness are the main causes that evoke frustration and
disappointment amongst customers and spread negative word of mouth.
“I went to the store to avail the warranty but the salesperson was really
disrespectful. I tried to call the chain management to complain … but that was
equally fruitless”.
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Figure 2
Conceptual framework illustrating emotional drivers and corporate reputation
Emotional
Drivers




Valued
Appreciated
Frustrated
Involved
CE Process
Emotions
Trust
Well-Being
Neglected
Involved
Corporate
Reputation
Figure 1: Conceptual Framework Illustrating Emotional Drivers and Corporate reputation
Furthermore, individual may feel disappointed due to incorrect information, extensive
brand extensions, and not living up to the service promise, which may result in loss of
customer„s trust and disengagement.
5. Conclusion and Contribution
Figure 2 illustrate the conceptual framework developed to analyse the effects of
emotions derived from services experiences on overall corporate reputation.
Accordingly, the framework proposes multidimensional analysis of the themes,
encompassing emotional elements of the psychological dimension and conditions of
the behavioural dimension for supporting reputation. Concurrently, the framework
also suggests multi-step analysis of the emotional-drivers and engagement process
as influential elements. The most significant contribution of this work revolves around
the proposed four themes: valued, frustration, appreciation and involvement,
reflecting the influence on perceptions evolving from service experiences. This
accumulation of good or bad emotions defines the reputation of a company and
determines future relationship with its customers.
The study emphasises corporate reputation as a social constructed phenomenon
evolving from interactive co-creative service experiences. From the analysis it
became evident that emotions become more integral to a firm‟s reputation when they
influence individuals‟ future behavioural intentions, expectations and return intent
towards a particular service provider. The service encounters that engage with the
emotional energies through interactive dialogue are likely to motivate consumers
towards a firm (Elliot 1998). The findings align with S-D logic‟s 10 foundational
premise: “value is phenomenological (experientially) determined by beneficiaries”
(Vargo & Lusch 2008a, p. 9). People form a preference of a service first based on
emotional response and then justify it cognitively (Zajonc 1980).
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This study further posits that, when driven by emotion, the process of engagement
is formed holistically, followed by cognitive processing for enhanced connectedness
with a firm. The analysis indicated that the intensity of engagement can be influenced
by individual‟s emotions, which in turn influences their perception towards a service
provider. It can increase repurchase intentions and decrease negative publicity.
6. Managerial Implications
The findings are expected to provide valuable insights both to marketing scholars
and practitioners. Learning customer emotions can enable service providers to
improve their service by becoming closely attuned to customers‟ desired values.
Emotional displays signal immediate feedback, and mimetic and complimentary
responses to emotional cues, and might be particularly effective in the state of
appreciation or frustration. Also, this research elucidates that managers can
effectively respond to customer-initiated engagement opportunities through
appreciative collaboration, while increasing customers‟ level of interest in the service.
The framework represents a customer perspective, to give service providers better
understanding that meeting customer expectations is the key inflection point from
where positive and negative reputations are formed (Jense et al. 2013).
However, the interactive service experiences cannot always be creative and
positive. And individuals cannot always spare time for co-creation and conversations
in the service experiences. There is a prominent element of forgiveness which
depends on the level of engagement. Analyses showed that forgiveness can allow
individuals to ignore the negative aspects of an experience and indulge in repeat
consumptions. Managers need to take initiatives to interact at the convenience of
customers to avoid frustration and annoyance.
Furthermore, the study emphasises the social construction of corporate reputation
as a concept evolving from individual perceptual and emotional assessments. The
research provides direction by which managers can better comprehend cognitive and
emotional components of reputation.
7. Limitations & Future Research
This research encourages empirical studies that characterise emotions in service
experiences and reflect the position of reputation as dynamic, subjective and socially
constructed. The research is subject to a number of limitations. First, the adoption of
a relatively small sample and qualitative research design generates a need for further
work. Specifically, large scale quantitative investigation and validation of the
proposed themes are required.
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Secondly, the respondents in the interviews and the collection of online posts were
performed based on their experiences with any self-selected firms/brands. However,
future research may wish to focus on a specific set of companies or a single brand,
and by conducting experiments, thus generating more specific insights. Hence future
validation of present findings is required.
Moreover, broader theoretical implications arising from this research include a
need for further exploration and conceptual development of each of the four identified
emotional derivers, engagement process and corporate reputation within the
emerging S-D logic lexicon. The future research questions may include: to what
extent are the present findings generalizable across brands and specific contextual
applications? Further empirical investigation of these findings is required, which may
contribute to the advancement of S-D logic theoretical perspective.
8. Acknowledgement
The author would like to thank one anonymous reviewer for his constructive
feedback in the development of this paper.
9. Funding
The author received no financial support for research authorship and/or publication
of this article.
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