International Journal of Public Sector Management

Do public sector mergers (re)shape reputation?

Vilma L. Luoma-aho Mirja E. Makikangas
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Vilma L. Luoma-aho Mirja E. Makikangas , (2014)," Do public sector mergers (re)shape reputation? ", International Journal
of Public Sector Management, Vol. 27 Iss 1 pp. 39 - 52
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Public sector
Do public sector mergers mergers
(re)shape reputation?
Vilma L. Luoma-aho and Mirja E. Makikangas
University of Jyvaskyla, Jyvaskyla, Finland 39
Received 28 September 2012
Abstract Revised 21 December 2012
Purpose The public sector worldwide is under pressure to downsize, which has led to mergers of Accepted 7 January 2013
public sector organisations. This paper seeks to bridge the unstudied gap of what happens to
organisational reputation after a merger. The paper discusses change and reputation in the public
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sector, and reports findings of a longitudinal study on stakeholder assessments of four public sector
organisations undergoing mergers recently.
Design/methodology/approach Following a theory-driven content analysis, this longitudinal
study compares stakeholder assessments of four public sector organisations reputations a year before
an organisational merger with assessments of the two resulting organisations reputations two years
after the merger.
Findings The paper finds that the mergers did not really re-shape reputation, but the once
established reputation persevered. Although the organisations faced greater expectations after the
merger, only minor changes in reputation were detected post-merger: the reputation for expertise,
heavy bureaucracy and trustworthiness remained strong after the merger, but certain traits, such as
being international and esteemed, were lost. In both cases, one organisations prior reputation slightly
dominated the new reputation.
Research limitations/implications The findings may be limited to Finland and other Nordic
countries, as well as those countries where trust in the public sector is high.
Practical implications Mergers may not change once-established reputations, and hence the
improvements desired by mergers may go unnoticed by the different stakeholders. Organisations
merging must prepare for increased stakeholder expectations, as the new organisations arise
questions. Previous organisational traits may remain in stakeholders assessments despite any
achieved improvements.
Originality/value This paper addresses the gap in studying organisational reputation after public
sector mergers, and contributes to both theory and practice by providing insight into the stability of
once-established reputations.
Keywords Change, Stakeholders, Reputation, Organisational merger, Public organisations
Paper type Research paper

Introduction
The recent changes in the public sector amount to complex chains of cause and effect
affecting several different stakeholder groups (Cunningham and Kempling, 2007). The
aim has been improved services (Analoui, 2009), often benchmarked from the private
sector because they are seen to better meet user and stakeholder needs (Ghobadian
et al., 2009). During the processes of change public sector organisations face the dual
challenge of engaging the different stakeholders while maintaining public trust in the International Journal of Public Sector
public services (White, 2000). Pekkarinen et al. (2011) noted that despite the fact that Management
Vol. 27 No. 1, 2014
user needs should be at the centre of public sector change, the different stakeholders pp. 39-52
and their experiences often remain unclear in the background of the processes. The q Emerald Group Publishing Limited
0951-3558
importance of perceived public sector performance has recently been discussed DOI 10.1108/IJPSM-09-2012-0120
 IJPSM (e.g. Greitens and Joaquin, 2012), and the concept often used to study perceptions is
27,1 organisational reputation (Wraas and Byrkjeflot, 2012; Wraas et al., 2011; Jsang,
2008), but few studies have focused on the stakeholder assessments before and after
major organisational changes, such as mergers.
In fact, the public debate around public sector change often over-emphasises
economic gains, and some have called for more values-based ideals to guide the change
40 (Rusaw, 2007). This would include engaging the different stakeholders of public sector
organisations in the process. Stakeholders are individuals, groups or organisations
affected or willing to affect public sector organisations, such as employees, decision
makers, other organisations, citizens, or those supervised or regulated by the public
organisation. Stakeholder thinking has been accepted in the public sector due to its
connotations of two-way communication and dialogical dependency, both central for
the public sector (e.g. Luoma-aho, 2007; Wynn-Williams, 2012).
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Organisational mergers, the combining of organisations to achieve gains such as

