Corporate Reputation Review

Volume 9 Number 2

Familiarity Breeds Ambivalence Margaret E. Brooks Wayne State University, USA Scott Highhouse Bowling Green State University, USA

ABSTRACT

One goal of most corporate marketing strategies is to make stakeholders more familiar with the corporation. The implicit assumption behind these strategies is that familiarity leads to positive outcomes – particularly in the context of firm reputation. Although evidence for a positive effect of familiarity on reputation is inconclusive at best, the effect has remained part of the conventional wisdom in brand image research. This paper presents theory and research from business (eg, management, marketing, consumer research) and psychology (eg, judgment and decision making, cognitive, social, and industrial/organizational psychology), aimed at clarifying the theoretical connection between familiarity and firm reputation. We point to theoretical and empirical evidence that challenges the conventional wisdom of a positive effect of familiarity on firm reputation. We suggest that familiarity is often associated with ambivalence about organizations, and thus can be seen as both a blessing and a curse. Corporate Reputation Review (2006) 9, 105–113. doi:10.1057/palgrave.crr.1550016 KEYWORDS: corporate image; firm reputa-

tion; organizational attraction

INTRODUCTION

A basic assumption behind corporate marketing and advertising strategies is that increasing stakeholder familiarity with a firm

will enhance its reputation. According to Cable and Turban (2001), ‘…familiarity will lead to positive feelings towards the firm and will thus influence employer reputation’ (p. 125). Other theoretical models of firm reputation have also given familiarity a central role (eg, Bromley, 1993; Dowling, 1986), and social psychologists commonly refer to the ‘warm glow’ associated with things that are familiar (Zajonc, 1968). However, empirical support for a positive relation between familiarity and reputation is surprisingly thin. Fombrun and Shanley (1990) compared objective characteristics of firms with reputation ratings on the Fortune survey, and found that media exposure had a strong negative relation with reputation. Although it is tempting to attribute this finding to a tendency for media reporters to publish only negative stories about companies, the researchers found that it did not matter whether the media coverage was favorable or unfavorable. Indeed, only 13 percent of the media reports examined in their study were negative. Research in consumer behavior has found only mixed evidence for the positive effects of repeated advertising on sales (Bass and Clarke, 1972; Bass and Leone, 1983; Bogart, 1986). Although brand awareness is certainly important for establishing a product in the market (Hoyer and Brown, 1990), there is surprisingly little evidence that enhancing the familiarity of a brand has much utility (Baker, 1999; Huang et al., 2004). Research

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on employee recruitment has also shown that familiarity does little to enhance reputation, with familiarity accounting for less than 5% of the variance in firm attraction (Turban, 2001; Turban et al., 2001). A study on images of fast-food companies showed that a set of items tapping the visibility of a company (eg, ‘Everywhere I go, I see one of these restaurants) accounted for only 1% of the variance in high school students’ perceptions of the company as a good place to work (Highhouse et al., 1999). This is compared with other factors measured in the Highhouse et al. study, such as atmosphere and respectability, which (individually) accounted for approximately 25% of the variance in student perceptions. Thus, although some studies suggest a slight positive relation between familiarity and favorable perceptions of the firm, the relation is so small as to question its practical utility. This article examines the psychological basis of the conventional wisdom that familiarity positively influences reputation, and provides a summary of theory and research that calls into question this assumption. We begin by briefly reviewing research on the ‘mere exposure’ effect, commonly used as an argument for why familiarity should relate to attraction. We then examine research showing that well-known companies both enjoy advantages and suffer costs relative to their less-familiar counterparts. We provide theoretical accounts for the mixed blessing of firm familiarity, and consider how reputation measurement might better account for people’s ambivalence toward familiar corporations. MERE EXPOSURE

According to Titchener (1910), people experience a ‘glow of warmth’ and feeling of intimacy when exposed to something familiar.This is the thinking behind the wellknown ‘mere exposure’ phenomenon in social psychological research (see Bornstein, 1989, for a review).The mere exposure effect

