Not All Wrongdoing Companies Are Equal in the Public Eye

by | Jan 4, 2023

Corporate Crises
Corporate crises are extraordinary critical events in a company’s life that may lead to consumers’ physical and psychological harm, financial loss, or environmental damage. Such crises often receive much media attention and cause consumers to experience negative emotions or take actions against the wrongdoing company, such as boycotting it.

“As evidence of corporate social irresponsibility, corporate crises can result in severe retaliation against the companies at fault. Consumers may engage in various actions to punish an offending company (e.g., they may spread negative information about it and even boycott it).”

However, not all wrongdoers are equal in the public eye. Consumers may hold beliefs about an offending company that dictate if and how they respond toward it. In this research, we demonstrate that consumers’ prior beliefs about a company’s country-of-origin bias how they respond to a corporate crisis.

Although a substantial body of international marketing research has demonstrated that company’s or brand’s country-of-origin can shape consumer behavior toward companies and brands in non-crisis settings, little is known about the roles of country stereotypes in the context or corpororate crises.

“Country warmth refers to consumers’ cognitive appraisals of a country’s friendliness, cooperativeness, and trustworthiness. Consumers tend to perceive a country with cooperative, trustworthy intentions as warm and a country with antagonistic, competitive intentions as cold.”

To address this gap in the international marketing literature, we theorize and empirically test (1) the effects of the country stereotype of warmth on consumers’ condemning emotions and retaliatory intent, (2) the underlying psychological mechanism through which these effects occur, and (3) the role of crisis type as a crucial contingency factor.

Three experimental studies show that country stereotypes of warmth – but not of competence – can buffer consumers’ condemning emotions and retaliatory intent toward a wrongdoing company and that the psychological mechanism of greed attributions explains this bias. Furthermore, we demonstrate that the type of crisis acts as a crucial contingency factor that facilitates (corporate ability crisis) or suppresses (corporate value crisis) the buffering effect of country warmth.

Full reference: Barbarossa, Camilla and Timo Mandler (2021), “Not All Wrongdoers are Equal in the Public Eye: A Moderated Mediation Model of Country Stereotypes, Condemning Emotions, and Retaliatory Intent in Corporate Crises,” Journal of International Marketing, 29 (2), 26–44.

Cite for: Corporate crises, ability crisis, value crisis, corporate greed, country-of-origin, country stereotypes, warmth and competence, asymmetric effects, condemning emotions, retaliation, boycotting, word-of-mouth, second-order constructs, rigorous pretesting

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