Do Social Interaction Mechanisms Affect University Reputation? Evidence from the UK Higher Education Sector

Since 2012, the UK higher education (HE) sector has seen changes in market- and community-based cultures within the HE environment (Ntim et al., 2017). On the one hand, the promotion of a market-based culture implies that higher education institutions (HEIs) not only face increased competition among providers but also ‘compete’ for students (National Audit Office (NAO), 2017).1 In this more competitive environment, HEI rankings have gained greater importance (Schantz et al., 2021), reinforcing the perception of institutions as ‘best in class’ (Lourenço et al., 2014) and as a means to recognize and reward teaching excellence and/or research productivity (Brink, 2018). On the other hand, HEIs’ reliance on competitive strategies is in conflict with the shift in their community-based culture, which has placed a new emphasis on ‘operational transformation’ towards sustainable development (SD) (Leal Filho et al., 2018). This transformation has drawn attention to the accountability of HEIs’ sustainability performance (Clifford and Petrescu, 2012).

Previous research has used a descriptive approach and methods like case studies, field research, archival research, questionnaires, and surveys to look at SD within the HE sector (e.g., Lozano et al., 2015; Williams et al., 2017). Some studies have also proposed tools for assessing and monitoring the SD performance of HEIs (for an overview, see Amaral et al., 2023). However, there is little theoretically informed empirical literature on how the achievements of HEIs in delivering SD contributions gain external legitimacy and recognition (Schmidt and Gunther, 2016).

Considering this context, this paper characterizes the changes in HE as shifts in institutional logics (Ezzamel et al., 2007).2 Credible ‘signalling’ through ‘objective and professional benchmarks assessed by neutral parties’ (Robinson et al., 2011, p. 495) has become vital for HEIs both in the market and sustainability domains. In this context, HEIs require a set of social interactions, with sensemaking at the forefront, aimed at legitimizing new institutional logics and differentiating themselves from other institutions (e.g., Locke et al., 2008) while striving to achieve the Sustainable Development Goals (SDGs) (Godemann et al., 2014).

We investigate this interaction between adopting new institutional logics and stakeholder engagement for SD within UK HEIs. Specifically, we investigate whether stakeholders appreciate the social interactions related to SD in HEIs, including decision-making, sensemaking, and collective mobilization, and the effects of ‘involving stakeholders in a two-way communication process, defined as an ongoing iterative process of sensegiving and sensemaking’ (Morsing and Schultz, 2006, p. 331).

We focus on a period during which UK HEIs have broadened the involvement of stakeholders in SD communication processes. In particular, we use HEIs’ positions in the Guardian newspaper's environmental and ethical performance ratings for the People & Planet University League (PPUL) (Bawden, 2015) as a measure of environmental and ethical reputation. The PPUL is the sole student-led, comprehensive, and independent ranking of public UK HE providers based on their environmental and social responsibility. An increasing number of UK policy institutes (e.g., Higher Education Policy Institute (HEPI) (Turnbull, 2018), experts (e.g., Carbon Trust (CT), EcoCampus) (CT, 2014), and business partners (e.g., NfPSynergy, the Co-operative) have referenced the PPUL as an indicator of ‘good reputation’ for HEIs’ SD performance.

During the initial phase of PPUL for 2014 and 2015, HEIs were invited to update and complete individual online surveys covering SD topics. Subsequently, PPUL sent Official Freedom of Information (OFI) requests to the HEIs and emailed the provisional scorecard to them after the survey completion deadline. PPUL also allowed a two-week appeal process for the assessed HEIs to review their provisional scores. However, since 2016, PPUL has compiled rankings from up-to-date information publicly available on university websites, data from HESA's Estates Management Record (EMR), and input from other independent external verification agencies. The participatory data collection approach used by PPUL for the years 2014 and 2015 (Bawden, 2015) is in contrast to the observatory data collection approach adopted in later years (PPUL, 2023). The earlier approach provides an excellent opportunity to assess the effects of a ‘stakeholder involvement’ communication strategy for SD (Morsing and Schultz, 2006), hence we use PPUL data for 2014 and 2015.

