Firm response, action visibility and consumers’ legitimacy judgment

Zhimei Yuan · Yi Guo · Xingdong Wang

11 citations0/0 files storedAmerican Journal of Business

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Public Relations and Crisis Communication Corporate Social Responsibility Reporting Corporate Identity and Reputation

Abstract

Purpose 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. Design/methodology/approach Scenario-based mixed design experiments were employed and 718 valid responses were collected. Findings 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. Research limitations/implications 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. Practical implications This study provided executives or managers with optimal, suboptimal and least optimal response strategies under different levels of action visibility. Originality/value 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.

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References

1995Managing Legitimacy: Strategic and Institutional Approaches 1994The Persuasion Knowledge Model: How People Cope with Persuasion Attempts 2004Political turnover and economic performance: the incentive role of personnel control in China 1990The Double-Edge of Organizational Legitimation 2000Media Reputation as a Strategic Resource: An Integration of Mass Communication and Resource-Based Theories 2011Toward a Theory of Social Judgments of Organizations: The Case of Legitimacy, Reputation, and Status 2000Consumers' Use of Persuasion Knowledge: The Effects of Accessibility and Cognitive Capacity on Perceptions of an Influence Agent 1992ACQUIRING ORGANIZATIONAL LEGITIMACY THROUGH ILLEGITIMATE ACTIONS: A MARRIAGE OF INSTITUTIONAL AND IMPRESSION MANAGEMENT THEORIES.

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