Once established, a strong reputation is not indestructible. To protect this intangible asset, the process of reputation damage needs to be explained. Drawing on the irresponsibility and crisis communication literature, this study seeks to better understand this process. Specifically, this study aims to show how moral anger and distrust mediate the relationship between the awareness of an irresponsible incident and organisational reputation.
This study examined the proposed conceptual model in the empirical context of retailers bending the law. A large survey (n = 991) on consumer responses to retailers’ misbehaviour was used to collect data. The hypotheses were tested using Hayes’ PROCESS macro.
The study revealed that the mere awareness of corporate misbehaviour is not enough to directly harm accumulated positive information about a firm. Discrete emotions of moral anger and distrust fully mediate the effects of knowledge about wrongdoing. The irresponsibility appraisal is a moderator of this process that substantially changes the impacts of misbehaviour on organisational reputation.
By demonstrating how moral anger and distrust mediate the effects of misbehaviour awareness and identifying a boundary condition, this study advances our understanding of how corporate wrongdoing affects organisational reputation.
