Browsing by Subject "Corporate crisis"

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The double-edged sword of corporate social responsibility campaigns : examining the effects of congruence and identification in product-failure and moral crises
(2011-08) Kim, Yoojung; Choi, Sejung Marina
As consumer expectations of corporate values and ethics increase, more and more companies are engaging in corporate social responsibility (CSR) initiatives. While CSR in general is believed to play a positive role in consumer behavior, the implications of CSR in diverse situations that involve firms has not been studied in great detail. Specifically, little is known about how CSR activities influence consumer judgments in corporate crisis settings such as product-harm and ethical-misdeeds. Thus, in this dissertation, a series of experimental studies uncover the potential role of previous CSR engagement when a company is faced with a corporate crisis, and examine its impact on a consumer’s evaluation of the company. For a systematic and comprehensive understanding of this issue, two types of negative attributes in corporate scandals are distinguished: incompetence versus immorality. The results of the first experimental study suggest that prior CSR initiatives can more effectively protect consumer evaluation of the company when the company is faced with a competence-related negative event than a morality-related negative event. In addition, when the cause of CSR is directly congruent with the issue of the negative event, consumer responses were more negative than when there is no issue congruence between CSR and the negative event. The most interesting aspect is that the issue congruence effects were more negative for an immoral event versus an incompetent event. In other words, when a firm’s moral crisis is associated with a cause in a previously involved CSR initiative, consumers perceive that the firm’s intention of CSR initiative involvement was the least sincere and altruistic. The second study of this dissertation examines how consumer-company identification can protect the company from a corporate crisis in the context of an incompetent versus an immoral crisis situation. The findings of this study reveal that consumers strongly identified with the company perceive the company’s negative information less seriously than weak identifiers with the company regardless of the negative type – incompetence or immorality. Finally, the detailed theoretical and managerial implications of the dissertation and the role of CSR initiatives in crises are discussed.
The moderating roles of consumer-company identification and perceived fit between corporate associations and crisis type in the effectiveness of crisis communication strategies
(2012-08) Kim, So Jung, 1976-; Atkinson, Lucinda; Choi, Sejung Marina; Drumwright, Minette E; Eastin, Matthew; Falbo, Tony L
Many of today’s corporations face crisis events. A few well-known examples include Tylenol’s poisoned capsules, Odwalla’s contaminated juice, Mattel’s defective toys, Toyota’s product-recalls, and more recently, BP’s Gulf oil spill. Whether or not it is at fault, a corporation must sometimes overcome negative public sentiment resulting from a crisis and taking a proper action, especially an appropriate response strategy, is necessary for the company to overcome such a predicament. This study, therefore, seeks to systematically investigate how two critical constructs – consumer-company identification and corporate association-crisis type congruence – in a corporate crisis context conjointly determine the effectiveness of crisis communication strategies by the corporation. More specifically, this study examines how varying degrees of consumer identification with a company affect the effectiveness of one of the common crisis response strategies, excuse. It also seeks to discover how the consumer-company identification moderates the effectiveness of different types of crisis communication strategies (compensation vs. apology). In addition, the study attempts to determine how perceived fit between corporate associations and crisis type moderates the effects of crisis communication strategies (excuse vs. apology). The study’s results show that the excuse strategy is more effective for consumers strongly identified with a company than for those weakly identified with it. However, the level of consumer-company identification is not found to moderate the effectiveness of the compensation and apology strategies. The study also found a significant moderating role of perceived fit between corporate associations and crisis type in determining the effectiveness of the excuse and apology strategies. The findings suggest that when a company faces a crisis that violates its core corporate associations, the apology strategy is more effective; a company involved in a crisis irrelevant to its corporate associations is better served by the excuse strategy.