Building student loyalty in higher education: the role of corporate reputation

Corporate reputation

Reputation is a multidisciplinary concept, so there are several definitions with different perspectives in the literature (Eberl & Schwaiger, 2005; Maden et al., 2012). Several branches of knowledge, such as economics, marketing, management, psychology and sociology, have studied the concept (Ponzi et al., 2011). Schwaiger (2004) argues that there are different angles to view corporate reputation: corporate brand, representation of the firm’s goodwill, corporate identity, the barrier to market entry for potential competitors, and a signal of the organisation’s actions and future behaviour. Therefore, the concept is multifaceted and incorporates interrelated characteristics such as credibility, reliability and responsibility (Carmeli & Cohen, 2001; Morrissey, 2012; Puncheva-Michelotti & Michelotti, 2010).

Nguyen and LeBlanc (2001) consider credibility as part of corporate reputation, which may result from the contrast between its promises and actions. Corporate reputation is built over time, resulting from accumulated judgements and opinions from different stakeholders (Nguyen & LeBlanc, 2001).

Reputation in an HEI can be defined simply as ‘the collective representation maintained over time by the multiple constituents (internal and external) of a university’ (Alessandri et al., 2006). The definition of reputation as presented by Alessandri et al. (2006) provides a holistic and dynamic framework that aligns well with the central theme of the article, which is the role of corporate reputation in building student loyalty in higher education. It captures the multifaceted nature of reputation and its impact on various constituents over time. Sontaite and Bakanauskas (2011) argue that corporate reputation results from a subjective and collective assessment of the institution by the stakeholders based on its performance, potential, brand value, communication and past behaviour. Also, in line with the same authors, they claim that managing a university’s reputation is challenging when its constituent units, such as faculties and schools, have a distinct reputation among stakeholders. On the other hand, the institution may have a reputation locally, while internationally, it does not have the same recognition (Suomi et al., 2014).

A definition that summarises the various perspectives presented on the concept describes corporate reputation as ‘the collective representation of the past and present actions and results of the organisation, which describes its ability to obtain different results from different stakeholders’ (Martin de Castro et al., 2006).

Sources of corporate reputation

Shamma (2012) presents a list of possible sources of corporate reputation: the communication and behaviour of workers, people’s experiences with the organisation, the organisation’s communications, the media’s interpretation of the organisation, word-of-mouth, competition and rumours.

This concept is formed based on interactions and transactions of stakeholders with the organisation (Eberl & Schwaiger, 2005). Reputation also results from the organisation’s activity in the past, but with an impact on the present behaviour of stakeholders concerning the organisation (Petrokaite & Stravinskiene, 2013). For this reason, reputation takes years to build, which is why it is one of the most challenging resources to accumulate for any organisation (Martin de Castro et al., 2006). However, it is fragile because any action that harms a specific group can jeopardise the accumulated organisation’s prestige or credibility over time (Nguyen & LeBlanc, 2001).

Corporate reputation links to stakeholder theory (Feldman et al., 2014) so the perception of corporate reputation varies depending on the stakeholder group (Petrokaite & Stravinskiene, 2013). According to Helm (2007), the different groups of stakeholders are customers, investors, workers, suppliers and society. The student is an essential stakeholder of an HEI, and his family has an important role, as it influences his choices and preferences (Suomi, 2014).

Corporate reputation measurement

Corporate reputation is a difficult concept to measure, and there is no consensus between academics and practitioners on the subject (Sontaite & Bakanauskas, 2011). Possession of characteristics such as causal ambiguity, social complexity, and slow accumulation associated with the organisational history makes this concept have a high level of intangibility which is why it is a complex construct to measure (Martin de Castro et al., 2006). However, Sontaite and Bakanauskas (2011) sustain that the indicators related to the creation of good or bad attitudes of stakeholders concerning the organisation are the basis for reputation measurement, and such indicators must be weighted differently depending on the importance of each stakeholder.

Caruana and Chircop (2000) present four components that constitute the reputation construct: affection or emotional appeal, image, level of awareness about the organisation, the result of its behaviour and past performance, and the experiences and interactions of stakeholders with the organisation. For Helm (2007), quality of products and services, emotional appeal, vision and leadership, results of financial activity, social responsibility and working conditions constitute the dimensions of corporate reputation.

