How do companies repair their reputation after scandals?

Methods

Summary

This project will use survey questionnaires with different scenarios to examine how participants react differently. Each scenario is adapted from companies of a business group in real world which has experienced a scandal. The name and the description of the companies, events, and their actions will be modified to avoid participants' direct associations with the real companies and events to prevent the confounding effects of the real world information.

There will be three experiments in total to ensure the generalizability of the findings across different scenarios. Participants will be recruited from students on the campus for lab experiments and individuals through the panel services of market research companies. In each experiment, participants will be randomly assigned into a scenario in which the companies in the material will take specific actions. Participants will be asked to evaluate these companies based on the information they read. The project will compare participants' evaluations across scenario to examine which type of corporate actions, i.e., repair strategy, is most effectively in inducing participants' positive evaluation.

Challenges

The direct challenge of this project is the potential confounding effects of real world information when participants recognize which company or event the scenario is based on. To address this potential issue, this project will inform participants that all the information is hypothetical in the instruction. Additionally, it uses fictitious corporate names and modifies the event information in the case material to avoid participants' direct associations.

Pre Analysis Plan

The project will examine how the actions of a focal company and the deviant company of the same business group will determine the focal company's reputation after the scandal of the deviant company. It will examine the interaction effect of their actions, and the role of the group reputation in this dynamic process.