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This paper aims to examine whether firms in polluting industries improve their environmental performance to effectively repair their financial reputation in the aftermath of an accounting restatement – a financial reputation-damaging event.

The authors test their hypotheses using multiple regression analysis of a sample of firms listed in International Financial Reporting Standards (IFRS)-adopting countries. They use a comparative empirical design in which a sample of firms that underwent a restatement (henceforth, restating firms) are compared with control groups of pair- and multiple-matched firms that did not undergo restatements (non-restating firms).

The study finds that restating firms have higher environmental performance in the aftermath of restatement events. Additionally, the authors demonstrate that this environmentally based reputation repair positively influences the financial reputation of the firms, as measured by analyst coverage and recommendations and which previously decreased because of the restatement event.

Because environmental levers are a substantial contextual factor in polluting industries, shifting the stakeholder debate to firms’ environmental commitment can improve financial stakeholders’ opinions and favour the repair of the multifaceted reputation of the financially damaged firm.

With a worldwide growing attention to environment there is a critical need for understanding how polluting firms integrate sustainability and financial reputation. We demostrate that polluting firms recover from a financial failure pursuing their environmental performance.

Contributing to the behavioural theory of reputation repair and in line with the legitimacy perspective in environmental disclosure research, this paper shows that polluting firms recover from a loss to their financial reputation by diverting stakeholders’ attention towards the environmental field, thus restoring their financial reputation, as financial analysts value environmental performance improvement – a substantial contextual factor of polluting firms’ reputation repair process.

This paper aims to determine the influence of travel fair selection factors on exhibitor intention to attend, in conjunction with the role of political risk within that relationship.

Following the basic premises of image repair theory, this quantitative study examines the perceptions of 205 exhibitors – both domestic and international – at Belgrade Travel Fair.

Two variables – travel fair customer acquisition and retention orientation and market orientation – were found to influence travel fair intention in a statistically significant manner, while multi-group structural equation modeling indicates a positive statistically significant correlation between travel fair customer acquisition and retention and travel fair market orientation and travel fair intention for exhibitors that place higher importance on political risk in the region.

The limitations of the research are its regional focus and its small sample size.

Travel fair organizers should consider market orientation and customer acquisition and retention orientation as important antecedents of travel fair intention. Exhibitor perception of political risk enhances image repair efforts.

The study focuses on the perception of travel fair exhibitors when attending a travel fair in a region which is continually exposed to political risk. Thus, travel fairs can act as image repair instruments for companies affected by political risk in a region, as they have the capacity to present a positive image to a specific audience.

The study enhances the existing work related to image repair theory by observing how travel fairs can be used as image repair instruments. The originality of the study lies in its provision of further understanding of the reasons for exhibitor attendance at travel fairs and, more specifically, the role of political risk in this context. The study’s findings extend the applicability of the image repair theory in the context of the behavioral nature of travel fair attendance.

Based on the assumption that the identity and self-understanding of an academic discipline determines how it conceptualizes different domains of social reality, including how it imports and/or exports concepts from or to other disciplines, this chapter presents some of the findings of a major ongoing comparative and cross-disciplinary study of how five key concepts within the combined fields of crisis management and reputation management are applied in three different disciplinary contexts. In this chapter, however, the focus is on just one of these concepts: the concept of reputation.

In 2015, Malaysia’s investment vehicle, 1Malaysia Development Berhad (1MDB), came under international scrutiny after it amassed a debt of US$11 billion (10.3 billion) (Wright & Clark, 2015), which it had difficulty repaying. More disturbingly, investigators found that US$700 million (658 million) was transferred into the personal bank account of Malaysia’s prime minister, Najib Razak, founder and chairman of 1MDB’s advisory board (Wright & Clark, 2015). Najib was also accused of embezzling state money (Reuters, 2015) and damaging the image of the country (“Najib tried to bribe me”, 2015). This chapter aims to examine the strategies used by the Malaysian prime minister to repair his image in the 1MDB scandal, the effectiveness of these strategies, and how these impacted Malaysia’s public diplomacy efforts in restoring the country’s image and reputation. Findings showed that the prime minister denied wrongdoing, and simultaneously bolstered his position and promised to turn 1MDB around. In contrast to the current explication of Benoit and Pang’s (2008) image repair strategies, Najib’s way of attacking the accusers sheds light into how image repair strategies may be operationalized in the Asian context. A new image repair strategy – diversion – is proposed to be added to the existing framework.

