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Deals with the management of industrial crises, low‐probability, high‐impact events which typically affect companies involved in them, negatively. Specifically examines the role of three important factors, i.e. company’s reputation, the organizational response that it selects to adopt in order to deal with the crisis, and external effects that are faced during a product safety crisis. Emphasis is placed on determining the effects of an industrial crisis (caused by a harmful product) on the consumers’ attributions of company responsibility. It is shown that high reputation companies have generally an easier time dealing with industrial crises. In addition, companies faced with positive external effects and having voluntarily recalled the defects, are held the least responsible for the harm by consumers. Managerial implications are presented for high and low reputation companies involved in product safety crises, with emphasis placed on crisis prevention rather than mere reaction to it.

The purpose of this paper is to utilize co-query volumes of brands as relatedness measurement to understand the market structure and demonstrate the usefulness of brand relatedness via a real-world case.

Using brand relatedness measurement obtained using data from Google Trends as data inputs into a multidimensional scaling method, the market structure of the automobile industry is presented to reveal its competitive landscape. The relatedness with brands involved in product-harm crisis is further incorporated in empirical models to estimate the influence of crisis on future sales performance of each brand. A representative incident of a product-harm crisis in the automobile industry, which is the 2009 Toyota recall, is investigated. A panel regression analysis is conducted using US and world sales data.

The use of co-query as brand relatedness measurement is validated. Results indicate that brand relatedness with a brand under crisis is positively associated with future sales for both US and global market. Potential presence of negative spillovers from an affected brand to innocent brands sharing common traits such as same country of origin is shown.

The brand relatedness measured from co-query volumes is considered as a broad concept, which encompasses all associative relationships between two brands perceived by the consumers. This study contributes to the literature by clarifying the concept of brand relatedness and proposing a measure with readily accessible data. Compared to previous studies relying on a vast amount of online data, the proposed measure is proven to be efficient and enhance predictions about the future performance of brands in a turbulent market.

The purpose of this paper is to examine how the location of a firm’s headquarters and component sourcing impact a firm’s responsiveness in a product-harm crisis in local market.

The authors collected data on 1,251 vehicle recalls from 12 manufacturers, six in the USA, three in Germany, and three in Japan. All of the recalls occurred in the USA between 2002 and 2010. The time the product was first released into the marketplace was used as the starting point while the time the recall was initiated (if at all) was used to record the probability of the product recall over time. Specifically, a survival analysis with an accelerated failure time model was employed to examine the speed with which a product is recalled. The authors examined the impact of foreign composition using information provided by the American Automobile Labeling Act, which lists the proportion of each vehicle that is composed of domestic parts (USA/Canada) and foreign parts. Organizational characteristics (i.e. size, market share, assets, net income, and reputation) and recall size (i.e. number of affected vehicles) that might have an effect on time to recall were controlled for.

The authors found that firms headquartered outside the local market would take longer to issue a product recall than firms that were headquartered in the local market. Firm headquartered outside the local market can reduce the time taken to recall by sourcing parts from the local marketplace, rather than from abroad. Interestingly, even local firms are affected by the location of component sourcing, such that they take longer to issue a recall if they sourced parts from abroad.

Research in international marketing has examined the benefits of integration to firms, but has not studied the risks of integration. By highlighting the challenges of managing institutional differences and integration difficulties, the authors show that location of headquarters and the location from where components are sourced have an effect on firm responsiveness in product-harm crises. Further, the authors build on the global supply chain management literature that has shown the effect of upstream activities (i.e. foreign production) on downstream activities (i.e. product quality). Specifically, the authors show that upstream activities can not only affect product quality, but also the ability of firms to respond to those product qualities in a timely fashion.

The purpose of this paper is to examine the role of action visibility in moderating the relationship between firm response and individual legitimacy judgment. Since a firm may decouple its public commitment from its actual practice to cope with conflicting stakeholder interests, visibility is important for consumers to make judgment because it is difficult for them to observe a firm’s actual fulfillment of its public commitment to quality assurance after a product-harm crisis.

Scenario-based mixed design experiments were employed and 718 valid responses were collected.

The results indicated that, while acknowledging responsibility produced more favorable legitimacy judgment than denial, decoupling produced no better judgment than denial. However, higher visibility significantly amplified the effect size. Specifically, under the condition of high visibility, not only did acknowledging responsibility produce much more favorable judgment than denial, but so did decoupling.

This study provided empirical evidence that action visibility moderated the relationship between firm response and individual legitimacy judgment, thus complementing the literature on crisis management.

This study provided executives or managers with optimal, suboptimal and least optimal response strategies under different levels of action visibility.

Much of the extant research on response strategy for organizations to deal with product-harm crisis ignored the moderating role of action visibility. Past research on legitimacy judgment focused on organization. This paper combined firm response, action visibility and individual-level legitimacy judgment.

The purpose of this paper is to develop a multidimensional corporate social responsibility (CSR) crisis typology from the consumers’ perspective and to provide an agenda for future research.

Basic content-related dimensions for characterizing CSR crises from the consumers’ perspective are derived from a review of relevant static crisis typologies. Different types of consumer responses to negative CSR information are derived from various theoretical approaches. Dynamic process models of corporate crises are reviewed to assign various types of consumer responses to different crisis phases. Linking both static and dynamic approaches leads to a comprehensive consumer-oriented typology of CSR crises that is illustrated with examples.