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occurs when there is an increase in liking caused by increased familiarity with previously neutral stimuli. The typical experiment involves presenting a set of novel stimuli, such as photographs of faces, varying the frequency of exposure across the stimuli. Liking or desirability is found to increase as a function of the frequency of exposure. The mere exposure phenomenon suggests that familiarity is positive in that people have a more positive response to things that are familiar than to unfamiliar things, but it does not say much about how people react to stimuli differing in degree of familiarity. It is important to note that the stimuli used in mere exposure experiments tend to be low in prior experience and meaning to participants receiving them (eg, nonsense syllables, foreign words, Chinese ideographs). In fact, mere-exposure research has shown that it is very difficult to affect the attractiveness of even recognizable (but not highly familiar) stimuli (Zajonc, 1998). Further, the liking induced by mere exposure has been referred to as a type of misattribution effect, in which a vague feeling of familiarity is misinterpreted as liking (Smith, 1998).When people are presented with more meaningful stimuli, familiarity simply enhances the dominant response (Cacioppo and Petty, 1989). Taken together, this research suggests that corporate name recognition may be a worthwhile pursuit, but it provides little insight into potential effects of the enhanced familiarity on firm reputation. In other words, although name recognition alone may engender a ‘warm glow,’ the consequences of greater versus lesser levels of familiarity are less clear. In contrast to the mere exposure effect, recent research has found evidence for a ‘warm glow heuristic’ in which liking actually precedes feelings of familiarity (Monin, 2003). Monin observed that people rate things that they like as being more familiar than things that they dislike. This is consistent with earlier research showing that people

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perceive attractive faces as being more familiar to them than less attractive ones (Langlois et al., 1994). Preliminary data support this effect in an organizational context. Highhouse et al. (2005) conducted an experiment to look at whether attraction to well-known firms influences perceived familiarity with these firms. The authors experimentally manipulated attraction by randomly assigning companies to one of two categories: ‘best companies to work for’ or ‘worst companies to work for.’ Respondents were then asked to rate their familiarity with these companies. Results were suggestive of a warm glow heuristic in this context; companies assigned to the ‘best’ group were perceived as more familiar than those assigned to the ‘worst’ group. The observation that familiarity can both follow from and precede liking suggests that correlational research on firm familiarity and attraction cannot be interpreted in a causal fashion. FAMILIARITY AND AMBIVALENCE

Although ambivalence is often misinterpreted as confusion or neutrality, it is more accurately described as simultaneous positive and negative attitudes or emotions toward an attitude object. Ambivalence has been alternatively measured by asking people the extent to which they endorse a statement about having mixed (or strong positive and negative) feelings about an attitude object, or by soliciting positive and negative reactions to the attitude object (McGraw et al., 2003). Research suggests that people experience ambivalence in many different arenas, including organizational identification (Meyerson and Scully, 1995), attitudes toward important social policies (eg, capital punishment and abortion; Newby-Clark et al., 2002), evaluation of political candidates (eg, McGraw et al., 2003), attitudes toward people in stigmatized groups (eg, Bell and Esses, 2002; Katz, 1979; Taylor, 1998), attitudes toward work and family (Pratt and

Rosa, 2003), and attitudes toward organizations (Brooks et al., 2003). Certainly, a firm’s reputation is dependent upon a certain degree of exposure. For a firm to have a reputation, it needs to be within one’s universe of awareness. The assumption of a linear relation between familiarity and reputation, however, is another matter. Research is beginning to explore the role of ambivalence in the familiarity – reputation relationship. Specifically, greater familiarity with a company may be associated with greater ambivalence toward that company. Brooks et al. (2003) conducted a series of studies examining what happens when people are asked their opinions about very familiar companies, versus companies whose names are well-known, but are not so familiar. These studies were based on the idea that companies may have both good and bad associations in people’s minds, and that more familiar companies are likely to be associated with both more positive and more negative associations. Consider Gardberg and Fombrun’s (2002) report of the Harris survey of opinions regarding the best and worst company reputations. The authors observed that one of the most frequently nominated ‘best’ companies, Microsoft, was also one of the most frequently nominated ‘worst’ companies. Moreover, Disney, Daimler-Chrysler, Procter & Gamble, and AT&T received almost equal nominations as the best and as the worst companies. Brooks, et al. reasoned that whether companies are evaluated positively or negatively may be determined in part by how perceptions of the company are elicited. Thus, questions prompting positive associations would bring to mind more positive associations for the familiar companies than for the less familiar ones; similarly, questions prompting negative associations would bring to mind more negative associations for the familiar companies than for the less familiar ones. Results were consistent with these arguments. Figure 1 shows that most people viewed Nike as more fair and honest than Reebok, and also viewed Nike

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reconcile how companies can be simultaneously admired and despised.