Utilising a unique dataset encompassing 148 public UK HEIs, we conduct rank-ordered probit-style regressions to investigate to what extent HEIs’ reputation around SD is driven by research, education, the management of their operations, and the disclosure of their activities. Our findings align with the institutional logics metatheory. The results indicate that decision-making concerning SD should amalgamate intellectual activism with educational approaches, leading to an enhanced reputation. We assert that HEIs’ social responsibility encompasses the effective management and reporting of their own ‘operational’ activities, performance, and societal, economic, and environmental impacts. This underscores the importance of developing a ‘stakeholder-oriented’ ‘sensemaking model’ (PricewaterhouseCoopers (PwC), 2018). In particular, our findings suggest that a more extensive and profound sensemaking process by HEIs for SD exerts a significantly positive influence on the scrutiny, interpretation, and evaluation of UK HEIs’ sustainable actions. This, in turn, amplifies the reputation of HEIs beyond the impact of any alternative social mechanisms.

Our main contribution to the literature is to provide first empirical evidence on the relationship between HEIs’ responsiveness to SD and critical organizational outcomes. We introduce a theoretical foundation that explores the potential relationship between disclosure and reputational benefits within the HE context. We build upon the theory of institutional logics, a framework extensively employed in research on the drivers of change in accountability discourses within the accounting literature (Ezzamel et al., 2007).

Interestingly, while there have been numerous national and international initiatives and declarations for HEIs to lead the cultural shift required to address all SDGs (for an overview, see Lozano et al., 2013), ‘these declarations often lack requirements for reporting or other accountability mechanisms’ (Godemann et al., 2014, p. 224). This study is the first to define and introduce a comprehensive set of keywords as manifest indicators with significant relevance for SD and SDGs, not only within the HE context but also in the non-profit sector. Our in-depth analysis of the extent and nature of sustainability information disclosed in universities’ annual reports over time adds to the existing literature on SD in HEIs. It furnishes contemporary evidence concerning the voluntary reporting of sustainability in the HE setting (e.g., Lozano et al., 2015), with a particular focus on the UK. Additionally, we offer insights into enhancing HEIs’ annual reporting through various coexisting methods. These insights underscore the importance of transparency in the external reporting of HEIs, which is seen as a fundamental requirement for the effectiveness of the HE (Schmidt and Gunther, 2016). Similarly, we contribute to the existing literature on reputation-building within the HE by enhancing our comprehension of the ‘evaluative logics’ and signals stakeholders use to bestow reputation (Philippe and Durand, 2011). Furthermore, we add to the ongoing discussion regarding the validity and consequences of rankings in the HE (Hosier and Hoolash, 2019).

STUDY CONTEXT AND HYPOTHESES

We empirically investigate the impact of responsible HEI practices on institutional reputation. There is currently little theoretical development on how community can influence key performance indicators within HEIs, particularly reputation. To address this gap, we employ the institutional logics metatheory, which adopts a pluralist-oriented perspective (Van Gestel and Hillebrand, 2011). An institutional field is observed within and across a network of interconnected institutional orders, each characterized by distinct symbols and practices that influence organizational behaviour (Thornton et al., 2012). The rules of conduct within the realm of competition (a limited perspective of the market) as a cultural system (e.g., Frølich et al., 2013) differ from those within the domain of public policy (a limited perspective of regulation) (e.g., Ezzamel et al., 2007) and those of the community (e.g., O'Mahony and Lakhani, 2011). Shifts in logics, therefore, accompany institutional change (Suddaby and Greenwood, 2005).