A CSR crises typology is developed based on three consumer-related dimensions: the extent to which the company is attributed blame by consumers; the amount of perceived damage potential; and the perceived CSR relevance of the crisis situation. The combination of these dimensions results in eight different crisis types. For each of these crisis types, different forms of consumer responses are assigned that prevail in the so-called potential, latent and manifest crisis phase.

Future research could address the empirical review of the crisis typology presented, its refinement by considering various consumer and stakeholder segmentation approaches and the advanced dynamic analysis of CSR crises by including stakeholder characteristics that impact the diffusion of CSR-related negative publicity.

The results of this paper support early crisis detection and effective crisis management by identifying relevant target variables for crisis communication.

The typology developed enables a broad spectrum of CSR crises to be classified, including those that have been neglected in previous systematization approaches, such as CSR-related tensions, general sustainability crises and product-harm crises. Due to its theoretical foundation, this paper also contributes to a clearer demarcation of existing CSR crisis constructs.

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 high prevalence of product-harm crises (PHC) represents a continuing challenge to which firms sometimes react by announcing several smaller recalls (i.e. slicing) but at other times by announcing the recall of all faulty products at once (i.e. chunking). The slicing vs chunking phenomenon has not been identified by prior literature; this study aims to explore two research questions: Why do firms sometimes slice and other times chunk PHC? Do slicing and chunking affect firm performance differently?

The authors examined recall guidelines from the US National Highway Traffic Safety Administration (NHTSA) and conducted expert interviews as well as a quantitative analysis of 378 product recalls to determine the antecedents of slicing vs chunking. The authors further performed an event study to examine the impact of slicing vs chunking PHCs on firms’ financial performance.

The authors find that slicing vs chunking is not a deliberate strategy but rather the consequence of firms’ resource availability and constraints. Furthermore, the authors show that larger firms have a lower likelihood of slicing versus chunking. By contrast, larger R&D expenditures, and greater reputation, as well as larger recall sizes, increase the likelihood of slicing versus chunking. Finally, the results reveal that, compared to chunking, slicing PHC has a strong negative impact on firms’ stock value.

The authors relied on recalls in the US automobile industry. A possible extension would be to study the same phenomenon in other industries or other geographical areas. In addition, the results need to be generalized to other types of negative news that can be either decoupled (slicing) or coupled (chunking), especially negative news for which firms have more discretion regarding the timing of their announcements than for product recalls.

As shown by prior research (Eilert et al., 2017), firms should aim to announce recalls quickly in the wake of a PHC. Importantly though, the results indicate that speed should not come at the expense of comprehensiveness in identifying all defective products, so that only one recall is needed. As suggested by our findings about PHC, investors may react negatively to the slicing of other types of negative news; thus, the results suggest how to best communicate to external stakeholders during crises in general.

To the best of the authors’ knowledge, this is the first study that examines why firms sometimes slice and at other times chunk PHC and identifies the performance implications of these two types of recalls in response to PHC.

Image restoration theory has become a dominant paradigm for examining corporate communication in times of crises. However, much insight gleaned from scholarly research in this area remains descriptive – simply recounting how certain corporations or companies communicated during times of crisis – rather than prescriptive. Therefore, to provide more direct guidance to corporations and organizations, this paper offers the first empirical test of Benoit's five image restoration strategies vis‐à‐vis each other simultaneously within the context of a single crisis situation.

An experimental investigation that measures consumers' reactions to differentially manipulated crisis‐communication messages. Methods of data analysis include ANOVA and post hoc comparisons of means.

Results indicate that the strategy of reducing the offensiveness of the event consistently led to higher reputation‐related perceptions of a company than did the other four strategies – denial, evasion of responsibility, corrective action, and mortification – when implemented during a product‐harm crisis situation.

Findings have direct implications for corporate communicators and the organizations they represent in developing and implementing crisis‐communication strategies.

This paper offers an original test of all image restoration strategies within the context of a single crisis. In addition to providing clearer guidelines to practitioners, such inquiry also accelerates the transfer of image restoration theory from the realm of retrospection and description to that of prescription and inference.

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.

Marketing managers have strategic choices when forming brand alliances. One such choice is integration, defined as the extent to which the offering is a fusion in the form and function of the partner brands. The paper aims to investigate how integration affects consumer attribution of responsibility to brand alliance partners.

This paper builds on the previous study on brand alliances and attribution theory. Multiple experiments are used to test three hypotheses.

This research shows that consumers are sensitive to the level of alliance integration, which, in turn, affects attributions of responsibility for the joint offering. Consistent with attribution theory, results show that responsibility for each brand varies systematically by integration and lead brand status vis-à-vis the alliance: while consumers perceive both brands as equally responsible for higher integration brand alliances, responsibility attributions diverge in lower integration alliances based on whether the brand is the alliance host. This pattern also holds for product-harm events.

It is important to explore brand alliance characteristics and to date, the level of integration between the partners has not been considered from a consumer standpoint. Consumers are sensitive to the level of partner brand integration and this perception influences perceptions of responsibility.

Managers should be aware that the level of brand alliance integration and lead brand status lead to different attributions of responsibility, which is strategically important, as brands seek to take credit in positive contexts and avoid blame for negative events.

This paper explores brand alliances via the level of integration and leads brand status, which are key determinants of consumer attributions of responsibility.