100 Nike Reebok

80

HOW YOU ASK THE QUESTION…

60 40 20 0

Fair & Honest

Unfair & Dishonest

Figure 1: Percentage of people rating Nike or Reebok as more fair or honest or more unfair and dishonest.

as more unfair and dishonest than Reebok. This pattern held across a number of familiar/less-familiar company pairs (eg, Disney/Universal, Ford/Subaru). In a subsequent study, the authors used a free-response task in which people were asked to report either reasons for working for each company in a familiar/less-familiar pair, or reasons against. People were able to come up with more reasons for and more reasons against working for the more familiar companies. Studies like these suggest that, in addition to its benefits, greater familiarity has its costs. As one corporate identity consultant remarked ‘All companies do bad things, and all companies do good things…every company does things which are incredibly beautiful and also incredibly ugly’ (Bowe et al., 2000). Familiarity brings with it a large pool of available associations, some favorable and some unfavorable. Which associations rise to the surface is likely to be determined by the questions asked. For example, when Gardberg and Fombrun’s (2002) respondents were asked to nominate the most reputable companies, the favorable associations of companies like Microsoft and Procter & Gamble came to mind; when they were asked to nominate the worst companies, however, the unfavorable aspects of the same companies surfaced. In the next section, we discuss theoretical accounts for these seemingly paradoxical findings, and attempt to

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Research in decision making and cognition has shown that judgments are not always preformed based on underlying beliefs; rather, they often arise from an immediate need to form an opinion (Slovic, 1995; Wilson and Hodges, 1992). In other words, people may not have ready-made attitudes about corporations, but may construct those attitudes at the time they are requested. Companies that are more familiar are likely to be associated with more positive and negative information, and potentially more ambivalence. Ambivalence can involve having multiple strong and potentially conflicting attitudes, and it is not necessarily the case that any one of them is the true or real attitude (Meyerson and Scully, 1995). Thus, in the case of great ambivalence, the attitude that is expressed may reflect the strong positive attitude, the strong negative attitude, or a compromise attitude that is neither positive nor negative. Various aspects of the opinion-solicitation situation can influence the expressed attitude (Schwarz, 1999, 2004). Schwarz (2004) noted that our thought processes are usually accompanied by metacognitive experiences, such as how easy or difficult information it is to bring to mind. People draw on these experiences, according to Schwarz, in making judgments. For example, Schwarz et al. (1991) asked people to recall either 6 or 12 examples of their own assertive behavior, and then to rate their own assertiveness. People asked to recall 6 examples rated themselves as more assertive than did people asked to recall 12 examples. Schwarz argued that the metacognitive experience of ‘ease of accessibility’ influenced people’s self-ratings. Those in the 6-example condition had little trouble coming up with examples, whereas those in the 12-example condition struggled to find twice as many. The subjective experience of

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struggling to provide examples gave the 12-example group the feeling of being less assertive (‘I must not be assertive if I am having such a hard time coming up with examples’), even though they had more examples of their own assertiveness than did the 6-example group. With regard to the Brooks et al. (2003) research finding that more familiar companies are seen as both more admirable and more contemptible than less familiar companies, the ease of accessibility explanation is relevant as well. For example, people comparing Nike and Reebok in terms of good corporate citizenship can bring to mind more favorable actions associated with Nike than with Reebok. This leads them to believe that Nike is a better citizen than Reebok. People comparing Nike and Reebok in terms of poor corporate citizenship, however, can also bring to mind more unfavorable actions associated with Nike than with Reebok. This leads them to believe that Nike is a worse citizen then Reebok. In both cases, the metacognitive experience of ease of recall leads to the belief that Nike is more extreme than Reebok on the dimension. Another aspect of the opinion-solicitation situation that can affect the expressed attitude is the compatibility principle. Research on compatibility suggests that whether the question triggers positive associations or negative ones will determine which are retrieved from memory (Slovic et al., 1990). According to the compatibility principle, the extent to which we use an attitude in our judgments depends on its compatibility with the required response. That is, when trying to make judgments, we focus on attributes that help us to formulate a response. This suggests that we pay more attention to the positive aspects of an alternative when selecting something, and to the negative aspects of an alternative when rejecting something. As an example of compatibility in choice, Shafir (1993) gave participants a choice between two vacation destinations. One des-

