What do you have to say? : the struggle between institutional forces and managerial attempts to restore corporate image across crisis situations

予欲何言? : 不同危機與處境中, 管理層為保企業形象而對制度所作之鬥爭

Student thesis: Doctoral Thesis

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  • Yik Kiu LEE

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Awarding Institution
Award date2 Oct 2015


Purpose: Falling victims to organizations is an inevitable part of organizational life in postindustrial societies. Sometimes victims receive apologies and compensations; sometimes organizations offer explanations to rationalize their behaviors; oftentimes organizations respond uncooperatively and add insult to injury. The objective of this dissertation is to identify antecedents to uncooperative responses which bring further pains and hard feelings, as well as that to constructive responses which help victims suffer less or at least feel better. This dissertation also seeks to provide practical implications to encourage the general public and organizations taking their respective part in reducing sufferings stemming from firm responses and organizational crises basing on its findings. Design/methodology/approach: This dissertation first identified two types of firm responses, namely uncooperative ones and constructive ones after an extensive literature review, and specified stakeholders’ expectations on and possible reactions to firm responses, as well as managers’ preference for symbolic responses from an institutional and a strategic perspective on Legitimacy Theory respectively. I hypothesized types of firm responses which managers choose and institutional pressures which organizations face under different crisis situations, content analyzed newspaper reports covering image threats namely complaints, negative earnings surprises and sexual harassment cases, and tested the hypotheses with multilevel logistic regression models in Study 1 and logistic regressions in Study 2. Findings: Empirical results support most of my hypotheses. Organizations are 1) less likely to respond uncooperatively to investors affected by negative earnings surprises; and 2) more likely to respond uncooperatively to other stakeholders who complained. Moreover, 3) the positive relationship between complaints and uncooperative responses is weakened when organizations perform well; and 4) the negative relationship between negative earnings surprises and uncooperative responses is strengthened when organizations perform well. In scandals namely sexual harassment cases which may offend society at large, organizations are less likely to respond uncooperatively when 5) public awareness of sexual harassment is high enough; 6) the sexual harassment case is an isolated incident and 7) a law enforcement body endorses victims’ claims. In addition, organizations are more likely to respond constructively when the law enforcement intervenes. Research limitations/implications: Due to sample size, I did not apply multilevel analysis to Study 2; empirical results of Study 2 may not account for firm level variance which may contribute to managers’ choices of firm responses. Second, the hypothesized relationships between public awareness, isolated incident and constructive responses respectively are statistically insignificant. The fact that many organizations have already apologized, offered compensation, or promised corrective actions to sexual harassment victims internally may contribute to the unexpected findings, because these settled cases will never be reported in mass media and thus are unobservable in my sample. Originality/value: Most quantitative and mixed research on firm responses to crisis events focused on identifying types of firm responses and measuring their respective effectiveness; this dissertation, however, contributes to the understanding of antecedents to firm responses. Most research efforts on the antecedents to crisis events are case studies, characterized with hindsight biases, and sampling single organization or industry, single crisis type as well as atypical and extreme cases. The quantitative design of this dissertation addresses these limitations, and attempts to generalize findings across industries and crisis situations. Finally, my findings echo Suchman (1995)’s view that synthesizing both institutional and strategic approaches paints a more realistic picture of Legitimacy Theory. Keywords: Content Analysis; Crisis Communication; Image Restoration Strategies; Institutional Theory; Organizational Accounts; Organizational Legitimacy; Organizational Rhetoric

    Research areas

  • Crisis management., Corporate image