On the contrasting strategic impact of online customer reviews for niche and mainstream organizations

Abstract

Purpose A significant body of extant empirical evidence has shown that online customer reviews (OCRs) are important in driving organizational performance outcomes. However, it is posited in this manuscript that the relationship between OCRs and organizational performance is unlikely to be the same in all cases. This paper aims to study if niche organizations experience different performance impacts from OCR activity than mainstream organizations do. Design/methodology/approach To test the hypothesized predictions, an empirical analysis is conducted in the context of higher education in the USA, where liberal arts colleges are classified as niche organizations and research universities are classified as mainstream organizations. The regression methods are used to analyze archival data on these organizations of interest. Findings The first major finding is that niche organization status positively influences the relationship between OCR valence and organizational performance outcomes. Second, a large volume of OCRs is found to have a negative impact on performance outcomes for niche organizations. Originality/value The research uncovers important differences in the relationship between OCRs and organizational performance for niche and mainstream organizations. These findings add to the extant body of literature on this area of inquiry by providing further nuance to the existing arguments and empirical evidence.