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This paper aims to introduce the implicit firm theory, distinguishing between the belief that firms can (incremental firm theory) or cannot (entity firm theory) readily change in response to marketplace demands. It is proposed and shown, that firm theory beliefs influence customer-engagement attitudes and intentions.

Study 1 tests the relationship between firm theory, self-theory and knowledge-sharing attitudes. Study 2a tests differences between incremental and entity firm theorists in response to firm failure. Study 2b examines the relationship between firm theory and blame attributions on post-failure loyalty. Study 3 explores the effect of firm theory on perceptions of control and blame attributions following repeated firm failures.

Study 1 shows firm theory influences consumer knowledge-sharing attitudes beyond the effect of self-theory. Study 2a shows incremental firm theorists are more likely to remain loyal to a firm following failure and less likely to share negative word-of-mouth. Study 2b shows that blame attributions mediate the relationship between firm theory and loyalty intentions, with incremental theorists ascribing less blame. Study 3 shows incremental firm theorists significantly increase blame following multiple failures, while entity firm theorists do not.

Results are based on scenario-based surveys and experimental methods; their applicability in more complex real-world customer-firm relationships warrants additional study.

Firms should account for a customer’s firm theory in their communications, emphasizing situational factors to reduce post-failure blame among incremental firm theorists.

Establishes that consumers hold beliefs regarding the malleability of firm traits, which influence their firm engagement intentions.

This paper aims to investigate the influence of implicit self-theories and the change in CEO of a firm after product failure on consumers’ preference of the enhanced product.

Three experiments were conducted involving product failure and CEO change scenarios.

Studies demonstrate that incremental theorists prefer the enhanced product after the CEO change (vs no change), whereas entity theorists do not prefer the enhanced product after the CEO change. This effect is mediated by consumers’ perception of the likelihood of success of the firm after the CEO change. Furthermore, entity theorists prefer the enhanced product only when the CEO change is external (vs internal).

Future research could investigate if the impact of CEO change on product perception depends on the severity of the situation, and identify boundary conditions under which the CEO change is not beneficial.

The results suggest that organizations can take advantage of the leadership change by introducing new products strategically around the period of leadership change. Marketers can induce incremental mindset in their advertisement material during the period of leadership change to ensure that all consumers have a positive perception of the enhanced products.

This is the first research to investigate how consumers respond to leadership changes made by organizations. The findings show that different signals (internal vs external CEO change) can generate different reactions across different receivers (incremental vs entity theorists).

Research on vertical line extensions shows that consumers tend to evaluate upward extensions higher than downward ones. This paper examines the opposite situation. It also investigates the process underlying consumer responses by identifying a moderator and mediators.

Two studies were conducted to assess the effect of extension direction (upward vs downward) on consumers' extension evaluations. Study 1 incorporated implicit theories of relationships (the growth belief) as a moderator and inferred motives for launching a vertical line extension as mediators in the effect. Study 2 presented a firm's rationale for undertaking the extension to examine whether it influenced evaluations.

Consumers' preferences for downward over upward extensions appeared in markets where the exclusivity of luxury brands had been reduced. However, the resistance to upward extensions was weaker when consumers endorsed stronger growth beliefs in human relationships. Consumers inferred customer- and selling-oriented motives more strongly from downward than upward extensions, enhancing the evaluations. Finally, when presenting a rationale for launching an extension in the launch announcement, customer-oriented reasoning raised the evaluations higher than selling-oriented reasoning but did not elevate the evaluations higher than the announcement showing no reason.

This study advances the literature on vertical line extensions and shows that consumers' preference for upward over downward extensions is not universal. The opposite pattern exists in markets with a lower distinction between high- and low-end brands. It supports the theoretical notion that responses are driven by the differences in growth belief and in cognitive inferences vis-à-vis motives.

This paper aims to explore the impact of an overlooked variable, brand personality, as a basis for brand forgiveness and recovery following brand failures.

Data were collected via three on-line surveys using Amazon Mechanical Turk, including a total of 475 respondents (125, 113 and 237) and using a 2 × 2 between-subjects factorial design.

Results show that a brand’s dominant personality (warm vs competent) elicits different expectations regarding brand performance, and that surprisingly, consumers more readily forgive, rather than censure, brand failures which violate their expectations. Further, this effect exists independent of the consumer’s relationship with the brand. These findings occur across different brands (both fictitious and real), manipulations of brand personality and brand failure-type and indices for brand forgiveness. Results indicate the interactive effect of brand personality and failure-type was mediated by brand credibility, while consumers’ desire to re-evaluate the brand served as a moderator.