efficiency and savings (see e.g. Basu, 2006), are common in the public sector. The
benefits of organisational mergers include pooling resources and knowledge (Dooley
and Zimmerman, 2003), but it is often forgotten that the different stakeholders
experiences affect the change process and the perceived merger success (Lewis, 2007;
Pekkarinen et al., 2011). In fact, stakeholders assessments are believed to influence
organisations future resources (Dentchev and Heene, 2004) and can make or break an
organisational mergers (Barrett, 2002; Elving, 2005), as stakeholders expect honest
communication (Lewis, 2007; Johansson and Heide, 2008).
During times of change, ongoing communication with stakeholders (Gilley et al.,
2009) and stakeholder trust (Dervitsiotis, 2003) are central, and the success of these can
be perceived as organisational reputation. We define organisational reputation as a
record of the organisations past deeds, the sum of stories told about it among the
stakeholders (see e.g. Fombrun et al., 2000). Operational-level information has to be
integrated with the strategic visions of change, as engaging stakeholders in the future
vision influences their attitudes toward it (Hoadley and Lamos, 2012). In fact,
managing stakeholder expectations (Ojasalo, 2001) and understanding stakeholder
needs are becoming central for public sector organisations in an era where unsatisfied
stakeholders can publish their opinions online and cause potential organisational
damage (Tirkkonen and Luoma-aho, 2011).
This paper bridges the unstudied gap of what happens to organisational reputation
after a merger through studying how stakeholders perceive public sector organisations
and their functions before and after organisational merger. The aim of organisational
mergers is often to improve organisational efficiency, yet if these improvements are not
perceived by the stakeholders and visible through an improved reputation after the
merger, the benefits desired may remain few. We measure the changes in
organisational reputation and report both quantitative and qualitative findings of a
longitudinal study of four research and regulation-type public sector organisations
that merged to become two new entities.
The paper is organised as follows: first, the concept of reputation is defined and its
suitability for the public sector is discussed. Second, the focus is turned to
organisational mergers. Third, the data and research process are reported, and fourth,
the central results and analysis. To conclude, we discuss the implications these results
have to public sector reputation and planning in general.
 The concept of reputation and public sector organisations Public sector
To answer the research question of what happens to reputation after a merger, the mergers
concept of reputation must first be understood. A reputation could be described as a
record of past deeds, and it is a reflection of an organisations ability to meet the needs
and expectations of its stakeholders (Coombs, 2007). This ability to meet needs is
central for public sector organisations undergoing change, and a good organisational
reputation among stakeholders is viewed as reputational capital (Coombs and 41
Holladay, 2006).
Reputation is often discussed as merely positive, but a reputation can also be negative
or neutral. A reputation resides among the stakeholders, and the underlying assumption
is that the organisational reputation should create positive associations for the
organisation (Puncheva-Michelotti and Michelotti, 2010). The benefits of reputation,
however, only result from a good reputation. A good reputation may reduce transaction
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costs, ease recruitment and improve employee loyalty (Fombrun and van Riel, 2004). A
reputation is built among the public during their encounters with the organisation
(MacMillan et al., 2005), and the aim of reputation management is to guide these
encounters in a favourable way for the organisation (Aula and Mantere, 2008).
Reputation is often linked to the concept of brand and the process of service
branding, which is believed to make the public sector more approachable. A brand
refers to the different impressions and images related to products and services,
whereas a reputation reflects the organisations ability to meet stakeholder
expectations (Fombrun and van Riel, 2004). The two concepts are interrelated, as
both help distinguish the organisation from others (Balmer and Gray, 2003), and the
core values of a brand contribute to organisational reputation (Urde, 2009). Service
branding studies support the importance of stakeholder engagement, as the stronger
the customer orientation, the better the brand (Whelan et al., 2009). Similarly, service
branding deals with frequent encounters with customers (de Chernatony and
