An Examination of the Effectiveness of Crisis Response Strategies for Repairing Competence and Integrity Violations
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- Asia Marketing Journal
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- v.15 no.1
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- pp.129-154
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- 2013
Product-harm crises, which are connected to defective or dangerous products, are perceived as the most common threats to a company. Product harm crises can distort long standing favorable equality perceptions, tarnish a company's reputation, cause major revenue and market-share losses, lead to costly product recalls, and devastate a carefully nurtured brand equity. However, in spite of the devastating impact of product-harm crises, little systematic research exists to asses its marketing consequences. So, the purpose of this study is to investigate how Koreans react to the crisis response in the aftermath of different crises(competence violation vs. integrity violation) and inspire additional research in crisis communication. This study has three main findings which run counter to the assumptions of Kim et al.(2007). Namely, the current study expands on the research of Kim et al. (2004, 2007) by examining how companies repair customers' trust and corporate attitude after crises. Different from previous studies, this study assumes that apology for an integrity-based crisis is the most appropriate way to repair consumer trust and corporate attitude. As for competence-based crisis, similarly, apology for competence-based crisis can be more successful repairing consumer trust and corporate attitude. Concerning silence strategy, remaining silent dose not admit or deny guilt right away, but instead of asking the perceiver to withhold judgment, suggesting that, silence could be expected to be superior to apology but inferior to denial. Finally, apology for competence violation will be expected to bemore effective than apology for integrity violation. Research conceptual model was as follows: According to the results, apology is found to be the most effective strategy to repair corporate attitude no matter the crisis is perceived as a violation of competence or integrity. Second, company may consider keeping silent as a desirable response because they does not admit nor deny responsibility but ask the public to withhold judgment. However, the result of this study shows that, in the overall crisis situations, silence strategy did not differ significantly from the denial strategy, which suggested that the public wants explanation instead of uncertainty. Third, there was the interaction effect between crisis type and crisis response strategies. In this study, apology is more effective for the competence violated situation in terms of regaining consumer trust and repairing their attitude toward company, while the apology's effectiveness is lower for the integrity-violated situation. More specifically, when the crisis is perceived due to company's lack of ability(competence violation), consumer's trust belief and attitude toward the company is more easily to repair when the company issued a sincere apology. Damaged product is perceived less intentional so participants are more likely to give the company second chance when they apology to the public. By contrast, exaggerated advertisement(integrity violation) is perceived intentionally and thus makes participants angrier toward the accused company. Although apology is perceived as the most effective strategy, when issuing apology, it also means the company admitted their intention. Therefore, in this kind of crisis situation, trust repair needs not only a sincere apology but additional efforts.
The purpose of this study is to explore how the flow of discourse move and their reasoning process in dialogic argumentation during group modeling on excretion. Five groups of three to four students in the second grade of a middle school participated in the modeling practice of a Gifted Center. Analysis was conducted on argumentation during the modeling activity in which students should explain how the waste product (ammonia) leaves the body. It was found that there was a sequential argumentative process-tentative consensus, solving the uncertainty, and consensus. There were several discourse moves - 'claim' and 'counterclaim' in the stage of tentative consensus, 'query' and 'clarification of meaning' in the stage of solving the uncertainty, and 'change of claim' in the stage of consensus. Students participated in the dialogic argumentation by constructing argument collaboratively for reaching a consensus. Critical questioning in the stage of solving the uncertainty and reasoning in the stage of consensus were the impact factors of dialogic argumentation. By answering the critical questions, students changed their claims or suggested new claims by defending or rebutting previous claims. Students justified group claims with diverse argumentation scheme and scientific reasoning to reach a group consensus. These findings have implication for science educators who want to adopt dialogic argumentation in science classes.
