Consumer Reaction to Negative Publicity

Abstract

Corporate crises often result in negative publicity, threatening the image of the company. The present study investigated the effects of company reputation for social responsibility prior to a crisis event, response to a crisis event, and responsibility for the event on overall consumer regard for the firm. The study is, in part, an experimental test of image restoration strategies conceptualized in the literature. Each of the three factors was found to exhibit a significant main effect. For the crisis scenario used in this study, responsibility explained the largest proportion of variance and response explained the least. An unexpected finding was that an inappropriate response by a “bad” company resulted in an increase in regard toward the firm, whereas the same response by a “good” company resulted in a decrease in regard for the firm.