Segal-Horn, 2003), and has been considered suitable for the public sector. A successful
service brand emphasises the organisations ability to receive feedback and make
necessary changes, demonstrating that the customers experience is fundamental.
However, branding in the public sector should focus more on deeds than impressions
(Hoskins, 2003), and certain methods, such as advertising, are not always suitable for
the public sector (Whelan et al., 2009).
In fact, there are challenges in constructing reputation in the context of public sector
organisations. According to Wraas and Byrkjeflot (2012), these include the inherently
political nature of public organisations, an inability to connect with stakeholders on an
emotional level and the difficulties complex public organisations face in trying to
communicate a coherent message. Moreover, as excellent reputations heighten
expectations, Luoma-aho (2007) warned against the Midas touch in the public sector.
Instead, public sector organisations could aim at neutral levels of trust and reputation
(Luoma-aho, 2007, 2011), which would provide a critical operating distance and be
achievable using the existing public sector resources.
Reputation is formed in the eye of the beholder, and hence its measurement consists of
a combination of factors. Previous studies have divided the concept into various
measurable terms and dimensions which make the concept more concrete by describing
the schema-processes of individuals when assessing the reputation of an organisation.
Measurement tools of reputation include The Reputation Quotient (Fombrun et al., 2000),
 IJPSM measuring reputation through six different dimensions such as emotional appeal, as well
27,1 as The Corporate Character-measures (Davies et al., 2004). As typical for reputation
barometers, each dimension consists of individual statements or adjectives that can be
used to describe the organisation. The Reputation Institute (2012) has also recently
added issues such as stakeholder support to its RepTrack-tool. Other tools used to
measure reputation include the more mathematical SDSIrep (Bouajjani et al., 2008)
42 focusing on the flow of relationships central for reputation and the MIMIC-model where
reputation is measured through various indicators (Safon, 2009).
Though reputation is not entirely new for the public sector (see e.g. Andreassen,
1994), the tools designed to measure reputation in the public sector are few in numbers.
For cities and municipalities, a Pohjoisranta designed tool measures the attractiveness
of cities through reputation dimensions (Suomen Kuntaliitto, 2004). Municipalities are
more like business organisations by reputation, as they often compete with each other for
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investments and inhabitants. For the public sector organisations with little direct
competition, Luoma-aho (2007) has developed a reputation barometer to measure
reputation through both qualitative and quantitative questions yielding scores of 1-5 on
five different reputational factors: authority, esteem, trust, efficiency and service.
Though many of these are alike other reputation measures, the factor Authority,
measuring for example how customer oriented, distant or bureaucratic the organisation
is perceived, is especially designed for public sector needs.
Knowing what stakeholders think and following public opinion is becoming more
challenging as different issues arise and citizens discussions increasingly take place in
different arenas outside the organisations control (Luoma-aho and Vos, 2010). This has
introduced reputation measures to also include online spheres, and several tools exist
to measure and guard organisations reputation and influence online (e.g. cision.com,
radian6.com, klout.com). However, public sector organisations often lack both the
skills and the resources to closely monitor activities in these different arenas where
their central stakeholders meet, sometimes resulting in the introduction of policies and
decisions not supported by citizens and stakeholders (Pekkarinen et al., 2011) and even
making existing crises worse (Tirkkonen and Luoma-aho, 2011).
Despite these challenges, the concept of reputation has some benefits that speak for
its adoption in the context of public sector organisations, such as its formation based
on past actions and deeds and its link to organisational legitimacy (Deephouse and
Carter, 2005). A good reputation can affect general acceptance and ensure the
legitimacy of the target over time. This contribution to legitimacy is central when the
existence of each public service is weighed against other similar services and funding
sources are diminishing. When downsizing has become the norm, well thought of
organisations survive longer (Deephouse and Carter, 2005).

