Campus Units

Marketing

Document Type

Article

Publication Version

Accepted Manuscript

Publication Date

1-2021

Journal or Book Title

Journal of Business Research

Volume

122

First Page

24

Last Page

37

DOI

10.1016/j.jbusres.2020.08.059

Abstract

Our paper examines how prior trust moderates consumer and firm responses to a firm's failures. We document that relatively high prior trust in a firm can help firms better recover from the negative effects of denying versus accepting failures, but that trust offers greater protection against competence as compared to ethical failures. We also consider the effects of two responses to ethical failures - external attribution and monetary compensation - and demonstrate that these responses may be viable alternatives that yield consumer perceptions that are as favorable as denying ethical failures. Finally, we show that reticence - neither confirming nor disconfirming a failure -elicits the least favorable post-recovery consumer responses. Our findings suggest that it may be possible for a firm to recover from an ethical failure even after accepting the failure, which is an important contribution since little prior research supports a successful recovery from ethical failures.

Comments

This accepted article is published as Sekar Raju, Priyali Rajagopal, Mitchel R. Murdock (2021), “The moderating effects of prior trust on consumer responses to firm failures” Journal of Business Research, 122 (Jan), 24-37. Doi:10.1016/j.jbusres.2020.08.059. Posted with permission.

Copyright Owner

Elsevier Inc.

Language

en

File Format

application/pdf

Available for download on Friday, July 01, 2022

Published Version

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