When considering UK HE, the significant changes implemented in and after 2012 have introduced a competitive aspect (for a discussion, see Ntim et al., 2017), such as increased tuition fees, removing the cap on student numbers (Ntim et al., 2017), and, more recently, the referendum on EU membership (Brink, 2018). There has also been a significant shift in UK HE public policy on SD (Higher Education Funding Council in England (HEFCE), 2014). This policy shift has implications for capital allocation to HEIs, directly linking it to sustainable capital investment and physical infrastructure plans, as well as plans to verify the reduction and reporting of HEIs' carbon emissions (see HEFCE, 2014). Furthermore, HEIs are expected to lead adopting sustainable practices that can ultimately contribute to the nation's economic and social well-being. This pressure has prompted a change in the community logic of HEIs (e.g., Leal Filho et al., 2018; Schantz et al., 2021).

To measure reputation, we rely on areas HEIs’ stakeholders have been using as key performance indicators and as a methodical base for evaluating institutional changes and engaging in decision-making. Specifically, rankings of universities have increasingly become a prominent reflection of aggregate institutional performance (see Hosier and Hoolash, 2019). By focusing on the ‘corporatized’ HE model, rankings of HEIs present ‘indicators of prestige’ (Locke et al., 2008, p. 53) that have confirmed the reputation of HEIs and stimulated a growing influence on their prospects. As Schnietz and Epstein (2005, p. 329) suggest, a reputation for sustainability ‘may facilitate complex, long-term stakeholder management, which, in turn, should enhance a firm's ability to outperform its competitors, either by increasing revenues or reducing costs’. Consequently, responsible practices within HEIs can not only contribute to the public welfare but also become a source of sustained competitive advantage in terms of reputation (see Davis and Farrell, 2016).

Hence, we contend that HEIs use social interactions to reproduce, alter, and configure identity and practice to create lasting value, differentiate themselves from other institutions (Locke et al., 2008), and deliver the SDGs (Godemann et al., 2014) amidst shifts in institutional logics. The HEIs’ social interactions include three interrelated mechanisms: decision-making, sensemaking, and collective mobilization (Thornton et al., 2012). In identifying these mechanisms, we provide accounts of how the UK HEIs’ social interactions enlist the (re)organized SD efforts as legitimate, engage stakeholders, and build a reputation.

On one level, Thornton et al. (2012, p. 133) identify ‘[the focus of decision-making] on the processes by which attention is directed to problems, and how problems are matched with solutions in decision situations’. A key mechanism for HEIs in this context is knowledge generation and dissemination. Hence, knowledge for SD (hereafter, KSD) can be regarded as the legitimate province of HEIs (Suchman, 1995). Prior studies focused on examining SD adoption and diffusion into HEIs’ research themes (for an overview, see Williams et al., 2017) and curricula (e.g., Lambrechts et al., 2013). HEIs worldwide have sought to implement research for SD (RSD) by having an SD institute or research centre, providing SD research funding, and linking the natural and social sciences (Lozano et al., 2015). HEIs have fostered education for SD (ESD) by integrating SD courses in some programs, schools, and faculties and by offering an optional SD course (Wu et al., 2010).

The existing research offers critical insights into HEIs’ efforts to develop a virtuous circle that links research and teaching to the SDGs (e.g., Cullen, 2020). To our knowledge, there has been no study of HEIs that empirically tests to what extent these efforts affect HEIs’ reputation (Williams, 2014). Therefore, we analyze whether the HEIs’ decision to embed ethics, reasonability, and sustainability into academic research and educational programs impacts the HEIs’ reputation.

On the one hand, RSD and ESD revive the primacy of ethics and morality, advance socially responsible behaviours, and engage stakeholders in the HEI discourse (Roos, 2017). SDGs should be emphasized as a decision-making framework for guiding the HEIs’ not-for-profit business model while enhancing institutional competitiveness (Cullen, 2020). The culture of HEIs, thus, should be compatible with creating a shared sustainable value that allows for gaining, extending, and maintaining legitimate cognitive norms and income sources (Cullen, 2020).

