2.1. Public-Sector of Pakistan
Pakistan is the sixth most populated country in the world with an estimated 185 million inhabitants, falling into the category of a lower middle-income country with a per capita income of US
$1360 in 2013 [
16]. It is further noted that in the last decade Pakistan’s per capita income has almost doubled—prospects for economic growth are beginning to improve, supported by increasing reserves, low inflation and continuing strong remittances. However, on the contrary, the country’s recent GDP growth rates (estimated at 4.2 percent in 2015) have been slower than needed to provide the level of jobs required for a young and growing population.
In addition, poor public-sector management and security issues have hampered the performance and reputation of the country. The Reputation Institute reported that Pakistan has fallen into the lowest tier of poor reputation countries consecutively for five years (2011–2016) due to the inadequate performance of its public-sector organizations [
17]. The capacity and quality of services of these public institutions have been in a state of decline. This negative reputation of the public-sector together with political interference, endemic corruption and poor administrative capacity are reasons for why the attention of foreign countries has been diverted from investing in Pakistan [
16].
Also, Pakistan is currently facing an economic, social and environmental crisis. It was ranked among the top in a list of economically, socially and environmentally exposed countries. Pakistan is ineffective in the management of its natural resources and the country’s long history of unplanned development has led to undesirable impacts on the economy, society and the environment [
18]. According to the World Health Organization (WHO), Quetta, Peshawar, Lahore and Karachi are now considered amongst the most polluted cities in Asia Pacific [
19].
However, in Pakistan, development projects must be approved by the Pakistan Environmental Protection Agency [
20] but unfortunately only those with likely adverse environmental and social impacts have to undergo this process [
18]. Thus, it does not seem to be an effective tool for protecting the socio-economic fabric and environment of Pakistan.
Therefore, the introduction of carefully planned sustainable programs/projects is vital for building the reputation of the public-sector of Pakistan. The World Bank suggested that there are a few components for the development of the public-sector [
21]. Those components include prior feasibility studies, proper planning, environmental analysis, societal impact and the economic viability of projects. Furthermore, the Asian Development Bank suggested that appropriate policy measures and effective investment projects should be put in place together to achieve sustainability in the country [
22]. In the early 2000s, the Government of Pakistan (GoP) recognized that if Pakistan wanted to accelerate and sustain growth, reduce poverty and enable citizens to compete in a global market, the country’s public-sector would need drastic improvement [
23]. A recent government report suggested that Pakistan is on the path to achieving the goals of sustainable development through Vision 2025, in which their focus is mainly on the economic, societal and environmental welfare of the country [
24].
Hereafter, the priority of the government should be to implement projects that have an early development impact on the reputation of the public-sector. This is possible through a balanced uplift of the economy, environment awareness and increased attention for various segments of society, leading to higher and sustainable growth. In the next section of the study, the concept of reputation and how it is built will be highlighted and discussed.
2.2. Corporate Reputation
The origin of reputation stems from the concept of the corporate image, which was developed in the 1950s, and it is currently becoming more important to managers and scholars around the globe [
25,
26]. Although it is a well-established construct, there is still no agreement on the definition.
Over time, numerous definitions of corporate reputation have been proposed. Conventionally, reputation was defined as the shared experience of employees and those who interact with the organization [
27]. On the other hand, corporate reputation is understood as the stakeholder’s opinion of an organization, which includes customers, employees, distributors, competitors, suppliers and the public [
28]. Similarly, reputation is described as a perception of the people on how positively or negatively they evaluate the organization [
29]. Corporate reputation is also believed to be the aggregate of interpretations of stakeholders, based on the outcomes, behaviors and communications of the organization [
30]. In contrast, the reputation of public-sector organizations is defined as the assessment of the public organization by the stakeholders in terms of its credibility, reliability, responsibility and trustworthiness [
4]. It is suggested in the literature that the consensus for a definition of corporate reputation is crucial [
31]. While a variety of definitions have been given, in this study corporate reputation is understood as the assertions and perceptions of the general public, which are formed by the actions and results of the public-sector organizations.
Over the last three decades, corporate reputation has been considered an important asset to organizations with several benefits. In the private sector, reputation serves as a favorable means for organizations to charge premium prices, attract qualified applicants, improve the chances of organizations to gain admittance to capital markets and appeal to investors [
32,
33]. Also, it is believed that the survival of enterprises is facilitated by corporate reputation and it is a requirement for the formation of solid and long lasting bonds of trust with stakeholders and customers while also enhancing the organizations’ ability to create value [
34]. Similarly, corporate reputation helps organizations to gain competitive advantage and allows the organization to survive in times of economic turbulence [
35]. In contrast, the reputation of public-sector organizations is considered to be a valuable resource that is difficult to imitate and provides a sustainable positional advantage to organizations [
36]. Furthermore, public-sector organizations gain their legitimacy by having a positive reputation. In a similar study, it has been concluded that a reputation contributes to stability, improved performance, employee loyalty, ease of recruitment and decrease in transaction costs of a public-sector organizations. Hence, to achieve those fruitful benefits, public-sector organizations strive to develop strong and positive reputations.
On the other hand, it is evident from the existing literature that the prime focus of researchers is to investigate the determinants that improve the reputation of private sector organizations around the world. Earlier, employees were identified as the key means for the creation and support of corporate reputation [
37]. In the same way, credibility and trust are the factors which must be managed to maintain an organizations reputation [
38]. Alternately, researchers investigated the effect on reputation of engagement in social media activities, responsible supply chain practices and firm size and the image of the president of a firm and concluded that these factors can enhance the reputation of organizations [
39,
40,
41]. In parallel, the literature also offers evidence on the role of corporate social responsibility in developing a positive corporate reputation [
15,
35,
42]. However, in recent literature, it has been observed that sustainability reporting is useful in generating and enhancing the reputation of public-sector organizations [
14,
43].