Telci and Kantur (2014) developed and validated a scale to measure the reputation of universities. The scale consists of 20 indicators divided into three dimensions: academic competence, social attractiveness and responsible management. The academic competence construct reflects the general educational capacity or quality of the university and also the quality of services provided by the institution. In comparison, social attractiveness refers to items such as the innovative capacity of the university among side its physical conditions. Finally, the dimension of responsible management regards the responsibilities of the university management to its stakeholders (Telci & Kantur, 2014). The present study adopted this scale to measure the reputation of HEIs because of the context similarity. The methodological procedure suggested to measure the reputation of HEIs is the use of questionnaires applied to stakeholders.

Student loyalty

Student loyalty is the student’s intention to recommend some type of relationship with the institution to third parties, as well as their satisfaction with the choice of the institution or course they attend and the predisposition to relate to the institution in the future (Østergaard & Kristensen, 2005). The student’s tendency to choose the same institution over another to satisfy a particular need is also related to this concept (Temizer & Turkyilmaz, 2012).

Student loyalty is affected by a good university image and student satisfaction (Temizer & Turkyilmaz, 2012). Student retention also depends on other factors such as student’s academic abilities (Pantages & Creedon, 1978 in Kara & Deshields, 2004), their adjustment and social integration into the educational institution (Gerdes & Mallinckrodt, 1994; Mallinckrodt, 1988 in Kara & Deshields, 2004) and the expectations formed before enrolling at the institution (Baker, McNeil and Sirky, 1985 in Kara & Deshields, 2004). It is important to note that the student’s motivation to obtain an academic degree and commitment to the institution are also important factors for student retention (Kara & Deshields, 2004).

Student loyalty plays a crucial role in the success of HEIs, as loyalty not only perpetuates the institutions’ potential revenues but also causes positive synergies through a positive recommendation about the institution (Shahsavar & Sudzina, 2017). The increase in the student retention rate positively affects the life cycle of tuition fees, and it generates synergies in the low-cost recruitment of new students through word-of-mouth recommendations (Kara & Deshields, 2004). Additionally, the probability of retaining a student at a university increases if he/she stays for an extended period in that institution because of the high transaction costs for the eventual move to a competing institution (Kara & Deshields, 2004).

Student loyalty measurement

Student loyalty has attached to its measurement the following indicators: the intention to choose the same university, the recommendation to others and the intention to leave the university when possible (Temizer & Turkyilmaz, 2012). Blackmore et al. (2006) in Douglas, Mcclelland, & Davies (2008) present the following indicators of student loyalty: the student’s predisposition to continue their studies at the institution, the level and frequency of use of the university’s services and the intention of recommending the institution or course to friends, neighbours or family members translate the concept of student loyalty.

Taecharungroj (2014) uses a scale that groups these three categories into five items, namely: saying positive things about the university to other people; intention to recommend the university to anyone seeking advice; encouraging friends and family to consider the university and to have a close relationship with it; consider the institution as the first choice when choosing a university to study, and the intention of relating to the university in the future. The present research adopts this last scale to measure student loyalty.

Relationship between corporate reputation and student loyalty

A favourable corporate image and reputation influence the attitudes of the organisation’s stakeholders (Iwu-Egwuonwu, 2011). Among other antecedents, such as student satisfaction, the reputation of the university is one of the key drivers of student loyalty (Alves & Raposo, 2010; Helgesen & Nesset, 2007; Kaushal & Ali, 2020; Nesset & Helgesen, 2009) Because of these arguments the study proposes to test the following hypothesis:

University reputation for this research contains three main dimensions: academic competence, social attractiveness and responsible management (Telci & Kantur, 2014). For this reason, theoretically, it is plausible to establish the link between these dimensions and student loyalty.

Prior studies have shown that the quality of education an institution provides (Daud et al., 2020; Ismanova, 2019; Lin & Tsai, 2008; Nesset & Helgesen, 2009; Yang et al., 2008), the trustworthiness of the university (Carvalho & de Oliveira Mota, 2010; Ismanova, 2019; Rojas-Méndez et al., 2009), a commitment to academic excellence (Vianden & Barlow, 2014), and graduates’ success (Quintal & Phau, 2016) are crucial ingredients of student loyalty towards the university. Those factors are all items of academic competence in an HEI (Telci & Kantur, 2014). Thus, the following hypothesis arises:

The quality of the facilities (Nesset & Helgesen, 2009; Thomas, 2011; Vianden & Barlow, 2014) such as having a good campus, quality of libraries, among others, and the overall experience the student (Yu & Kim, 2008) has in an HEI affects student loyalty positively. That’sThat’sThat’s why the more social attractive an institution is, the more loyalty it gets from its students (Telci & Kantur, 2014). This argument suggests the following hypothesis:

The reputation of the institution’s top management is one of the critical elements of HEIs reputation management. This factor helps to establish good relationships with both internal and external stakeholders, reinforcing their confidence in the university’s administration (Zyryanova et al., 2020), which in turn has a positive impact on student loyalty (Carvalho & de Oliveira Mota, 2010; Telci & Kantur, 2014). Thus, the author formulates the following hypothesis:

Strategically, public HEIs increasingly mirror private sector practices (Buckland, 2009). However, Khan et al. (2018) have compared the management practices of private and public universities and found that, although both use similar managerial practices, there are differences in some aspects, such as leadership style and management experience. This view about the existence of different settings between public and private institutions may create different perceptions about their reputations and, consequently, relationships with their stakeholders. For this reason, it is reasonable using the type of institution, whether public or private, as the control variable on the behaviour of both the dependent and independent variables.

Student perceptions and assessments about their HEI may vary across public and private institutions (Mahmoud & Grigoriou, 2017) due to switching costs (Maden et al., 2012), cost of education (Goh et al., 2017), perceived value (Goh et al., 2017; Taecharungroj, 2014) and overall student experience (Yu & Kim, 2008). Because this study defines university reputation and student loyalty based on student perceptions and evaluations of their institutions, therefore, it is reasonable to expect that:

See Figure 1 for the conceptual model of the study.

Figure 1. Conceptual model of the study.

Social characterisation and academic profile of respondents

The sample has a slightly higher male representation (50.5%), with the most expressive age group being 21 years old or less with 41%, slightly above the 22-30 age group, representing 40.8%. Regarding educational establishments, 82% of respondents belong to public institutions. Universities represent 88.4%, followed by Higher Institutes with 10.4%. The first three years concentrate a higher proportion of students (62.8%). See Table 1.

Reliability of constructs

The original authors tested already the indicators of the scales of the main constructs of the present study and presented a high index of reliability measured through Cronbach’s Alpha. However, to reinforce the validity of the scales in the Mozambican context, the author tested the reliability of the constructs, and the results showed that all constructs have good reliability. See Table 2.

Hypotheses testing

H1: Corporate reputation has a significant relationship with student loyalty.

The results show that the independent variables (academic ability, social attractiveness and responsible management) explain in 45% (adjusted R²) the variation of the dependent variable (Student Loyalty). Therefore, the model manages to explain almost half of the dependent variable, leaving a significant part of 55% explained by other variables. The hypothesis of R² being zero being statistically significant (F(3.391)=109,627; p<0.001) is rejected.

The independent variables (Academic competence, social attractiveness and responsible management) show a statistically significant correlation (p<0.00) with the independent variable (Student loyalty). Correlations range from moderate for Responsible management (0.442) and Social attractiveness (0.588) to high for Academic competence (0.63). The coefficient table shows the equation of the estimated line which is: Student Loyalty=-0.187+0.622 Academic competence+0.388 Social attractiveness+0.032 Responsible management.

H2: Academic competence has a significant relationship with student loyalty.

H3: Social attractiveness has a significant relationship with student loyalty.

Academic competence (p<0.001) and social attractiveness (p<0.001) have both a high significance in the dependent variable. The results confirmed the hypotheses positively.

H4: Responsible management has a significant relationship with student loyalty

The variable responsible management, in addition to having a shallow impact on the dependent variable (H4), that is, in the model, not an explanatory determinant of student loyalty, and this relationship is not statistically significant (p=0.629). Thus, H4 was not verified.

H5: There is a significant difference in the level of corporate reputation between public and private educational institutions.

In public (3.71) and private (3.74) institutions, corporate reputation is higher than the centre of the scale, slightly higher in private institutions. The difference in means is not statistically significant (H5) (t(393) =-0.327; p=0.326). Students from private institutions believe their institutions have a slightly higher reputation. A slightly higher percentage (38.2%) believe that the reputation level of their institutions is high. In comparison, only 37% of students from public higher education institutions say the same. The hypothesis H5 was not validated.

H6: There is a significant difference in the level of student loyalty between public and private educational institutions.

As for the level of student loyalty, the results show that in both public and private institutions, student loyalty is higher at the centre of the scale, being slightly higher in public institutions. The difference in means is statistically significant (H6) (t(87793)=2,373; p=0.04). Students from public institutions showed more loyalty towards their institutions. A higher percentage (48%) of students from public institutions claimed to be very loyal. In contrast, the percentage of students from private institutions said the same was 36.8%. The hypothesis was confirmed (Table 3).