On the other hand, the strong business case for leading a sustainable agenda represents the ‘instrumental’ logic used to define the HEI–society relationship (Hesselbarth and Schaltegger, 2014). Hence, HEIs’ overall contributions to KSD might not achieve ‘[the] interconnectedness and synergies among economic, environmental, social, and cross-cutting themes’ (Lozano, 2010, p. 643). Additionally, HEIs’ slow adoption of KSD and lagging response to radical SD change can present ‘a taken-for-granted’ legitimate image to secure funding and generate teaching, research, and knowledge exchange incomes from salient stakeholder(s) who prioritize sustainability knowledge (Wu et al., 2010). In this view, KSD alone is not sufficient to create a sustainable competitive advantage without a ‘translation metaphor’ that makes and gives meaning to decision-making for SD knowledge (Weber and Glynnr, 2006). Therefore, we hypothesize:

Thornton et al. (2012, p. 96) define sensemaking as ‘ongoing retrospective processes that rationalise organisational behaviour', helping to resolve ambiguity in ways that enable activity to occur. Based on this, as Suddaby and Greenwood (2005, pp. 39–40) explain, ‘[communication] or the art of persuasion seeks to identify genres or recurrent patterns of interests, goals, and shared assumptions that become embedded in persuasive texts’ (see also Cornelissen et al., 2007; Dupin and Wezel, 2023). Skilled use of communication could initiate, facilitate, and direct shifts in forms of institutional logics (Mills et al., 2023). Specifically, communication is central to induced change due to its situational focus on re-conceptualizing change efforts to stakeholders (Plotnikof and Mumby, 2023) and its dynamic relationship with organizational practices (Mills et al., 2023). Thus, ‘the use of language … persuades constituencies of the desirability and appropriateness of institutional deviance [and] reshapes dominant ideologies within an organisational field’ (Suddaby and Greenwood, 2005, p. 37). In this regard, communication strategies are a sensemaking device that legitimizes the comprehensibility of a change through connecting alternative and contested logics to broader cultural understandings.

In effect, institutional logics are abstractions in which legitimacy is openly debatable (Thornton et al., 2012). Organizations seek to protect (or enhance) past legitimacy accomplishments they have already acquired by developing ‘a defensive stockpile of supportive beliefs, attitudes, and accounts’ (Suchman, 1995, p. 595). Indeed, ‘organisations that … lack acceptable legitimated accounts of their activities … are more vulnerable to claims that they are negligent, irrational, or unnecessary’ (Meyer and Rowan, 1991, p. 50, cited in Suchman, 1995, p. 575). The organizational character is often transmitted through ‘channels of communication’ to influence stakeholders’ perceptions (Hooghiemstra, 2000). Voluntary disclosures are viewed as a central element of legitimacy theory (see Ntim et al., 2017). To be perceived favourably by others, organizations use voluntary CSR reporting to protect or enhance their reputations (Hooghiemstra, 2000).

Given the current global and national changes, it is not surprising to find that an increasing number of HEIs have incorporated sustainability into their operations and reporting as an influential part of their competitive strategies (Lozano, 2011). In the absence of monitoring outputs directly (Modell and Wiesel, 2008), organizational audiences rely on signals to inform their assessments of organizational legitimacy (Willems et al., 2016). For the social acceptance of HEI to emphasize reputation among the sector, adherence to social norms and expectations co-exist in most real-world settings as ‘multidimensional’ phenomena consisting of progressive and interconnected, yet different, constructs (Lind et al., 2022). In such a context, voluntary sustainability reporting, which signals an institution's contribution to SD and informs continuous improvement across the HE, can serve as a sensemaking instrument that aims at managing HEIs’ image and legitimizing audience relationships.

Only recently have researchers explored SD in HEIs (see Amaral et al., 2020). Interestingly, however, the responsiveness of the HE to SD pressures is an under-researched area (e.g., Cooper et al., 2014; Egan, 2014). The impacts of compliance with the duty of accountability to public transparency, sustainable responsibility, and stakeholder engagement on HEIs are still unknown (Godemann et al., 2014). The quantifiable reputational effects of such disclosures remain undefined in the literature on the HE sector, both in the UK and elsewhere. This research gap may partly exist because HEIs are not accountable to shareholders or driven by profit. Overall, there is little prior evidence that suggests a specific direction of the association between HEIs reporting for SD and reputations for environmental and ethical responsibility. Hence, we hypothesize:

The debate surrounding catalyzing either the HEIs’ knowledge of SD or reporting for SD allows for observing a collective mobilization for SD and its related impacts on HEIs’ reputation (e.g., Godemann et al., 2014). Thornton et al. (2012, p. 133) regard collective mobilization as ‘a set of mechanisms by which [an organization] generates shared commitments and energy to contest or promote particular aspects of organisational life’ (see also Rao et al., 2003; Schneiberg and Lounsbury, 2008). Here, the theory of public trust argues that ‘trust can be built if, for example, the actions and public communication are congruent, if the organisation speaks with one voice, or if the organisation acts transparently in public and is adaptive to external demands’ (Schultz and Wehmeier, 2010, p. 19).

Maciel and Fischer (2020), for example, conclude that emerging US firms drive new markets by mobilizing for collective action that converts resources into market-driving power (i.e., economic and political initiatives) in ways that increase their overall competitiveness and benefit these firms as a whole. Additionally, Mak and Tse (2022) find that collective action of civil servants goes hand in hand with mass or interpersonal communications to confirm their role in promoting social change when a social movement threatens institutional legitimacy and engenders efficacy. Therefore, behaving in a socially responsible manner (i.e., decision-making) and translating these manners into substantive ritualized justifications or understandings (i.e., sensemaking) represent an HEI's collective mobilization towards SD. Such mobilization offers a more subtle tool for trust-building and, hence, binds the HEI to a higher reputable status than HEIs, which are divergent regarding actions and communications. Taken together, we hypothesize that:

RESEARCH DESIGN AND DATA

EMPIRICAL FINDINGS AND DISCUSSION

CONCLUSION

Over the past 10 years, extensive national and international initiatives have shaped the HE sector's role in addressing various key sustainability concerns. Nonetheless, there has been no detailed discussion or analysis of whether these initiatives constitute a powerful mechanism to legitimize and regain public trust in HEIs through sustainability engagement. To fill this research gap, this study examines how institutional logics for sustainable responsibility, which necessitate social accountability and stakeholder engagement, influence the increasingly complex HE sector.

First, we attempt to identify how HEIs engage with the goal of SD by reforming their social interactions through decision-making on knowledge for SD, sensemaking narratives for SD, and collective mobilization towards a sustainable campus. Second, we empirically examine the relationship between these social interactions and HEIs’ ethical and environmental reputations.

In the light of institutional logics metatheory, our findings reveal interesting observations. Since 2012, UK HEIs have been characterized by the interdependence of logics related to competition, public policy, and community. These logics have influenced how HEIs engage with broader sustainability principles, demonstrating socially meaningful knowledge activities. The findings show how little influence decision-making tools, such as the responsible staff at HEIs and learning about SDGs, have on improving reputation. There is a clear link between how HEIs’ sensemaking (e.g., by including information on SD in their annual reports) and their environmental and ethical reputation, as well as between stakeholder involvement and changes in society, the economy, technology, and the environment. From this point of view, the set of practices fits with a way of talking to people that involves ‘culturist-oriented sensegiving and sensemaking’ to change how institutions work in higher education (e.g., Nigam and Ocasio, 2010).

Our results show that a greater depth of sustainability disclosure ensures more reputational benefits for UK HEIs. Nevertheless, the results may suggest that the improvement of sensegiving accounts (i.e., DSD levels) is gradual. This is because our results may show how HEIs behaved regarding sustainability in the first few years following the reforms that started in 2012. The full impact of these reforms on DSD strategies may not have been realized until 2015.