Similarly, in the context of Pakistan, a study was conducted by Khan et al. [
44], who concluded that corporate social responsibility can enhance the reputation of organizations in the cement industry. Likewise, Ali et al. [
45] revealed that high-quality products and services lead to the improved reputation of IT related private sector organizations in Pakistan. Furthermore, if the public-sector organizations in Pakistan want to revive their reputational integrity, they should focus on delivering benefits to the general public through their projects [
46].
Hence, it is ascertained here that the focus of studies in Pakistan and globally are mostly on the determinants of the reputation of private sector organizations. However, there is a vacuum of research for the development and improvement of the reputation of public-sector organizations. Further insights into the antecedents of corporate reputation are needed given the importance of reputation worldwide.
2.3. Sustainability
One of the major concerns for practitioners as well as academicians in the present era is restoring the sustainability of our planet. It is noted from the existing literature that organizations implementing sustainable practices obtain reputational gain [
47], where sustainability or sustainable development is defined by the Brundtland Commission’s Report as “the development that meets the needs of the present without compromising the ability of future generations to meet their own needs” [
48].
Later, the concept of the Triple Bottom Line of sustainability was coined, which proposed that organizational goals were inseparable from the societies and environments within which they operate [
49]. Similarly, sustainability has been commonly represented by a set of triangular concepts—known as the three-pillar model of the environment, the economy and society [
50]. Likewise, it has been debated in the literature that sustainability has several dimensions, but the most common are the triad of “Ecological, Social and Economic” and these three spheres are interdependent on each other [
51]. Hence, it is understood from the previous discussion that sustainability is a composition of the economic, social and environmental dimensions, which are discussed separately in the upcoming sections.
2.3.1. Economic Sustainability
The economic aspect of sustainability has been discussed exhaustively in the current literature [
51,
52,
53]. The economic domain in sustainability is defined as the practices and meanings associated with the production, use and management of resources, where the concept of ‘resources’ is used in the broader context [
54]. Furthermore, it is recommended that we should find the unity of economic activity and its sustainable basis [
51].
Therefore, to achieve economic sustainability in public-sector organizations, we should: (i) use renewable resources instead of non-renewable; (ii) involve themselves in reuse and recycling of the waste produced; (iii) shift their emphasis from first costs to life cycle costs, where price of materials should account for costs such as emission, pollution and waste [
55]. Similarly, cost-accounting methods can still be used in decision-making processes but these methods are incapable and have been challenged for leading to improper decisions regarding sustainability [
56].
Perhaps public-sector organizations should be economically viable to be sustainable. According to the European Commission, public-sector organizations should follow economic procedures that are likely to achieve sustainable objectives and enhance the reputation of the organizations [
57]. Thus:
Hypothesis 1. There is a positive relationship between environmental sustainability and corporate reputation.
2.3.2. Social Sustainability
It is not just our environment and economy that is in trouble. The social aspect of sustainability is equally important and highlighted in the literature by academicians and practitioners. Social sustainability is gradually gaining importance, especially for organizations that are concerned to meet the requirements of social development [
58].
A few researchers have investigated the role of different public-sector development projects that consider the elements of the social fabric and its impact on the overall achievement of sustainability. It is also believed that metro projects are one of the major sustainable strategies to socially and economically develop countries [
53]. Similarly, it is suggested that if public-sector organizations want their projects to be socially sustainable they should focus on daily living provisions, image building, open space design and other related factors [
59]. Additionally, if public-sector organizations want to achieve social sustainability they should incorporate some criteria of six critical factors: conservation of resources and surroundings; satisfaction of welfare requirements; provisions facilitating daily life operations; the creation of a harmonious living environment; availability of open spaces; and the form of development.
Moreover, it is observed from the literature that organizations that stress the social development of the people, achieve sustainability and can develop a positive reputation. Whereas a lack of sustainable practices may result in negative impacts on the development of a country in the long term. Therefore, it is imperative that sustainability is included within the planning and development of public-sector projects and programs in a country. From a long-term perspective, the viability of society and humanity relies on sustainable development. Thus, if we want to organize for viability, we should organize for sustainability in public-sector organizations. A significant potential benefit of environmental, economic and social sustainability is the enhancement of a public-sector organization’s reputation [
60]. Therefore:
Hypothesis 2. There is a positive relationship between economic sustainability and corporate reputation.
2.3.3. Environmental Sustainability
Environmental sustainability is the center of attention for projects and products by many organizations nowadays [
58,
61,
62]. It has been examined more by public-sector organizations in recent years [
63].
However, it is still difficult for practitioners to incorporate environmental sustainability into their work. Moreover, scientists have identified climate change, deforestation, desertification, air pollution and ozone degradation as some of the pressing issues that are harmful to the environment within which we live. It is also noted that there is a tremendous strain on the environment due to the excessive and inefficient use of natural resources, causing global warming, polluting the environment and endangering biodiversity [
53].
In a similar study, it has been stated that sustainability, or sustainable development, has emerged as a normative concept to address the environmental crisis [
58]. However, public-sector organizations should utilize the available knowledge inside the community to take full advantage of the limited natural resources and the environment for long-term benefits such as improvement of their reputation [
64]. Therefore, we hypothesize:
Hypothesis 3. There is a positive relationship between social sustainability and corporate reputation.