The Moderate Resolution Imaging Spectroradiometer (MODIS) regularly provides the eight-day gross primary productivity (GPP) at 1 km resolution. In this study, we evaluated the uncertainties of MODIS GPP caused by errors associated with the Data Assimilation Office (DAO) meteorology and a biophysical variable (fraction of absorbed photosynthetically active radiation, FPAR). In order to recalculate the improved GPP estimate, we employed ground weather station data and reconstructed cloud-free FPAR. The official MODIS GPP was evaluated as +17% higher than the improved GPP. The error associated with DAO meteorology was identified as the primary and the error from the cloud-contaminated FPAR as the secondary constituent in the integrative uncertainty. Among various biome types, the highest relative error of the official MODIS GPP to the improved GPP was found in the mixed forest biome with RE of 20% and the smallest errors were shown in crop land cover at 11%. Our results indicated that the uncertainty embedded in the official MODIS GPP product was considerable, indicating that the MODIS GPP needs to be reconstructed with the improved input data of daily surface meteorology and cloud-free FPAR in order to accurately monitor vegetation productivity in Korea.
One of the most important types of Customer Empowerment Strategy (CES) is select empowerment, where firms allow customers to vote on a product to be marketed. However, there is limited research on the advantages and disadvantages of select empowerment. In particular, there are few studies on the composition of a voting system. This study analyzes customer participation behavior, such as willingness to vote and strategic voting (i.e., voting for candidates not based on utility orders), under the different voting systems: 1) the number of votes per customer (single or multiple), and 2) the number of final choices (single or multiple). Uncertainty is proposed as a mediator that links the voting system difference and customer participation. Two research hypotheses are tested using multiple linear regression analysis and a natural effects model based on data from two online experiments. As a result, the multiple voting system (i.e., multiple winners are selected by customer votes) shows a direct positive effect on willingness to vote and strategic voting behavior. In addition, the result shows that uncertainty insignificantly mediates the relationship between the voting system and customer participation. Academic and managerial contributions are discussed with several future research directions.
Overview of Research: Product availability is one of important competences of store to fulfill consumer needs. If stock-outs which means a product what consumer wants to buy is not available occurs, consumer will face decision-making uncertainty that leads to consumer's negative responses such as consumer dissatisfaction on store. Stockouts was much studied in the field of academia as well as practice in other countries. However, stock-outs has not been researched at all in Marketing and/or Distribution area in Korea. The main objectives of this study are to find out determinants of consumer responses such as Substitute, Delay, and Leave(SDL) when consumer encounters out-of-stock situation and then to examine the effects of these factors on consumer responses. Specifically, this study focuses on situational characteristics(e.g., purchase urgency and surprise), store characteristics (e.g., product assortment and store convenience), and consumer characteristics (e.g., brand loyalty and store loyalty). Then, this study empirically investigates relationships these factors with consumers behaviors such as product substitution, purchase delay, and store switching.
Brown and Dacin (1997) have investigated the relationship between corporate associations and product evaluations. Their study focused on the effects of associations with a company's corporate ability (CA) and its corporate social responsibility (CSR) on consumers' product evaluations. Their study has found that both of CA and CSR influenced product evaluation but CA association has a stronger effect than CSR associations. Brown and Dacin (1997) have, however, claimed that there are few researches on how corporate association impacts product responses. Accordingly, some of researchers have found the variables to moderate or to mediate the relationship between the corporate association and the product responses. In particular, there has been existed a few of studies that tested the influence of the reputation on the product-relevant perceived risk, but the effects of two types of the corporate association on the product-relevant perceived risk were not identified so far. The primary goal of this article is to identify and empirically examine some variables to moderate the effects of CA association and CSR association on the perceived risk of the product. In this articles, we take the concept of the corporate associations that Brown and Dacin (1997) had proposed. CA association is those association related to the company's expertise in producing and delivering its outputs and CSR association reflected the organization's status and activities with respect to its perceived societal obligations. Also, this study defines the risk, which is the uncertainty or loss of the product and corporate that consumers have taken in a particular