HEIs’ annual reports are increasingly used as ‘public displays’ of social, environmental, and economic initiatives and actions. Our findings confirm a cultural shift from a significant focus on financially led disclosure by UK HEIs in 2012. This potential cultural shift compounds the vital need to improve present findings by more closely examining DSD behaviours after a relatively extended period; such examination is required to fully appreciate the strengths, opportunities, and threats of the new UK reforms and logics. As the disclosure on the sustainable development index (DSDI) reflects the information demanded by the primary users of HEIs’ annual reports, one crucial practical implication is that wider stakeholders and resource providers give greater primacy to news disseminated through formal accountability channels. Therefore, we contend that HEIs should promote and link a specific understanding of their ‘sustainable’ identities to logics and organized practices around ‘shared purpose and similar outputs’ to catalyze the building of cognitively legitimate status and reputation.

Taken together, the pledge of business schools to include sustainability purposes as the cornerstone of education lends credibility to the collective mobilization of logics by HEIs in a way that brings about an enduring competitive advantage. Towards such a competitive advantage, our evidence supports applying recommendations by Lozano et al. (2015) to place a greater emphasis on staff and scholar training programmes for SD.

This study also offers critical policy and regulatory insights. Regarding DSD, our evidence suggests that policy-makers should initiate an active dialogue to determine the exact role of initiatives and declarations related to sustainability. Such dialogue may reduce the uncertainty surrounding the role of HEIs in delivering sustainability contributions, such as developing SD requirements as a meaningful accountability device and benchmarking tool. If ongoing transformation towards sustainability is to be achieved, funding agencies and the HE accounting board of the Financial Reporting Council (FRC) are expected to enforce, strengthen, and enhance compliance with these requirements.

Notably, this paper takes a necessary step to present a finer-grained picture of how sustainability performance and disclosure may relate to the HE sector. Even though our results hold up under several different analyses and sensitivity checks that find better ways to measure sustainability disclosure and account for various endogeneity issues, more research is needed to address some of the study's shortcomings. Using an ordinal weighting scheme to determine how specific the disclosure was might have helped us understand the impact of narrative based on how well it describes things and fits with social norms. However, the inherent difficulty in determining the appropriate impact value for each type of disclosure might limit scale numbering. For instance, further research using the textual sentiment approach could better investigate whether a sincere and optimistic tone in HEI annual reports is congruent with and can predict reputational performance.

Future research may also emphasize DSD through a social medium, such as Twitter or Facebook, and examine the value of its content in terms of reputation. Due to the partially automated data collection and the unique nature of the relatively labour-intensive hand-coding process, we limit our analysis to UK HEIs. Thus, future studies may arguably consider a cross-cultural investigation of DSD behaviours and the evaluative logic of cross-country reputation-granting audiences.

We take the novel approach of using the Guardian newspaper's annual reputation survey of the PPUL, the UK's only ranking of all public UK universities according to various environmental and social sustainability criteria. Nonetheless, the evidence in this study is limited to cross-sectional associations precisely because of the reliance on PPUL's much more articulate and refined methodology. Future tests, therefore, may consider league tables beyond 2015, given that future league tables will be consistently compiled across the years to allow for longitudinal analyses. This approach could provide new insights by re-examining our evidence and enabling comparisons over time. Reputational ratings offer vital advantages for assessing stakeholder trust, and the PPUL optimally uses publicly available data. However, to capture the multidimensional nature of HEIs’ public image, future studies may rely on other measures of reputation that may encompass additional criteria. Also, it would be interesting for future research to investigate whether greenwashing and, by contrast, green highlighting differentiate HEI motives for engagement in green talk or green walk, thereby managing their public image.

HEIs also face upward pressure related to financial sustainability. HEIs’ pension scheme deficit and upward pressure on costs are acute risk areas. A failure to secure industrial relations and commercial and non-academic income threatens HEIs’ future investment in student and staff development, infrastructure, and facilities. Future research may investigate how DSD relates to reducing the perennial risk of financial sustainability.

It is argued that UK HEIs, which control a network of interdependencies with other organizations and have power over critical resources (e.g., teaching and research income, international students, enterprise activities, and human capital), take more proactive actions. With time, these HEIs may tend to disclose more information or enhance their disclosure strategies compared with resource- or cash-strapped universities. Future tests, therefore, can examine whether resource munificence leads to more disclosure using longitudinal studies.