This study aims to investigate the effects of firm characteristics and crisis characteristics on remedies offered to consumers by firms in the event of a product recall crisis.

Published data on 868 product recalls in the US toy industry from 1988 to 2011 have been used to investigate the effects of firm experience in product recalls, type of firm (company versus intermediary) and product recall severity in predicting remedies offered to consumers in the event of a product recall.

The findings show that firm recall experience, firm type and recall severity are negatively associated with recall remedies offered. Specifically, firms offer lower remedies if they have higher recall experience, if they are upstream firms in the supply chain (farther from consumers) and if the recall is more severe.

This study focuses on the toy industry and does not consider product complexity, firm reputation and the role of external regulatory agencies in the prediction of remedies offered by firms. Future research may extend this study to include the above factors.

Offering a high remedy to consumers of a recalled product may be a responsible decision by a firm, but it may also attract shareholder wrath. The study has implications for managing multiple goals in product recall crisis management.

Studies focused on issues of interest to consumers during a recall crisis, such as swift recalls and appropriate remedies, are limited. This study contributes to the understanding of the antecedents of recall remedies.

Purpose – We delineate how the concept of reputation has been used in different literatures. We develop some formal definitions of observers and reputation that bring together the different literatures. We then ask how noncooperative or “bad” reputations might be repaired. Based on the developed definitions and past research, we suggest some possibilities for reconciliation. We also work on developing an experimental paradigm to investigate reputation.

Methodological/Approach – We review research from different disciplines, develop definitions, and design an experiment.

Findings – We suggest that, under certain conditions, group reconciliation can occur. However, these conditions are quite specific.

Practical Implications – When the goal is to solve a social dilemma, reconciliation is an important part of the process. Without reconciliation, group integration is problematic.

Social Implications – Reconciliation can be a powerful process that encourages cooperation. We suggest some ways that reconciliation might be possible.

Originality/Value of the Chapter – This chapter suggests a new formalization to connect different conceptualizations of reputations.

As Chinese imported cross-border e-commerce has entered a stage of rapid development, the problem of consumer shopping risk is increasingly prominent and the crisis of consumer trust is intensified. The theory of establishing consumer trust in traditional online shopping can no longer meet the need of cross-border context.

The researchers used the methods of network logs and grounded theory. The data collection and analysis are conducted on consumer comments from Tmall Global, NetEase Koala and JD Worldwide in the product comment area. This article explored and extracted the moderating variables of consumer perceived risk and cross-border characteristics in cross-border e-commerce. Based on the theory of “perceived risk – consumer trust – consumer purchase decision – making,” this article deduced mechanism of consumer dynamic trust based on the whole process of cross-border e-commerce transaction.

In the prepurchase, purchase and postpurchase stages of cross-border e-commerce transactions, consumers' perceived cognitive risk, transaction risk and utility risk are moderated by the cultural distance, geographical distance and institutional distance caused by the cross-border transaction subjects. On this basis, the preinfluence factors of trust in each transaction stage are synthesized to respectively influence the establishment of cognitive trust, emotional trust and behavioral trust, so as to affect consumers to make the order payment, confirm receipt and praise repurchase decisions. At the same time, with the advance of prepurchase, purchase and postpurchase transactions in cross-border online shopping, consumer trust presents a dynamic evolutionary path of “cognitive trust – emotional trust – behavioral trust.”

This article expands the application context of the theory of consumer rational behavior from traditional online shopping to the context of cross-border online shopping and expands the scope of interpretation of the theory of consumer rational behavior. This article also supplements the theoretical gaps in the dynamic evolution of consumer trust in cross-border online shopping, enriches the decision-making process model of consumers in the context of cross-border online shopping and provides new ideas for follow-up research.

This paper aims to report the results of an experiment undertaken to investigate the effect of country of origin (COO) in shielding the company’s image and retaining the trust and supportive behavioural intentions when it faces a crisis and the interactive effect of COO and the company’s pre-crisis reputation in shielding the company’s image.