tination had plenty of sunshine and gorgeous beaches, but very cold water and strong winds. The other option was average in terms of both weather and beach conditions. When asked to choose an alternative, twothirds chose the first destination.When asked which they would be more likely to cancel, however, nearly half chose to cancel that same destination. According to Shafir (1993), because the first destination was described as having both positive and negative features, it was more compatible with both choosing and rejecting. Similar research has shown that people rate China and Japan as being both more similar and more dissimilar than Paraguay and Equador (Tversky, 1977), find a parent to be both more deserving and less deserving of child custody than a spouse (Shafir, 1993), see Ronald Reagan as both more moral and more immoral than John Major (Downs and Shafir, 1999), and see Ford Motor Co. as both more admirable and more contemptible than Subaru (Brooks et al., 2003). Research on how the way we ask the questions affects the answers has much to contribute to the assessment of corporate reputation. When people experience more ambivalence, more positive and negative information is available. Having many positive and negative attitudes increases the potential that the attitude expressed may not accurately and completely represent impressions of the company. Thus, in the case of very familiar companies, the way we ask about reputation may be especially important. Asking positive questions may make the company appear very positive, while asking negative questions may make the company appear very negative. MIXED FEELINGS

The notion that people can simultaneously hold incompatible impressions of things is beginning to be taken seriously by attitude theorists as well (eg, Priester and Petty, 2001, Thompson et al., 1995). It has been argued

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that overall evaluations reflect a combination of positive and negative expressions of both cognitive and affective sub-components of attitudes (Zanna and Rempel, 1988). Thus, one can experience affective ambivalence (torn feelings), cognitive ambivalence (mixed beliefs), or a combination of affective/ cognitive ambivalence (eg, when your head disagrees with your heart, Thompson et al., 1995). According to Tesser (1978): ‘there is not a single attitude toward an object but, rather, any number of attitudes depending on the number of schemas available for thinking about the object’ (pp. 297–298, italics in original). Wilson and Hodges (1992) similarly suggested that people often hold a large, conflicting set of cognitions and emotions on any given topic, and that the attitude they express often depends on the subset of data to which they attend. Research on impressions of firms would do well to consider the notion of multiple attitudes. A person’s conflicting feelings about companies can arise from considering different dimensions when evaluating the company. For example, a person may admire Wal-Mart’s financial performance, but feel bad about the evaporation of small-town America. Research on emotional and cognitive determinants of organizational attraction (Devendorf et al., 2005) showed that firms could be differentiated on both cognitive adjectives (eg, adaptable, efficient, successful) and affective adjectives (eg, cheerful, friendly, happy). That these analytical and emotional dimensions can be distinguished, and that they both relate to attraction, suggests the potential for companies to be both admired and despised. The idea that multiple impressions can exist about the same firm also suggests the need to take a multidimensional view of impressions toward firms. Researchers often use the terms firm reputation and corporate image interchangeably (eg, Gatewood et al., 1993). We agree with Balmer (2001), however, that firm reputation should be seen

