Electronic Theses and Dissertations

Date

2021

Document Type

Dissertation

Degree Name

Doctor of Philosophy

Department

Business Administration

Committee Chair

George Deitz

Committee Member

Subhash Jha

Committee Member

Orrin Cooper

Committee Member

Jeff Thieme

Abstract

Companies often release a public statement of apology after a transgression. Two essays explore how corporate apology strategy can influence firm value and consumer forgiveness. Essay I investigates differences in the impact of public corporate apologies on stock performance based on a firms reputational status, CEO delivery, and the language used within the apology. An event study and cross-sectional regression analysis were conducted to explore seven proposed hypotheses. Results provide support for a negative effect of corporate apologies on firm value; however, corporate reputation can mitigate the adverse effects of a mass firm apology. Additionally, while low reputation firms benefit from CEO delivery, affiliative, and risk-oriented language, high reputation firms instead benefit from the use of affective language. This research is the first to examine the financial impact of corporate apologies employing text analysis. Moreover, it is one of the most comprehensive event studies to date that examines how investors respond to corporate apologies. These findings fill a gap in the literature relating to the effects of public statements of apology on a firms financial outlook by revealing specific apology characteristics that preserve stock performance based on a firms reputation. In an era of an increasing number of corporate apologies in conjunction with the rise of social media, consumers have the ability to voice frustrations in response to corporate public apology statements. Essay II explores the role of venting and vent-target on consumer forgiveness for brand transgressions. Across an initial exploratory study and three experiments, findings reveal that company- (vs. CEO-) issued apologies elicit greater consumer forgiveness post-venting. Appraisals of attribution are uncovered as the mediating mechanism in which a company vent-target results in higher levels of forgiveness. Additionally, crisis type (service vs. ethical) presents a reversal effect to the findings, such that greater consumer forgiveness is allotted to CEO- (vs. company-) issued apologies following an ethical failure. Together, both essays identify how firms can optimally respond to crisis management situations to preserve firm value and facilitate consumer forgiveness.

Comments

Data is provided by the student.

Library Comment

Dissertation or thesis originally submitted to ProQuest

Notes

embargoed

Available for download on Tuesday, March 09, 2027

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