How Can Companies Recover from Liability-Invoking Failures? Exploring the Role of Uncertainty Avoidance in Facilitating Consumer Compliance Across National Cultures

Abstract

A company often faces incidents in which its offerings cause bodily (e.g., product safety defects) or psychological (e.g., data breach) harm to its consumers. Such incidents may invoke product liability lawsuits against the company. The company may try to recover from the liability-invoking failure by notifying the affected consumers, offering a remedy, and persuading them to comply with the company message. The authors theorize and experimentally demonstrate that, on average, a prevention-focused message receives greater compliance than a promotion-focused message. Further, a prevention-focused message is more effective with consumers from high-uncertainty-avoidance cultures, whereas a promotion-focused message is more effective in low-uncertainty-avoidance cultures. Perceived compatibility of prevention or promotion goals with low or high values of uncertainty avoidance mediates the interaction effect on compliance. The findings can help companies overcome consumer apathy to product recall or data breach notices and offer managers ways to promote consumer safety and protection.

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