Public sector mergers seen through reputation

Organisations collaborate for different reasons, but often the aims behind joining two
organisations include co-exploration and co-exploitation, where the organisations
together hope to be more innovative and efficient than on their own (Parmigiani and
Rivera-Santos, 2011). Pfeffer and Salancik (1978) explained mergers as a way to control
the organisations dependency on its changing resources and environment. Mergers
represent merely one form of public sector reform, but they are popular as they allow
some maintenance of existing structures.
 As literature on reputational mergers is lacking, previous studies in brand mergers Public sector
may be of assistance. Mergers often aim at obtaining benefits beyond the reach of mergers
smaller units (Kumar and Blomqvist, 2004), which can be either internal, such as
building on organisational synergy and savings, or external, perhaps aiming at better
placement in the market (Basu, 2006). Mergers and networking have particularly
affected the large health-care sector as a means to pool knowledge, cut costs and
increase the quality and coverage of services (Dooley and Zimmerman, 2003). 43
Establishing a new merged brand requires a clear brand strategy to guide and
motivate the stakeholders involved. The basic goal of keeping customers engaged and
loyal to the brand remains throughout the merger, as customer relations define a
central part of the brand value (Kumar and Blomqvist, 2004). Though this is a valid
theory, in practice mergers are often unpredictable and messy, and may activate
unforeseen stakeholders and issues (Luoma-aho and Paloviita, 2010). However, the
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financial, legal and normative boundaries guiding mergers in the public sector may
force organisations to solve issues threatening collaboration, as in a metaphoric
marriage relationship (Dooley and Zimmerman, 2003), but public sector organisations
as spouses include very complex chains of actions.
The focus of this study was to see what happens to organisational reputation after a
merger. Two of the four organisations to merge represented the field of research and
two were authority functions in the field of the Ministry of Social Affairs and Health in
Finland. In both mergers, the functions of the organisations did not change, but instead
they became larger units with similar functions. Previous studies established that
public sector organisations have reputations related to their functions: Luoma-aho
(2008) reported that authority-type organisations were typically considered more
bureaucratic by reputation than research-type organisations, hence it was expected
here that the sector reputations would remain throughout the merger process.

Research data
This study wanted to know what happens to organisational reputation in the aftermath
of a merger, and the data used in the longitudinal analysis was collected through an
online reputation survey among the stakeholders of the four organisations both
pre-merger in 2008 and post-merger in 2011. Though many tools are available for
measuring reputation, this one was chosen as it was especially tailored to meet the needs
of the public sector, and more precisely the needs of the organisations under the Ministry
of Social Affairs and Health. The tool measured reputation through five established
reputational factors and several open-ended questions (see Luoma-aho (2007) for the
presentation of the tool), covering both quantitative and qualitative aspects of reputation.
For the study, four organisations were chosen representing two of the most common
fields under the supervision of the Ministry: authority functions and research
functions. The organisations under study had very limited contact with individual
citizens reporting mostly to the ministry. Therefore, the stakeholders chosen for the
study represented the different end-users of the organisations, and most important
stakeholders of the organisations consisting of decision-makers, peer organisations,
collaboration partners, organisations and businesses under the supervision of the
organisation, employees and other similar groups considered vital for the operation of
the organisations. These groups opinions were considered to most contribute to
maintaining or harming the organisations legitimacy.
 IJPSM The reputation tool consisted of five validated reputational factors as well as three
27,1 open-end questions. The open-end questions of the reputation survey tool analysed
here were: Please state in a few words or adjectives what first comes to your mind
about organisation x, What kind of experiences do you have of dealing with
organisation x? and Regarding the future of organisation x, I expect change in the
following areas: These were chosen as previous studies have taken reputation to
44 consist of top-of-mind awareness and personal experiences, and reputation has a clear
link to future expectations (e.g. MacMillan et al., 2005; Coombs and Holladay, 2006). In
the analysis, the answers to all these three questions were combined to study the
overall reputational changes. The answers to these questions were fewer in number as
not all respondents answered all questions.
The response rates were lower for the newly merged organisations than for the
pre-merger organisations, especially in the case of the research organisations. For the
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pre-merger organisations the response rates were: research organisation 1: 49 per cent
(n 340); research organisation 2: 45 per cent (n 317); and the newly merged
research organisation: 35 per cent (n 118); authority organisation 1: 47 per cent
(n 169); authority organisation 2: 55 per cent (n 230); and the newly merged
authority organisation: 46 per cent (n 114).

Results and analysis: a merged reputation?

