Exploring Stakeholder Salience Perspective of Firm Reputation: Evidence From Malaysia

Abstract

This paper aims to explore the components of a firm reputation based on public information disclosure and its relationship with the stakeholder salience model. The firm reputation components are analysed using content analysis of the firm's annual report. The study collects data on the firm reputation components from 200 annual reports of Malaysian public listed companies over a period of 4 years (2016)(2017)(2018)(2019). The results of the study found that there are seven (7) components that can be used to reflect on the firm reputational aspects as disclosed in the firm's annual report. The components include performance, product and service quality, innovation, workplace, governance, citizenship/CSR, and leadership. The findings also reveal three highest components which are product and service quality, performance, and workplace, are supported by the stakeholder salience theory. Our analysis provides evidence that power, legitimacy, and urgency become crucial attributes in determining the key stakeholders of the firms (customers, employees, and shareholders) when the firms have different types of stakeholders. Operatively, our evidence can help regulators, investors and researchers to better understand firm reputational components as per information disclosed by the firms, especially for the firms operating in developing and emerging markets. Further, this study is among the earliest that provide the interrelation between firm reputational dimension and stakeholder salience.