Organizational Reputation as a Source of Sustainable Competitive Advantage and Above-Normal Performance: An Empirical Test among Local Authorities in Israel

The role of organizational reputation (OR) was studied as a source of sustainable competitive advantage (SCA) and superior performance, theoretically and empirically, among local authorities in Israel. Using the LISREL VIII program, we proposed a mediation model that argued for a relationship between OR and financial performance, mediated by three tests for SCA: OR-value, OR-rareness and OR-inimitability. The effects of demographic and environmental variables on financial performance were also examined. Strong support was found for the resource-based view (RBV), maintaining that to achieve superior performance, organizations need to acquire SCA, which is dependent upon the core resources it possesses.