Conclusions

The study concluded that corporate reputation positively affects student loyalty. Corporate reputation can explain 45% (adjusted R²) of the variance of the dependent variable, student loyalty. The relationship between the two variables is significant. The dimensions of corporate reputation with the most impact are academic competence and social attractiveness. The results showed that responsible management has a residual and non-significant impact on student loyalty.

The results also allow us to conclude that both corporate reputation and student loyalty have a moderate level and above the average of the scale in the respondents’ statements, both for public and private institutions. As these variables are positively correlated, it is expected that they behave accordingly.

The analyses show no significant differences between public and private institutions regarding institutional reputation. However, as for student loyalty, the results attest to a statistically significant difference between the nature of the institutions, pointing to a greater intensity of loyalty in public educational institutions.

Theoretical and managerial implications

This study contributes to the literature by providing empirical evidence of a different context in which university reputations play a key role in fostering student loyalty, both from private and public HEIs. The research results showed that strengthening the activities of the HEIs’ core business, which is the improvement of their academic competence, proves to be a logical path to the success of the institutions, as this dimension is the one that reveals the most significant impact on student loyalty.

The study’s practical implications are that it gives a framework for HEIs administrators, both from public and private institutions, to manage the factors of university reputation that better affect student loyalty. Given that academic competence and social attractiveness were identified as the dimensions of corporate reputation with the most impact on student loyalty, Mozambican HEIs should prioritize efforts to enhance these aspects. Thus, to retain their students, Mozambican HEIs must focus on continuous improvement of academic programs, faculty quality, and educational resources to strengthen academic competence. They must also Invest in creating a vibrant and inclusive campus culture, fostering social interactions, and providing essential resources to enhance social attractiveness. These actions will significantly impact student loyalty, which is a fundamental element of the success of higher education institutions in an increasingly competitive environment. Specifically, Mozambican HEIs managers have empirical evidence from scientific research that could back up their decisions to allocate resources to improve their reputation and ultimately, affecting, positively student loyalty.

The lack of significance for responsible management might indicate that the specific cultural, economic, or social context in Mozambique places less emphasis on this dimension when students evaluate their loyalty to an institution. However, institutions should not completely disregard it. It may be an area where improvements could lead to a more positive impact on student loyalty. Continuous monitoring, feedback, and adjustments in responsible management practices could be explored to assess their potential influence on student loyalty over time.

Limitations and direction for future research

The present study has some limitations that are worth considering. First, the sample composition can be improved as, for example, there is a lower representation of respondents from private sector institutions with 17.2%, while the representation in the population is 39.8%. The other underrepresented groups are the post-graduate students (10.7%) and students enrolled in Academies, Colleges and Superior Institutes (11.7%). Thus, for future research, to generalise the results with more confidence, it is recommended to increase the proportion of representatives of those groups, as it might yield richer insights.

Secondly, bearing in mind that the responsible management construct was the one that presented the lowest degree of reliability of Cronbach’s Alpha (0.71), it is recommended that for future research, a deeper exploration of the construct with the inclusion of other indicators that reflect and adapt to the local context. Previous research (Zyryanova et al., 2020) pointed out that trust in managerial capabilities and responsibilities is crucial to engaging relationships with key stakeholders. Thus, a better understanding of the constructs and how they fit into the model is worth considering. Future research could also delve deeper into understanding why responsible management does not significantly impact student loyalty in the Mozambican context. This could involve qualitative research methods, interviews, or surveys exploring students' perceptions and attitudes towards responsible management practices.

Finally, the model can only explain 45% (adjusted R²) of the variance of the dependent variable. The results showed no significant differences in reputation between public and private universities. While regarding student loyalty, the result presented significant differences between both groups. This finding may suggest that there are other variables intervening in the model. Thus, to better understand the mechanisms of the relationship between university reputation on student loyalty, other variables such as service quality (Teeroovengadum et al., 2019), student satisfaction (Alves & Raposo, 2006), image (Alves & Raposo, 2006; Quintal & Phau, 2016; Teeroovengadum et al., 2019), trust (Bergamo et al., 2012; Bowden, 2011; Goh et al., 2017; Ismanova, 2019; Rasoolimanesh et al., 2021), switching costs (Maden et al., 2012) and student commitment (Ismanova, 2019; Rojas-Médez et al., 2009; Snijders et al., 2020), should be included in the model to explain the variance on the dependent variable. Further studies may include mediators in the model or even change the role of university reputation in the model to explain its relationship with student loyalty.