purchase decision or after having purchased. The risk is classified into product-relevant performance risk and financial risk. Performance risk is the possibility or the consequence of a product not functioning at some expected level and financial risk is the monetary loss one perceives to be incurring if a product does not function at some expected level. In relation to consumer's knowledge, expert consumers have much of the experiences or knowledge of the product in consumer position and novice consumers does not. The model tested in this article are shown in Figure 1. The model indicates that both of CA association and CSR association influence on performance risk and financial risk. In addition, the effects of CA and CSR are moderated by product category knowledge (product knowledge) and product category involvement (product involvement). In this study, the relationships between the corporate association and product-relevant perceived risk are hypothesized as the following form. For example, Hypothesis 1a(
Purpose: This paper investigated the relationship between market competition and firm valuation error. Furthermore, Additional analyses were made according to the quality of financial reports and the listed market. Through the process we confirm to the impact of competition on the capital market. The purpose of this study is to analyze the impact of competition on valuation errors. The preceding studies did not provide a consistent results of the effects of competing functions on the capital market. One view is that the competition could mitigate the information asymmetry, and the other is that monopolistic lessens the manager's involvement in financial reporting. This study is intended to expand the prior study by analyzing the impact of competition on the capital market and on the valuation of investors. Research design, data, and methodology: The analysis was conducted on 12,031 samples over 11 years from 2008 to 2018 using data from market in Korea. Here the valuation error was measured by the research methodology of Rhodes-Kropf, Robinson and Viswanathan (2005), and competition measured by Herfindahl-Hirschman Index multiplied by (-1), and Concentration Ratio by (-1). Results: We confirm that the positive relationship between competition and the valuation error. In addition, we also found that the positive relation between competition and valuation error was in cases of low discretionary accruals and the KOSDAQ market. This means that the net function of competition does not mitigate valuation errors. Conclusions. This study has the following contributions when compared to prior research. First, the relevance between the level of competition and the valuation of the entity was confirmed. The study by Haw, Hu and Lee (2015) suggested that monopolistic industry of analysts' forecast is more accurate due to lower the variability in earnings. This study magnified it to confirm that monopolistic lessen information uncertainty in valuation. Second, the study on valuation errors was expanded. While the study on the effect of valuation errors on the capital market is generally relatively active, it is different that competition degree has analyzed the effect on valuation errors amid the lack of research on the effect on valuation errors.
Conceptual design is the first step in the overall process of product design. Its intrinsic uncertainty, imprecision, and lack of information lead to the fact that current conceptual design activities in engineering have not been computerized and very few CAD systems are available to support conceptual design. In most of the current intelligent design systems, approach of principle synthesis, such as morphology matrix, bond graphic, or design catalogues, is usually adopted to deal with the concept generation, in which optional concepts are generally combined and enumerated through function analysis. However, as a large number of concepts are generated, it is difficult to evaluate and optimize these design candidates using regular algorithm. It is necessary to develop a new approach or a tool to solve the concept generation. Generally speaking, concept generation is a problem of concept synthesis. In substance, this process of developing design candidate is a combinatorial optimization process, viz., the process of concept generation can be regarded as a solution for a state-place composed of multi-concepts. In this paper, genetic algorithm is utilized as a feasible tool to solve the problem of combinatorial optimization in concept generation, in which the encoding method of morphology matrix based on function analysis is applied, and a sequence of optimal concepts are generated through the search and iterative process which is controlled by genetic operators, including selection, crossover, mutation, and reproduction in GA. Several crucial problems on GA are discussed in this paper, such as the calculation of fitness value and the criteria for heredity termination, which have a heavy effect on selection of better concepts. The feasibility and intellectualization of the proposed approach are demonstrated with an engineering case. In this work concept generation is implemented using GA, which can facilitate not only generating several better concepts, but also selecting the best concept. Thus optimal concepts can be conveniently developed and design efficiency can be greatly improved.
