Protests that target firms’ socially irresponsible behavior are increasingly organized via digital media. This study uses two methods to investigate the effects that online protests and mitigating firm responses have on shareholders’ and consumers’ evaluation. The first method is a financial analysis that includes an event study which measures the effect of online protests on the target firm’s share price, as well as an investigation of the boundary effects of protest characteristics. The second method is an online experiment that assesses (...) the effect of an online protest campaign on consumers’ perception and purchase intention, as well as any mitigating effects that a firm’s response may have. Contrary to recent studies suggesting that participation in online protests is only token support without any substantive effects, our results show that online protests do hurt. Firms can expect to suffer financial, reputational, and sales damage when an online protest campaign mobilizes consumers successfully. We also show that online protests are more likely to take firms by surprise than offline protests. Firms can exacerbate or reduce the damage by their response. We find that although firms may repair the damage to consumers’ purchase intentions, the negative effects on a brand’s image are harder to rectify. The results have valuable implications for protest organizers and managers faced with the task of responding. (shrink)

This article investigates the factors affecting how public relations autonomy, legal dominance, and strategic orientation affect crisis communicative response in corporate contexts. Communication managers, crisis managers, public affairs managers, and/or public relations managers were solicited from Taiwan’s top 500 companies to participate in a survey. The results revealed that, in contrast to public relations autonomy being the strongest and sole predictor of concession strategy, legal dominance could predict defensive and diversionary responses in crisis events. The article concludes with a discussion (...) of practical applications and theoretical implications. (shrink)

The corporate responsibility (CR) discussion has so far been rather fragmented as academics tackle it from their own areas of expertise, which guarantees in-depth analyses, but leaves room for broader syntheses. This research is a synthetic, interdisciplinary exercise: it integrates philosophical, psychological and managerial perspectives of corporate responsibility into a more holistic CR-model for the benefit of academics, companies and their interest groups. CR usually comprises three areas: environmental, social and economic responsibilities. In all these areas there should be a (...) match between corporate values, discourses and actions. The aim of this multidisciplinary research is to build a CR-model by integrating (1) utilitarian/egoistic, duty/rights/justice and virtue ethical corporate values with (2) increased consciousness of psychological defences in corporate discourses, in order to achieve (3) responsible environmental, social and economic corporate actions. The resulting CR-model can be tested in companies and executed through corporate strategic and operational management. (shrink)

There has recently been a growth in research that examines how corporations respond to allegations of unethical actions. Although scholars have gained much insight about the range of responses available to and used by organizations, there has been almost no study of why firms choose one response over another. In this article, the authors present a framework of likely organizational response choices to allegations of wrongdoing; we propose that response choices are based on the degree of reputational risk from stakeholder (...) withdrawal of support and on perceived threats to the firm’s primary or secondary identity. (shrink)

Both individuals and organizations can engage in unethical behaviors. Across six experiments, we examine how people’s ethical judgments are affected by whether the agent engaging in unethical action is a person or an organization. People believe organizations are more unethical than individuals, even when both agents engage in identical behaviors. Using both mediation and moderation analytical approaches, we find that this effect is explained by people’s beliefs that organizations produce more harm when behaving unethically, even when they do not, as (...) well as people’s perceptions that organizations are relatively more blameworthy agents. We then explore how these judgments manifest across different kinds of organizations as well as how they produce discrepant punishments following ethically questionable business activities. Although society and the law often treat individuals and organizations as equivalent, people believe for-profit organizations’ behaviors are less ethical than identical individual behaviors. We discuss the ethical implications of this discrepancy, as well as additional implications concerning reputation management, punishment, and signaling in organizational contexts. (shrink)

Organisational psychological defences protect the self-esteem and moral integrity of the organisational personality even at the expense of sacrificing the morality of actions. This paper analyses the spectrum of defences used by an oil refinery and its parent company during an oil spill incident. A hypothetical model of defences built on Swajkowski’s four responses to accusations of organisational misconduct – refusals, excuses, justifications and concessions – is tested through this case. On the basis of empirical findings it is obvious that (...) defences delay, impede and interrupt the mitigation and recovery actions of incidents. It is not possible to break the defence behaviour of individuals because it is a built-in psychological mechanism in all humans serving a valuable purpose of dosing the pain of injury. However, it is possible to separate individual and organisational behaviour so that automatic organisational procedures mitigate, recover and, ultimately, prevent incidents. The organisational psychological task of crisis management is to mitigate the organisation’s ego defences, recover from its emotional turmoil and prevent further traumas by making its ego stronger and more flexible. The argument of this paper is that in practice organisational defences act as bumpers against becoming too conscious of the gap between the corporate rhetoric and reality, as subconscious breaks against too fast change demands, and as batteries in their preconscious effort to prepare for the change. Organisational refusals act as bumpers, excuses as breaks and justifications as batteries, while concessions imply that a change towards a more responsible corporation is taking place. (shrink)