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as an enduring perception of an organization, and that corporate image should be seen as a more immediate mental perception. The situation seems analogous to research on corporate culture and organizational climate, which has settled upon a notion of culture as something that is deeply-ingrained and sustained in an organization, and climate as something that is on the surface and malleable. Importantly, climate researchers no longer talk about one organizational climate, but multiple climates for various things. For example, researchers have studied climates for creativity (Cummings, 1965), safety (Zohar, 1980) and customer service (Schneider et al., 2000). Like climate researchers, we believe that researchers of impressions of firms should talk about reputation as something that is general, sustained, and agreed upon across stakeholder groups. Corporate image, on the other hand, should be talked about as something more specific, transient, and varying across stakeholder groups; we should talk about corporate image as something. Wellknown firms, such as Microsoft or Wal-Mart, can be evaluated on the degree to which they have a positive image as a producer of goods or services, as a socially responsible citizen, as a provider of value to shareholders, or as a choice employer. The advantage of separating reputation from image is that it allows people to recognize that they may have conflicting images of a corporation (eg, excellent brand image but poor social image), yet may maintain an overall reputation perception. Indeed, it would be interesting to examine whether reputation ratings depend upon whether image perceptions are elicited before or after reputation perceptions. We might expect more accurate reputation measurements when they are conducted after the solicitation of individual image perceptions. CONCLUSION

In their Handbook of Psychology review of research on corporate recruitment and

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attraction to organizations, Rynes and Cable (2003) concluded that ‘(studies) seem to suggest that the most feasible route for improving corporate recruitment image may be to increase applicant familiarity’ (p. 58).We have argued that research on the positive effects of corporate familiarity is far from conclusive, and that existing evidence seems to suggest that familiarity is likely to lead to ambivalence. The same firms commonly appear on both most-admired lists and leastadmired lists. People are able to recall both more good attributes and more bad attributes of more familiar companies, as compared to less familiar companies. One important implication of this research is that measurement of corporate reputation must consider how the questions affect the answers. Gardberg and Fombrun (2002) represents one of the few examples of asking people to nominate both best and worst reputations (see also Brooks et al., 2003). As a result, they found that many companies appeared quite frequently on both lists. In practice, however, most ratings of ‘best’ companies do not consider that they may also be (simultaneously) getting a list of ‘worst’ companies. Perhaps, future surveys should consider prompting respondents to recognize conflicting attitudes, and consequently make more informed judgments. If surveys lead us to formulate an opinion for the purpose of responding, and use a positive response mode, the resulting data may overestimate people’s attraction to firms, and provide overly optimistic estimates of firm reputation. Future research could explore whether a simple intervention designed to induce respondents to consider both positive and negative components of their attitudes toward organizations might yield more complete and thus more accurate evaluations. We also addressed ambivalent attitudes, and the idea that people are more likely to hold strong positive and negative attitudes about companies with which they are more familiar. Ambivalence amplification theory

(Katz and Glass, 1979) suggests that we have ambivalence (ie, strong positive and negative attitudes) toward members of stigmatized groups. Whether we respond in a manner consistent with our positive or negative attitude depends on our interaction with the member of the stigmatized group. When we are presented with behavior that is inconsistent with one of our ambivalent attitudes, we respond by attempting to deny that attitude. For example, when faced with behavior that is inconsistent with our negative attitude, we respond in a way that is exceptionally positive. This is consistent with research on compatibility that suggests that positive response modes trigger positive associations. The amplification component, however, would suggest that not only would a positive response mode lead to positive evaluation, it would lead to amplification of the positive attitude. Future research should explore whether ambivalence-amplification theory can extend to people or attitude objects that are not stigmatized.1 Additionally, we have argued for a clear distinction between reputation and image, such that image is measured at a more micro level. Instead of talking about their corporate image per se, we should talk about their brand image, social image, profit image, or employer image. Research on corporate reputation should test assumptions about stability across – not just time and reference group – different modes of question presentation. We suggest a generalizability theory approach (see DeShon, 2002) to measuring firm reputation. This approach allows the researcher to specify which sources of variance should be expected (eg, variance across companies) and which should not (eg, variance across stakeholder groups). In sum, we agree with Fombrun and Van Riel (2004) that although successful companies are visible companies, ‘visibility is a double-edged sword’ (p. 129). Firms spend large amounts of money on marketing and advertising budgets designed in part to make

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the public more familiar with the company. Certainly, it is necessary to establish firm awareness in order to have a widespread reputation. This paper suggests, however, that increasing familiarity beyond name recognition may have some unintended consequences. NOTE 1

We would like to thank an anonymous reviewer for this insight.

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Corporate Reputation Review

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