The Relationships among Employee Empowerment, Corporate Repututation, and Firm Performance: Research in the Turkish Manufacturing Industry

Abstract

Purpose – The purpose of this paper is to describe and analyze the mutual relationships among an empowerment climate, psychological empowerment, corporate repututation, and firm performance. Theoretical framework – This paper builds on the literature on empowerment and corporate reputation to propose a comprehensive research model to examine how corporate repututation and firm performance are shaped by empowerment practices. Design/methodology/approach – To achieve the objective of the study, the partial least squares approach and bootstrapping re-sampling method were used to test the hypotheses. A survey was carried out to collect data from 225 employees of the manufacturing industry in Turkey. Findings – The findings support the positive impact of an empowerment climate on psychological empowerment. In addition, an empowerment climate appears to be a variable that strongly increases both corporate reputation and firm performance. Furthermore, the results reveal that perceived corporate reputation is positively associated with both financial and non-financial performance. Practical & social implications of the research – This research provides an important contribution by showing how macro-level empowerment practices such as an empowerment climate influence micro-level feelings of empowerment such as psychological empowerment and that both, in turn, are related to corporate reputation and firm performance. Originality/value – This research provides an important contribution by showing how macro-level empowerment practices such as an empowerment climate influence micro-level feelings of empowerment such as psychological empowerment and that both, in turn, are related to perceived corporate reputation and firm performance.