How do companies repair their reputation after scandals?

$1,503
Raised
115%
Funded on 5/25/16
Successfully Funded
  • $1,503
    pledged
  • 115%
    funded
  • Funded
    on 5/25/16

About This Project

Companies affiliated to the same business group can be subject to shared reputation loss, such as Audi and Porsche of Volkswagen Group with the emission scandal. However, how can a company repair its own reputation when it is negatively affected by a scandalous event of another company, especially in a business group without exiting options? The project aims to examine how a company can use different strategies to effectively restore its reputation after a crisis of another related firm.

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What is the context of this research?

A company’s reputation can be affected by other companies due to a shared characteristic, such as being in the same industry, having a partnership, or belonging to the same business group. When one company performs a deviant act, such as Audi with the emission scandal, not only does it suffer reputation loss, but also a related company like Porsche may suffer due to common affiliations to the Volkswagen Group. The negative reputation of the deviant company can spillover to another company through their shared characteristics. To repair such reputation loss, a focal company can adopt passive actions by severing the connection and distancing from the deviant company or proactive actions by initiating activities, such as donations or sponsorship, to improve its own reputation.

What is the significance of this project?

Although a company can have different strategies to address the reputation loss resulting from spillovers from other companies, most studies focused on passive distancing strategies, such as disengaging or exiting from the industry. However, companies affiliated to the same business group do not have such discretion to freely sever the connections. This project intends to examine how a company of a business group can effectively repair its reputation affected by the other affiliated company of the same group through proactive, instead of passive, strategies. The project is critical to both organizational members and the general public to understand the reputation repair process that needs to consider the dynamic between the deviant company and the related company.

What are the goals of the project?

This project will use survey experiments by recruiting random individuals to answer different questionnaires with simulations on corporate events and activities. The funds will be used to recruit and compensate participants. There will be three experiments. In each experiment, participants will randomly be assigned to different questionnaires in which the focal and the deviant companies may take different actions to improve their reputation. The corrective actions will differ in their degrees of relatedness to the deviant act. All experiments will have different types of deviant acts to test the generalizability of the findings. The project will examine whether people will have different evaluations and behavioral intentions when the focal and deviant companies have different actions.

Budget

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The budget will cover all the expenditure to recruit and compensate participants of the experiments. The experiments include lab and field experiments. The recruitment of participants for all the experiments requires monetary incentives. Participants will be compensated for answering the questionnaires with simulated scenario adapted from real corporate events and business group. The compensations will ensure quality inputs and valid findings of this project.

Endorsed by

I am very enthusiastic about Josh's timely project and I endorse it fully. Josh focuses on the exciting topic of negative spillovers from corporate reputation damage within family firms where such stigma might be particularly acute. He has the opportunity with this project to derive strategic recommendations for managers of firms facing reputational damage. His experiments were designed with great rigor as Josh has developed a real expertise in the methodology. I am positive he can run the project with success and produce impactful research!
I strongly endorse this experiment for several reasons. First, the topic is extremely important economically. Many companies are affiliated with one another, whether formally or informally, so it is important to understand how one company can rebuild its reputation after a scandal by another, associated company. Second, the experiment is very well designed, and Josh is an extremely competent experimentalist. He is careful, precise, and very persistently pursues rigor in his research. Let's help him do this experiment!
This is a truly fascinating project on a burning topic for companies. Repairing company reputation after a scandal, in particular if the scandal was caused by a different organizational entity, is vital to a firm. Wei-Jun Hsueh, my PhD student at Bocconi U., designed an extremely rigorous and creative experimental project that will significantly advance our knowledge on reputation repair, and that will offer important practical advise to managers involved in repairing reputation damages that may otherwise significantly harm the company involved

Meet the Team

Josh Wei-Jun Hsueh
Josh Wei-Jun Hsueh
PhD Candidate

Affiliates

Bocconi University
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Chun-Yi Peng
Chun-Yi Peng
Instrutor

Affiliates

City University of New York
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Team Bio

Josh and Jerry are working on corporate reputation management by looking at the corporate strategies and communication. Josh is a managerial scholar and Jerry is a linguistic scholar. Together, they examine the effectiveness of corporate reputation strategy in expressing and convincing general public of the corporate value. We both use experimental methods, including lab, field, and on-line experiments, to examine the effects of corporate strategy and language on individuals.

Josh Wei-Jun Hsueh

Josh Wei-Jun Hsueh is a PhD candidate in Business Administration and Management at Bocconi University. He has his Master of Science in Global Business and Stakeholder Management at Erasmus University, and Bachelor in International Business at National Taiwan University.

His research focuses on corporate reputation and identity based on corporate social responsibility (CSR) in the context of family businesses. He mainly uses survey experiments to examine how general public and employees respond to companies’ different CSR strategies and activities with their perception, attitude, and behavior. He has presented his works at different international conferences, including Academy of Management Annual Meeting, European Academy of Management Conference, Informs Annual Meeting, and Positive Organizational Scholarship Research Conference.



Chun-Yi Peng

Chun-Yi Peng is an instructor in Modern Language Department at Borough of Manhattan Community College- CUNY. He received his PhD in Linguistics from the Graduate Center of CUNY and MA in Linguistics from Michigan State University.

He draws upon both quantitative and qualitative methods to investigate the ideological perceptions of different varieties of Mandarin. He also worked on how Chinese learners process relative clauses using eye-tracking. His works have been published in two books and been presented at several conferences, including International Symposium on Chinese Teaching and Learning, North American Conference on Chinese Linguistics, New Ways of Analyzing Variation, and Annual Second Language Research Forum.

At CUNY, he has taught both linguistics and Chinese, including introduction to Language, Elementary Modern Chinese, Language and Culture, Dialects across Cultures, and Modern Chinese literature.


Project Backers

  • 21Backers
  • 115%Funded
  • $1,503Total Donations
  • $71.57Average Donation
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