The aim of this study is to find an analytic solution to the problem of determining the optimal capacity of a batch-storage network to meet demand for finished products in a system undergoing joint random variations of operating time and batch material loss. The superstructure of the plant considered here consists of a network of serially and/or parallel interlinked batch processes and storage units. The production processes transform a set of feedstock materials into another set of products with constant conversion factors. The final product demand flow is susceptible to joint random variations in the cycle time and batch size. The production processes have also joint random variations in cycle time and product quantity. The spoiled materials are treated through regeneration or waste disposal processes. The objective function of the optimization is minimizing the total cost, which is composed of setup and inventory holding costs as well as the capital costs of constructing processes and storage units. A novel production and inventory analysis the PSW (Periodic Square Wave) model, provides a judicious graphical method to find the upper and lower bounds of random flows. The advantage of this model is that it provides a set of simple analytic solutions while also maintaining a realistic description of the random material flows between processes and storage units; as a consequence of these analytic solutions, the computation burden is significantly reduced. The proposed method has the potential to rapidly provide very useful data on which to base investment decisions during the early plant design stage. It should be of particular use when these decisions must be made in a highly uncertain business environment.
This study aims to investigate the impact of wide use of digital technology, in particular, the Internet, on innovation process and corporate strategy in electronics industry. The introduction of digital technology has changed innovation process, business model and organizational structure of the electronics companies. With the introduction of digital technology, the entire value chain of electronics industry from procurement, sales, and marketing to R&D and manufacturing has been restructured. E-commerce has been a major agenda for e-business. Recently, collaboration among electronics companies through e-marketplace has emerged as an important issue. A web-based e-commerce standard, so called RosettaNet, has been developed for facilitating e-transactions of electronics firms. The development of digital technology has dramatically increased the processing speed and sophisticated the virtual reality technology. As simulation becomes easier and more effective, the uncertainty and risk involved in R&D has decreased significantly. Another positive impact is closer cooperation between R&D and manufacturing functions. Taking advantage of automated and flexible production technology, has a new type of firm, so called, EMS (Electronics Manufacturing Services) emerged, whose strategic focus is on manufacturing only. The EMS can be seen as a kind of innovative organization, that is, a modular organization for production function. Digital technology has made convergence of computer and communication possible at early years but right now the convergence has been accelerated in extensive areas of communication, broadcasting, information appliances, software, contents, and services. Firms' effort for an innovative product and service has been intensified and the competition for a new standard product and service has become severe in electronics industry. Business activities are always realized in a specific organizational context. Accordingly building up innovation-friendly organization has emerged as a critical concern. Due to the striking decrease of transaction cost, a network type of organization has proliferated, and a business function turns into a modular organization. As a whole, digital technology has pushed electronics firms into developing their own business model, which takes consideration of standardization of business platform and their core competency.
shows the research model of this study. To accomplish above-mentioned research objectives, the following ten hypotheses were proposed and verified : is the estimation results of l\1NL model, and
shows the marginal effects for each determinant to consumer's responses(SDL). Significant statistical results were as follows. Purchase urgency, purchase quantities, pre-purchase plan, product assortment, store price image, brand loyalty, and store loyalty were turned out to be significant determinants to influence consumer alternative behaviors in case of out-of-stock situation. Specifically, first, product substitution behavior was triggered by purchase urgency, surprise, purchase quantities, pre-purchase plan, product assortment, store price image, brand loyalty, and store loyalty. Second, purchase delay behavior was led by purchase urgency, purchase quantities, and brand loyalty. Third, store switching behavior was influenced by purchase urgency, purchase quantities, pre-purchase plan, product assortment, store price image, brand loyalty, and store loyalty. Finally, when out-of-stock situation occurs, store convenience and salesperson service did not have significant effects on consumer alternative responses.
The Effect of Corporate Association on the Perceived Risk of the Product
(소비자의 제품 지각 위험에 대한 기업연상과 효과: 지식과 관여의 조절적 역활을 중심으로)
The Empirical Study of Relationship between Product Market Competition Structure and Overvaluation
Concept Optimization for Mechanical Product Using Genetic Algorithm
Optimal Design of Process-Inventory Network under Cycle Time and Batch Quantity Uncertainties
(이중 불확실성하의 공정-저장조 망구조 최적설계)
Industrial Transformation in digital economy: A Case Study on PC and Comsumer Industries
(디지털경제와 산업 전환: PC와 가전 산업의 사례 연구)
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