Media Effects Research Lab - Research Archive

Corporate “Street Cred” in crises: Does who you are and what you say matter?

Student Researcher(s)

Guolan Yang (Ph.D Candidate); Jeff Conlin (Ph.D Candidate)

Faculty Supervisor

Dr. S. Shyam Sundar

This paper was based on a project as part of the COMM 506 course.  

INTRODUCTION
Crisis can happen to any business in the world. It is defined as a significant threat to companies that can result in negative consequences if not handled properly. In crisis situations, does a company’s corporate credibility prior to crisis affect consumers’ perceptions? Does it matter for companies to communicate transparently with their people? The current study attempts to examine these two concepts in crisis situations, and assess their relative impact on consumers’ attitude toward the company and their purchase intentions. In addition, the study explores the moderator role of type of company in these relationships.

RESEARCH QUESTION / HYPOTHESES

H1: In a crisis context, participants who read the high corporate credibility description will lead to having (a) positive attitude toward the company and (b) higher purchase intentions than those who read the low corporate credibility description.
H2: In a crisis context, participants who read the description of a company's high communicative transparency in crisis will lead to having (a) positive attitude toward the company and (b) higher purchase intentions than those who read the description of a company's low communicative transparency.
H3: Within organizations, there is an interaction between corporate credibility and communicative transparency in crises on attitude toward the company and purchase intentions, such that companies with high corporate credibility and high communicative transparency receive (a) more positive attitude toward the company and (b) higher purchase intentions.

For U.S. population, controlling for age and gender,
RQ1: How does the type of company moderate the relationship between corporate credibility and consumers’ attitude toward the company and purchase intentions in a crisis situation?
RQ2: How does the type of company moderate the relationship between communicative transparency and consumers’ attitude toward the company and purchase intentions in a crisis situation?
RQ3: How does the type of company moderate the relationship between the interaction of corporate credibility and communicative transparency and consumers’ attitude toward the company and purchase intentions in a crisis situation?

METHOD
A 2 (types of company: yogurt company vs. airline company) x 2 (corporate credibility: high vs. low) x 2 (communicative transparency: low vs. high) between-subjects factorial experiment was conducted. A total of 160 Amazon Mechanical Turkers participated in the study.

RESULTS
H1 is supported. The study ran a factorial ANOVA and found that, the corporate credibility effect was significant for attitude toward the company, F (1, 152) = 46.35, p < .0001. The main effect for corporate credibility on purchase intentions is also significant, F (1, 152) = 46.05, p < .0001.

H2 is supported. There was a significant main effect for communicative transparency on attitude toward the company (F (1, 152) = 63.17, p < .0001). The main effect for communicative transparency on purchase intentions was significant (F (1, 152) = 42.77, p < .0001).

H3 is partly supported. There is no significant interaction for the effect of corporate credibility and communicative transparency on attitude toward the company (p = 0.29). However, the interaction effect for corporate credibility and communicative transparency on purchase intentions approached acceptable levels of statistical significance, F (1, 152) = 3.82, p = 0.05.

For RQ1, 2, and 3, the interaction effect of company type and communicative transparency occurred on purchase intentions, F (1, 152) = 6.27, p = 0.01.

CONCLUSIONS/DISCUSSION
In crisis situations, a company’s corporate credibility is positively correlated with consumer publics’ attitude toward the company and their purchase intentions (H1). Companies’ efforts to communicate transparently had a positive effect on consumers’ attitude toward the company and their purchase intentions (H2). These results extend prior studies to crisis contexts. In addition, the result showed that companies with high corporate credibility and high communicative transparency lead to having higher purchase intentions than those with bad reputation and low communicative transparency (H3b). However, the interaction effect of these two variables failed to occur on participants’ attitude toward the company (H3a). The results, to some degree, contradicts with the arguments from Ajzen’s (1985) Theory of Planned Behavior, which predicts that behavior intentions are formed, in part, from attitudes. One possibility could be the indirect correlation between attitude toward a company and purchase intention. Last, using the two different company types, i.e. yogurt manufacturer versus airline, the study found that the yogurt company with low communicative transparency in a crisis context elicited a lower purchase intention than the airline company with low communicative transparency. The unexpected interaction finding could be explained either by participants’ closer identification with yogurt consumption than airline travel, or the type of crisis described in the stimulus with food contamination as more relatable than the plane crash.

For more details regarding the study contact

Dr. S. Shyam Sundar by e-mail at sss12@psu.edu or by telephone at (814) 865-2173

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