A quasi-experimental study was undertaken to test the proposed hypotheses. Specifically, a two (pre-crisis reputation: low versus high) × two (country of origin: Indian versus Non-Indian) between-subjects factorial experimental design is configured and operationalized.

The results demonstrate that COO of a company fails to protect trust and supportive behaviour on its own, but, in the presence of a high pre-crisis reputation, it shields trust in the company more effectively. However, the interaction of COO and reputation does not induce supportive behaviour for the company during a crisis.

The findings of this research may help organizations to enhance trust/supportive behaviour toward their brand/company using attributes such as COO and pre-crisis reputation of the company.

The importance of trust in student–university relations is relevant not only for the quality of the educational process and the satisfaction with studying achieved by students, but also for the importance of positive evaluation of HEIs to others. Therefore, the aim of this study is to identify the stages and mechanisms that build trust in student–university relations, the causes of trust violation and trust repair practices.

Public university students from Poland (16) and Germany (12) took part in the study based on semi-structured interviews. The research procedure followed an inductive approach. In addition, the critical events technique was used to identify trust violation and trust repair practices.

The study identifies the stages of the HEIs trust building process and the mechanisms upon which it is built. It attempts to catalogue trust violations, distinguishing three groups of “perpetrators” and categories of their differentiation in terms of their impact on trust. The study indicates ad hoc, informal methods of trust repair applied at HEIs and their conditions.

This study provides useful guidance for managers on how to build and maintain trust in HEIs.

The issue of trust building in HEIs is relatively new and therefore has not been sufficiently recognised to date. This study is the first to the author's knowledge to comprehensively address the problem of trust building, pointing out the mechanisms on which the formation of trust in HEIs is based. This study provides a novel contribution to the limited literature on trust violation and trust repair in HEIs.

This paper aims to contribute to the understanding of the mechanisms that evolve during reputational scandals and lead to changes in industry regulation. It explores the processes by which a demand for external industry regulation evolves, also addressing the consequences of firms’ competitive behaviors which lead to substantial misbehavior and the destruction of reputational capital. The authors are interested in whether and how regulatory activities – in the case analyzed here, changes in insurance regulation regarding sales commissions for insurance brokers – are used as a costly, external behavioral control mechanism (third-loop learning) to terminate a reputational scandal that cannot be stopped by internal controls at a firm level (first-loop and second-loop learning) anymore.

The paper explores a real-life case in the German insurance industry that peaked in 2012 and has been well documented by broad media coverage, complemented by interviews with leading industry representatives. Using causal process tracing as a methodology, the authors study the factors in the case that led to an industry scandal. The authors further analyze why the insurance firms involved were not able to limit the scandal’s impact by internally controlling their behaviors, but had to call for external regulation, thus imposing costly restrictions on sales and contract processes. To identify the mechanisms underlying this result, theories from the fields of economics (game theory) and sociology (vicious cycle of bureaucracies), as well as organizational learning theory, are used.

The authors find that individual rationality does not suffice to prevent insurance firms from scandalous business practices, e.g. via implementing appropriate internal behavioral control measures within their organizations. If, as a result, misbehavior leads to reputational scandals, and the destruction of reputational capital spills over to the whole industry, a vicious cycle is set in motion which can be terminated by regulation as an externally enforced control mechanism.

This study is limited to the analysis of a single case study, combining published materials, e.g. broad media coverage, with interviews from representatives of the insurance industry. Nevertheless, the underlying mechanisms that have been identified can be used in other case studies as well.

The paper shows that if firms want to avoid increasing regulation, they must implement strong reputational risk management (RRM) to counteract short-term profit pressure and to avoid restrictive regulation imposed on the industry as a whole. Furthermore, it sheds light on the relevance of spillover effects for RRM, as not only employee behavior within an organization might lead to the destruction of reputational capital but also that from other firms, e.g. from elsewhere within an industry.

The paper contributes by emphasizing a direct causal link between corporate scandals, loss of reputation and regulatory change within the insurance industry. Furthermore, the paper contributes by combining economic theories with organizational theories to understand real-life phenomena.