Given the focus on changes in reputation post-merger, in analysis we largely
concentrated on the qualitative answers. To start off the analysis, and to see the
direction of the overall development in reputation after the mergers, we looked at the
quantitative results of scores given by the stakeholders to each reputational factor
before and after the mergers (see Figure 1).
As we can see from Figure 1, a slight worsening of the otherwise good reputation
was apparent for all the factors for most organisations post-merger, except for
authority organisation 2, where the merger slightly improved its previous reputation.
For all organisations, factor Trust had still even after the merger the highest scores.
This factor included statements of impartiality, expertise and trustworthiness. These

Figure 1.
The values given on the
five reputational factors
by the stakeholders for the
organisations pre-merger
(2008) and after merger
(2011)
 could be considered to make up the reputational capital of the organisations. After Public sector
merger, the factors authority and efficiency remained the factors with the lowest mergers
scores, the most challenging areas for organisational reputation. As no major
differences in reputation were detected based on the quantitative analysis, a more
qualitative approach was needed.
Next we analysed all the stakeholder responses to the three open-end questions
of the barometer listed in the research data-section. For this merged data, we 45
applied theory-driven content analysis where the empirical data was analysed
through theoretical concepts and factors (Tuomi and Sarajarvi, 2009). As the focus
was on content of reputation, we first reduced the collected qualitative stakeholder
responses into relevant issues (such as expertise, bureaucracy). Next we
clustered these into similar topics (searching for reoccurring or missing topics
among the different stakeholder groups and comparing the amount of mentions).
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This analysis yielded lists of reputational contents before and after merger
presented in Tables I and II.

A stable, merged reputation

The results confirmed the stability of a good reputation despite the merger as only
minor differences were detected. The qualitative analysis revealed that the strongest
reputational traits remained after the merger: the organisations were still considered to
have great expertise, be trustworthy but have heavy bureaucracy. Interestingly, one
organisations reputation seemed to dominate that of the new organisation, as can be
seen from Tables I and II. In the case of research organisations, research organisation 2
was stronger, and in the case of authority organisations, the reputation of authority
organisation 2 was more evident in the new, merged organisation.

Research org 1 (2008) Research org 2 (2008) Merged, new research org (2011)

Health (50 mentions) Health (28 mentions) Health (33 mentions)

Expert (23) Expert (19) Expert (28)
Research (50) Research (45) Research (19)
Big in size (2) Big in size (7) Big in size (10)
Trustworthy (28) Trustworthy (6) Trustworthy (9)
Important (5) Important (8) Important (5)
Competent (2) Competent (2) Competent (5)
Knowledge (10) Knowledge (18) Knowledge (4)
Distant (2) Distant (8) Distant (4) Table I.
Bureaucratic (6) Bureaucratic (4) Bureaucratic (4) Stakeholder feedback
Dynamic (1) Dynamic (4) Dynamic (4) from the three
Welfare (3) Welfare (4) Welfare (4) open-ended questions to
Influencer (1) Influencer (2) Influencer (4) the two research
Unclear (3) Unclear (4) Unclear (4) organisations in 2008 and
International (3) International (2) the merged, new research
Interesting (1) Interesting (2) organisation in 2011
Esteemed (3) Esteemed (1) categorized according to
Stiff (7) Stiff (2) the number of mentions
Collaboration (4) Collaboration (1) in the clustered data
(listed after each entry)
Note: Only those with altogether three or more mentions are listed for the new organisation
 IJPSM Overall, the reputations of the new, merged organisations were slightly worse than
27,1 those of the pre-merger organisations. This may have been because the old
organisations had existed for a longer time and were able to establish grounded
reputations. This could also indicate that the new, merged organisations still needed to
prove their value to earn such a good reputation. Furthermore, new traits were
associated with the merged organisation. Interestingly, the merger did not do away
46 with stakeholders expectations for change, but instead the stakeholders expected more
change from the new organisations than from the old ones (there were more requests
for change in the post-merger data). This was understood to indicate problems in
reputation in the area of functions: to many stakeholders it remained unclear what the
newly established organisations actually did and were responsible for. Next, the two
mergers are studied separated by the organisations main functions.
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Research organisation
Though no major changes were detected, the analysis revealed the merger to have
improved reputation for the two research organisations. Like the old organisations, the
new organisation was known for health and research, but importantly its perceived
expertise and competence grew slightly stronger. The new organisation was also
considered more influential than the original two. Although trustworthiness remained
a strong part of the new organisations reputation, it was less apparent than it had been
for research organisation 1 in 2008. The new research organisation was not so strongly
known for knowledge than the previous organisations. Some reputational traits, such
as being seen as stiff or having the ability to collaborate, originated from only one of
the previous organisations dominant within each new organisation, as seen in Table I.
Some traits were reportedly lost entirely in the process, including being interesting,
international or esteemed, although only a small number of respondents raised this
point.

