The Effects of CEO Celebrity and Charisma on Firm Response Strategy at the Onset of Corporate Crises

2019 ◽  
Vol 2019 (1) ◽  
pp. 13669
Author(s):  
Ao Wang ◽  
Jiuchang Wei
2019 ◽  
Vol 34 (2) ◽  
pp. 75-92
Author(s):  
Zhimei Yuan ◽  
Yi Guo ◽  
Xingdong Wang

Purpose The purpose of this paper is to examine the role of action visibility in moderating the relationship between firm response and individual legitimacy judgment. Since a firm may decouple its public commitment from its actual practice to cope with conflicting stakeholder interests, visibility is important for consumers to make judgment because it is difficult for them to observe a firm’s actual fulfillment of its public commitment to quality assurance after a product-harm crisis. Design/methodology/approach Scenario-based mixed design experiments were employed and 718 valid responses were collected. Findings The results indicated that, while acknowledging responsibility produced more favorable legitimacy judgment than denial, decoupling produced no better judgment than denial. However, higher visibility significantly amplified the effect size. Specifically, under the condition of high visibility, not only did acknowledging responsibility produce much more favorable judgment than denial, but so did decoupling. Research limitations/implications This study provided empirical evidence that action visibility moderated the relationship between firm response and individual legitimacy judgment, thus complementing the literature on crisis management. Practical implications This study provided executives or managers with optimal, suboptimal and least optimal response strategies under different levels of action visibility. Originality/value Much of the extant research on response strategy for organizations to deal with product-harm crisis ignored the moderating role of action visibility. Past research on legitimacy judgment focused on organization. This paper combined firm response, action visibility and individual-level legitimacy judgment.


2020 ◽  
Vol 75 (7) ◽  
pp. 875-886 ◽  
Author(s):  
Nadine J. Kaslow ◽  
Elsa A. Friis-Healy ◽  
Jordan E. Cattie ◽  
Sarah C. Cook ◽  
Andrea L. Crowell ◽  
...  

MedienJournal ◽  
2018 ◽  
Vol 42 (1) ◽  
pp. 33-50
Author(s):  
Maria Gruber

Corporate Social Responsibility reporting has grown increasingly in importance for companies in terms of portraying themselves as good corporate citizens. However, when confronted with a major corporate crisis that evoked an extensive loss in stakeholders’ trust, it remained unclear, how to further deal with the need for CSR communication without presenting oneself as exceedingly hypocritical. In the course of this study, the questions of how and to what extent crises cause change in a corporation’s CSR rhetoric were addressed. Therefore, the utilization of the rhetorical dimensions of logos, ethos, pathos, cosmos and autopoiesis as well as the amount of negative disclosure in the CSR reports of the world’s leading automobile companies (Toyota, General Motors, Volkswagen) were analyzed, one year before and one year after they had maneuvered themselves into a corporate crisis. The rhetorical analysis revealed that the distinctive context of each case (including the corporations’ responsibility for the crisis) dictated the rhetorical adjustments of the CSR reporting after the crisis. Moreover, it could be shown, that when reporting on the crisis cause itself, corporations tend to apply the dimension of ethos more frequently to counter the audience’s potential perception of their hypocrisy.


2018 ◽  
Vol 32 (2) ◽  
pp. 103-119
Author(s):  
Colleen M. Boland ◽  
Chris E. Hogan ◽  
Marilyn F. Johnson

SYNOPSIS Mandatory existence disclosure rules require an organization to disclose a policy's existence, but not its content. We examine policy adoption frequencies in the year immediately after the IRS required mandatory existence disclosure by nonprofits of various governance policies. We also examine adoption frequencies in the year of the subsequent change from mandatory existence disclosure to a disclose-and-explain regime that required supplemental disclosures about the content and implementation of conflict of interest policies. Our results suggest that in areas where there is unclear regulatory authority, mandatory existence disclosure is an effective and low cost regulatory device for encouraging the adoption of policies desired by regulators, provided those policies are cost-effective for regulated firms to implement. In addition, we find that disclose-and-explain regulatory regimes provide stronger incentives for policy adoption than do mandatory existence disclosure regimes and also discourage “check the box” behavior. Future research should examine the impact of mandatory existence disclosure rules in the year that the regulation is implemented. Data Availability: Data are available from sources cited in the text.


2021 ◽  
pp. 002224292110021
Author(s):  
Alireza Golmohammadi ◽  
Taha Havakhor ◽  
Dinesh K. Gauri ◽  
Johann Joseph Comprix

Firms are increasingly turning to social media platforms for complaint handling. Past research and practitioners’ reports highlight the benefits of complaint handling on social media, urging firms to provide prompt and detailed responses to complaints. However, little research has explored the possible drawbacks of such practices, especially when responses inadvertently further publicize complaints. Utilizing two unique data sets in a series of observational and quasi-experimental analyses, this research provides the first evidence of complaint publicization in social media, a phenomenon in which firm responses to complaints on popular social media platforms increase the potential public exposure of complaints. This negative effect can outweigh any positive customer care-signaling impact from firm responses. The authors show that a response strategy that engenders a high level of complaint publicization – e.g., providing detailed responses through multiple communication exchanges with a complainant – could negatively impact perceived quality and firm value, diminish the positive impact of a firm’s own posts, and increase the volume of future complaints. Additional analyses reveal that these adverse impacts are stronger for firms that are targeted by retail investors. The authors also uncover specific response strategies and styles that could mitigate these effects.


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