This study aims to examine the ramifications of an unfavorable public incident resulting from an organizational leader’s transgression on member outcomes and their intentions to purchase associated symbolic products as gifts. This study also considers how members’ attributions of organizational control affect the relationship between members’ organizational identification and their purchase behavior.
The study applies a longitudinal design involving two rounds of data collection over two years to examine a case of leadership transgression. Using the customer panel of a privately owned retailer, sorority members were surveyed before and after an unfavorable public incident involving their president. This study applied t-tests of mean differences and regression analyses to test the hypotheses.
After the leader’s transgressions were publicized, sorority members exhibited lower levels of cognitive organizational identification, satisfaction with the organization and purchase intention of organizational gifts. The association between cognitive organizational identification and gift purchase intentions was stronger after the incident. Further, controllability attributions positively moderated the association between cognitive organizational identification and the intended purchase quantity of organizational products after the incident.
The sample limits the generalizability of the findings, as the study is conducted on one case of a leader’s transgression in an identity-based organization (IBO).
The findings imply that efforts to repair customer identification should be taken rather than satisfaction enhancement when a leader of an IBO commits a public transgression.
To the best of the authors’ knowledge, this is the first study to apply identity threat theory to understand how an organizational leader’s public transgression affects member outcomes and purchasing. The findings imply that it is critical to repair members’ identification when these situations arise. The use of a real case and a longitudinal research design are rare contributions to this research stream.