This research demonstrates that while brand failures are largely considered from a negative perspective, brand personality can serve to bolster consumer perceptions of brands post-failure. Further, and separate from strong consumer-brand relationships, brand personality serves as an important signal for consumer expectations and plays a pivotal role in post-failure forgiveness and behavioral intentions.

This study contributes to the literature by introducing and testing the role brand personality plays, independent of an existing and strong consumer-brand relationship, in consumer response to brand failure. Further, the mediator of and a moderator for this effect are identified.

This systematic literature review aims to identify how literature approaches motivations for committing fraud in financial statements and presents a framework on these motivations in the light of organismic integration theory (OIT).

Therefore, initially, 251 articles were analyzed. Through a systematic review of the literature, 25 were submitted to content analysis.

The findings suggest that the OIT explains motivational processes neglected by traditional theories, such as the fraud triangle and agency theory. Both theories consider that all human beings are utilitarian by nature. The authors expect that the better we understand the motivational factors that contribute to the large-scale endorsement of immoral behavior, it would be easier to prevent accounting fraud incidents.

This work went to the limit of the proposition of premises; however, other authors can be to advance to the empirical tests.

So, different people have different motivations for committing fraud. For this reason, it is important that organizations, auditors, regulatory and professional bodies that are engaged in combating such dysfunctional behaviors seek to know more deeply whether people are more externally or internally motivated.

This recognition will make it possible to design adequate rules and controls, rather than assuming that everyone is equal, and will be discouraged from committing fraud only when there is a severe punishment associated with it.

This study adds to the stream of scholars who analyze fraud from a broader perspective than the assumption that all beings are rational and seek to maximize their well-being. However, to the best of the authors’ knowledge, this is the first study to analyze the phenomenon of fraud from the perspective of the OIT.

Despite significant theoretical work over the past decade, the phenomenon of trust and the process of its development in managerial relationships remain elusive in theory and practice. This paper revisits theories that frame trust development in order to explore the development of trust in the specific social context of managerial relationships. Managerial relationships are often characterised by politics and the pursuit of hidden agendas and self‐interest. Competing perspectives and personal motivations can conspire to render even the most innocent of acts subject to scrutiny and suspicion. In these senses, high levels of trust are not commensurate with ideal conditions for managerial effectiveness. Examines the realistic possibilities for trust development set in the context of managerial relationships, and in the process of this analysis, creates a set of propositions that could inform further theory development and empirical investigation of the area.

This paper aims to examine the role of brand attachment as a relevant construct in customers’ evaluation after they face a service failure which impacts future consumer behaviors. It mainly answers the research question: does brand attachment cushion or amplify the effect of service failure on customers’ negative emotions?

A 2 × 2 × 2 experimental design was conducted. Data analysis was performed with ANOVA and moderated mediation.

Customer’s feelings toward a brand (brand attachment) that existed before a service failure occurred can regulate customer’s negative emotions especially when consumer attribute service failure to a controllable cause. This process minimizes the effect of service failure in customer’s satisfaction and consequently increase customer behaviors like word of mouth and loyalty intentions.

Adding perceived intentionality as a service failure’s attribution could provide another layer of explanation of customer behavior. Also, an expanded study using a sector characterized by higher cost of change and permanent consumption could provide result’s generalizability.

Brand attachment should be included in the customer service strategy. In a service failure situation, brand attachment becomes part of the “service customer policy” helping customers to regulate their negative emotions.

This study fills the knowledge gap regarding the role of customers’ positive emotions toward brands when a service failure occurs. The current study extends branding literature by differentiating brand attachment role from coping tactics.

This study aims to investigate the effect of brand transgression severity on different behavioral responses (BRs). In addition, the role of perceived brand betrayal (BB) is examined as a mediator between brand transgression severity and BRs.

A total number of 331 customers of Tehran travel agencies were recruited as the statistical sample. Partial least squares-structural equation modeling (PLS-SEM) using SmartPLS 4 software was used to analyze the collected data.

The results showed that the severity of brand transgression significantly affects perceived BB and customer BR, including avoidance and retaliatory behaviors. Moreover, the results showed that perceived BB has a mediating role in the relationship between brand transgression severity and reparatory and retaliatory behaviors.

This study adds to the understanding of consumer behavior by demonstrating how customers react to brand transgression severity through perceived BB.