A company’s product-harm crises often lead to negative publicity which substantially affects purchase intention. This study attempts to examine the purchase intention and its antecedents (e.g., perceived negative publicity) during product-harm crises by simultaneously including perceived corporate ability (CA) and corporate social responsibility (CSR) as moderators. In the study’s proposed model, purchase intention is indirectly affected by perceived CA, negative publicity, and CSR via the mediation of trust and affective identification. At the same time, the influences of perceived negative publicity (...) on trust and affective identification are moderated by perceived CA and CSR, respectively. Empirical testing using a survey of car users from 477 working professionals confirms most of our hypothesized effects except the insignificant moderating effects of perceived CA. Finally, managerial implications and limitations of our findings are discussed. (shrink)

The ethical behaviour and social responsibility of private companies, and in particular large corporations, is an important area of enquiry in contemporary social, economic and political thinking. In the past, a company's behaviour would be considered responsible as long as it stayed within the law of the society in which it operated or existed. Although this may be necessary, it is no longer sufficient. In this paper, we examine an energy company's response to an ethical incident in New Zealand which (...) prompted different responses across the country about the role of business in society. Thus, we argue that when a corporation is accused of unethical behaviour, executives of the company are usually compelled to offer responses to defend their actions and corporate image. Further, we use communicative response model, social issue life cycle theory, and organisational learning, to analyse the incident and how the company responded. Using social issues life cycle theory and organisational learning theory, we demonstrate that sustained pressure can potentially trigger a change of strategy that may serve to improve the ethical posture of a corporation and thereby improve the corporate image long term. We conclude that, although corporations may understand the significance of social issues to the performance and success of their business, this same understanding does not always translate into meaningful social action. (shrink)

The ethical behaviour and social responsibility of private companies, and in particular large corporations, is an important area of enquiry in contemporary social, economic and political thinking. In the past, a company's behaviour would be considered responsible as long as it stayed within the law of the society in which it operated or existed. Although this may be necessary, it is no longer sufficient. In this paper, we examine an energy company's response to an ethical incident in New Zealand which (...) prompted different responses across the country about the role of business in society. Thus, we argue that when a corporation is accused of unethical behaviour, executives of the company are usually compelled to offer responses to defend their actions and corporate image. Further, we use communicative response model, social issue life cycle theory, and organisational learning, to analyse the incident and how the company responded. Using social issues life cycle theory and organisational learning theory, we demonstrate that sustained pressure can potentially trigger a change of strategy that may serve to improve the ethical posture of a corporation and thereby improve the corporate image long term. We conclude that, although corporations may understand the significance of social issues to the performance and success of their business, this same understanding does not always translate into meaningful social action. (shrink)

We ask what type of neutralization techniques corporations apply to allegations of human rights abuses. We proceed by undertaking a Qualitative Content Analysis of 162 responses by ten extractives-sector firms over a period of 14 years. The firms were responding to accusations of human rights impacts documented by the Business and Human Rights Resource Centre. We use Garrett et al.’s :507–520, 1989) framework of neutralization techniques consisting of denial, justification, concession and excuse to examine the responses. During our QCA, we (...) observed emerging themes around self-promotion and evasive tactics. We contribute to existing literature by proposing ‘evasion’ as a novel neutralization technique, particularly in circumstances of corporate responses to accusations of wrongdoing. We argue that evasion occurs when firms refuse to engage in the debate brought forward in an accusation. In addition, we enrich our understanding of neutralization techniques by proposing subneutralization techniques in our analysis to diverge from that of other studies. We conclude by discussing the implications of the predominance of corporate narcissism and evasive neutralization techniques to the business and human rights movement and other international corporate responsibility standards. (shrink)

Business Ethics: A European Review, EarlyView.