Authority org 1 (2008) Authority org 2 (2008) Merged, new authority org (2011)

Regulation (37) Regulation (49) Regulation (47)

Healthcare (2) Healthcare (2) Healthcare (20)
Expertise (6) Expertise (9) Expertise (13)
Unclear (1) Unclear (4) Unclear (9)
Authority (10) Authority (13) Authority (8)
Table II. Collaboration (4) Collaboration (8) Collaboration (8)
Stakeholder feedback Bureaucratic (1) Bureaucratic (3) Bureaucratic (6)
from the three Old-fashioned (4) Old-fashioned (5)
open-ended questions to Trustworthy (7) Trustworthy (3) Trustworthy (4)
the two authority Distant (6) Distant (3) Distant (3)
organisations in 2008 and Tough (6) Tough (2) Tough (2)
the merged, new Dynamic (2) Dynamic (1) Dynamic (2)
authority organisation in Strong (2) Strong (2)
2011 categorized Safety (9) Safety (1) Safety (1)
according to the number Unqualified (2) Unqualified (1)
of mentions in the Objective (2) Objective (1)
clustered data (listed after Competent (2) Competent (1)
each entry) for the new
authority organisation Note: Only those with altogether three or more mentions are listed
 Authority organisation Public sector
The merger was less beneficial for the two authority organisations reputation than for mergers
the research organisations. Following the merger, the new authority organisation was
still known for regulation and authority functions, but interestingly there was an
increased emphasis on healthcare, which had not been dominant previously. As seen
from table two, the reputation for expertise was stronger (more mentions) in the new
organisation, but the merged organisation was seen as being less focused and more 47
bureaucratic than the original organisations. Some traits in reputation that were
evident in only one of the previous organisations were present within the new
organisation, such as being perceived as strong, old-fashioned, unqualified, objective
or competent, but again these were not mentioned extensively.
Previous measurements (see Luoma-aho, 2007, 2008) of the organisations under
study reported their reputation to be quite good, so these strong results of unaffected
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reputation despite the merger may be a sign of strong reputational capital. Next these
findings and their implications are discussed in more detail.

Implications and discussion

As the public sector worldwide is under pressure to downsize, mergers have become
common. Though previous studies have noted that stakeholders assessments play a
central role during change (Lewis, 2007) and affect its success as well as organisational
learning (Rusaw, 2007), they are seldom the grounds for actual public sector change.
Previous studies have neither addressed the stakeholders perceptions of
organisational mergers from the point-of-view of organisational reputation. The
findings of our longitudinal study of two recent organisational mergers in the Finnish
public sector revealed that reputation remained similar both pre-merger and
post-merger. Minor changes were detected, but to answer the research question of
whether organisational mergers reshaped the reputation of the public sector
organisations under study, we must conclude a cautious no.
This result raises the question of whether the mergers are actually perceived by the
stakeholders as beneficial? If nothing much changed, was it because the once
established good reputation carried the organisations through the troubled merger, or
perhaps because the merger actually accomplished and changed very little? Though
both are possible, the minor changes evident may yet be of interest. The data shows
that despite the merging organisations carrying out similar tasks, their reputations did
not fully merge. In our cases, the reputation of one of the merging organisations was
slightly dominant within each new organisation, which could imply that a merger may
not always be the solution to trying to do away with certain associations and
reputation traits of organisations. In fact, mergers may sometimes even harm
organisational reputation: in three of the four organisations studied, reputation had not
improved, but slightly worsened two years post-merger.
As no major changes in reputation occurred, one may ask whether reputation could
altogether be ignored during mergers? Indeed, if the reputation of the merging
organisations is good and matching to begin with and, we find that no major input is
needed and authorities working on the merger can rely on the established sector
reputation (Luoma-aho, 2008). This would be good news for the tightly budgeted public
sector: a solid reputation may carry the organisations through mergers without major
investments. On the other hand, this could imply that a merger is not an ideal way to
 IJPSM improve reputation of public sector organisations. Two ill-reputed organisations
27,1 together could result in one very ill reputed larger entity, and not be associated with the
benefits of improved efficiency and increased performance (Kumar and Blomqvist,
2004; Basu, 2006) which are often the goals of mergers.
As mergers may not necessarily improve once-established reputations or change
the sector reputation, understanding the merging organisations reputation is still
48 helpful to predicting stakeholder responses and merger success. If a merger means
losing a central strength in reputation (e.g. the perception of the organisation as
international) then it may backfire, as establishing and developing a new reputation is
time consuming. Moreover, unintended changes may also result from mergers, as in
our case the authority organisation post-merger was considered less focused and more
bureaucratic. The newly established research organisation was also no longer really
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known for its international connections, though the research organisations alone had
spent decades building international connections. Moreover, due to a strong sector
reputation, previous organisational traits may remain in stakeholders assessments
despite achieved improvements in practice. These changes however minor could have
major implications for the organisations legitimacy in the long run.
Our study compared pre-merger reputation to post-merger reputation. One may
question whether the expectations for the merger were already apparent in the 2008
data and affected the respondents? To check for this we looked over earlier datasets
collected in 2001, 2003 and 2005 when mergers were not yet on the agenda (for these
studies, see Luoma-aho, 2007, 2008). This comparison yielded no detectable changes,
and the reputation of the organisations under study had previously only improved over
time. In fact, the after-merger data was the first to see a small decline in reputation. The
suitability of the measurement tool could also be questioned. However, since the
organisations functions and stakeholders did not change in the process, we feel that
the same tool for both measurements was the only reliable way to detect changes in
reputation. The validity of the tool had been previously tested (see Luoma-aho, 2007)
further increasing the trustworthiness of the study.
There are several implications for public sector organisations planning to merge.
First, to succeed, mergers require a thorough analysis of stakeholder perceptions and
sector reputation. Matching reputations of the merging organisations may help the
process, but even they do not necessarily guarantee the transfer of the desired
attributes or promise improved reputation. Moreover, authorities perceptions of the
changes required might not match the different stakeholders perceptions. Second, the
reputational strengths and weaknesses of the merging organisations must be
understood, and an analysis of how the merger might change or hinder them needs to
be conducted.
Although the findings of the study are limited to the context of Finland, and may be
applicable only in the Nordic context, the paper bridges the gap in studying
organisational reputation after public sector mergers and provides insight into how
stable once-established reputations are. Future studies should concentrate on
determining how mergers affect reputation in other cultural contexts, and focus on
the more in-depth experiences of those affected by the merger, as well as compare these
to the political and other measures of the merger success. Further, as this study only
focused on the research and authority-type public sector organisations, future studies
 should broaden the merger-related reputation studies to other types of public Public sector
organisations, such as municipalities and local governments. mergers
Reputation is established over time, and the pre-merger organisations have in some
cases had decades to build their reputation. This means it may be too early to
determine the long-term effects of the merger and more research is required in the
future.
This study could be complemented with future surveys showing whether the 49
reported changes were merely related to the merger-process or in fact more permanent.

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About the authors

Vilma L. Luoma-aho, PhD is an Adjunct Professor at the University of Helsinki and University of
Vaasa, Finland, and a Researcher at the Department of Communication, University of Jyvaskyla,
Finland, where she leads a research group focusing on the stakeholder expectations toward the
media. She has been a visiting scholar at Stanford University, H-STAR, as well as at the
Annenberg School for Communication, University of Southern California, Los Angeles. She has a
short public sector practitioner background, and is known for introducing the concept of neutral
reputation for public sector organisations. She has published in journals such as
 IJPSM The International Journal of Public Sector Management, Business History, Corporate Reputation
Review, Journal of Communication Management, Corporate Communications: An International
27,1 Journal, Business Ethics: A European Review, Management Research Review, Public Relations
Review and Human Technology. Vilma L. Luoma-aho is the corresponding author and can be
contacted at: vilma.luoma-aho@jyu.fi
Mirja E. Makikangas is an MA-student of Organisational Communication and Public
Relations at the Department of Communication, University of Jyvaskyla, Finland. She has
52 conducted research in collaboration with public sector organisations in Finland, and also holds a
BA in Organisational Communication with a minor in social policy.
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