The reputational benefits of instructing information: The first test of the revised model of reputation repair

Situational Crisis Communication Theory (SCCT) prescribes crisis response strategies for organizations facing crisis. A meta-analysis of SCCT suggests using the prescribed responses has, at most, a small effect on reputation, while a few studies have shown that the base crisis responses (instructing information and adjusting information) may have a larger effect on reputation. This experiment compares the effects of SCCT’s prescribed responses, instructing information, and adjusting information on reputation in an experiment with 989 participants recruited from mTurk. It finds that instructing information has a very large effect on reputation, while adjusting information has a small but significant effect on reputation. In this sample, SCCT’s prescribed response strategies have no significant effect on reputation. The experiment proposes the revised model of reputation repair (REMREP) as a tool for understanding how crisis influences reputation. The model incorporates virtuousness and offensiveness, which demonstrates the importance of organizational virtuousness in handling a crisis. Implications for theory and practitioners are discussed.     

Measuring success: Explications and measurement scales of instructing information and adjusting information

Substantial research exists to study reputation management messages but far less research exists to consider instructing information and adjusting information during and after a crisis. This research seeks to build tools that assist in the study of base crisis responses. Using a literature review, 18 interviews with people with expertise in public relations, and an experiment with 286 participants recruited from mTurk, this research builds scales that assess the quality of instructing information and adjusting information given during a crisis. The resulting scales are found to be reliable and predict significant change in post-crisis reputation in an initial test. Potential uses of these scales for crisis communication scholars and public relations practitioners are discussed.     

Crisis response and crisis timing strategies,two sides of the same coin

This study investigates the moderating impact of the timing of crisis disclosure on the effect of crisis response strategies on organizational post-crisis reputation. It proposes that self-disclosing a crisis allows organizations to avoid explicitly taking or rejecting responsibility by means of a crisis response strategy. A 2 (crisis timing strategy: ex-ante vs. ex-post) × 2 (crisis response strategy: response strategy vs. objective information only) between-subjects factorial design was conducted among 137 participants. The results show that organizations that do not steal thunder better use a reputation restoring crisis response strategy than just providing stakeholders objective information about what happened. In addition, the results demonstrate that if an organization steals thunder, it is not necessary to offer reputation restoring crisis response strategies such as an apology. These findings stress the importance of timing to disclose crisis information in addition to the content of crisis communication strategies.     

Vertrauen bei Internet-Auktionen

The text replies to the article “Trust and Reputation in Internet-Auctions” (KZfSS, Vol. 54, No. 4, pp. 674–693) by Diekmann and Wyder. In principle the authors’ consideration regarding a premium for reputation for trustworthy participants in internet auctions seems to be attractive. However, we object to the lacking definitions of the categories of trust and reputation as well as to the problematic design of their central indicator (reputation). With regard to their interpretation we criticize the missing consideration of qualitative — especially negative — statements in the public rating systems, underestimating the relevance of “critical incidents” to fragile trust relations on the internet. Finally we remark that Diekmann and Wyder misjudge the founding, cultivating and modifying activities (including imposing sanctions) of the platform owner towards this institution regulating the market.     

Understanding publics’ perception and behaviors in crisis communication: Effects of crisis news framing and publics’ acquisition,selection, and transmission of information in crisis situations

This study aims to better understand publics’ perception and communicative behaviors in crisis communication. The extant research has overlooked how framing factors and different publics’ communicative behaviors directly influence crisis outcomes, including reputation and behavioral intentions. An online experiment with 1,113 participants was conducted to fill the gap. The findings demonstrated that preventable crisis news framing was a strong negative predictor for crisis outcomes. Another finding based on Communicative Action in Problem Solving (CAPS) in Situational Theory of Problem Solving (STOPS) revealed that information attending, forwarding, and seeking are positively associated with reputation and behavioral intentions.     

BAD REPUTATION UNDER BOUNDED AND FADING MEMORY

I relax the full memory assumption in Ely and Välimäki's (2003) mechanic game, where reputation is bad. Under bounded memory (only recent periods are observed), long memory still yields bad reputation due to an “echo” where bad signals cause future motorists to not hire, causing further lack of hiring, and so on. Short memory avoids bad reputation by making it “useless,” because consumers never learn enough information to change their decisions. No “happy middle” exists under bounded memory where consumers learn valuable information without tempting the mechanic into harmful signaling and thereby unraveling the market. By contrast, “fading memory” (past periods are randomly sampled with “fading” probabilities) achieves this happy middle by offering valuable information in a way that bounds the probabilities of these reputational echoes. Possible fading memory implementations (e.g., for review websites) are described and generalized to a broader class of games. (JEL C73, D8)     

Believe it when you see it: Dyadic embeddedness and reputation effects on trust in cryptomarkets for illegal drugs

Large-scale online marketplace data have been repeatedly used to test sociological theories on trust between strangers. Most studies focus on sellers’ aggregate reputation scores, rather than on buyers’ individual decisions to trust. Theoretical predictions on how repeated exchanges affect trust within dyads and how buyers weigh individual experience against reputation feedback from other actors have not been tested directly in detail. What do buyers do when they are warned not to trust someone they have trusted many times before? We analyze reputation effects on trust at the dyadic and network levels using data from an illegal online drug marketplace. We find that buyers’ trust decisions are primarily explained by dyadic embeddedness - cooperative sellers get awarded by repeated exchanges. Although buyers take third-party information into account, this effect is weaker and more important for first-time buyers. Buyers tend to choose market exit instead of retaliation against sellers after negative experiences.     

Conditioning effect of prior reputation on perception of corporate giving

Prior corporate reputation, one responsibility of a public relations department, affects public perceptions toward corporate philanthropic messages and ultimately affects public attitudes toward the company. Using an experiment that emulates the sort of news consumption individuals normally undertake, participants inferred corporate charitable giving as a mutually beneficial activity when a company had a good reputation (H1a). Participants inferred corporate charitable giving as a self-interested activity when the company had a bad reputation (H1b). Also, public inference (suspicion) successfully mediated corporate prior reputation on public attitude toward the company (H2). Participants showed positive attitude toward the company when they inferred the company had an altruistic motive for charitable giving (H3a). However, participants showed negative attitude toward the company when they inferred the company had a self-interested motive for charitable giving (H3b).     

Financial forecasts during the crisis: Were experts more accurate than laypeople?

The main goal of this paper was to examine the accuracy and confidence of financial forecasts during the 2009/2010 crisis. The study was carried out in February 2009 in Poland. The participants represented two groups: financial analysts and laypeople (people without knowledge or skills in finance). All participants were asked to forecast future stock market performance and foreign exchange rates. Additionally, they marked their confidence on a 100-point scale. The results showed that the forecasts significantly differed from the real values. In forecasting both the stock market and the currency exchange market, the prediction error significantly differed from zero. Even if the participants were optimistic in making the directional stock market forecasts, they were pessimistic when making point index predictions, which suggests a judgmental paradox. The experts were slightly better than the non-experts in predicting the stock market. However, their accuracy was generally not better in the exchange market forecasts. The next step of the analysis focused on the confidence factor. The results of this part of the research showed that the laypeople were less confident than the experts in all the judgments.     

Public relations practitioners’ management of fake news: Exploring key elements and acts of information authentication

Using a thematic analysis of open-ended questions answered by current public relations practitioners in the United States, this study examined how public relations (PR) practitioners currently understand fake news and the strategies they use to verify information. Fake news is conceptualized as an important organizational issue that requires monitoring and management by PR practitioners. Participants identified manipulative intentions and misleading content intended to harm reputation as key elements of fake news. The current findings suggest that PR practitioners rely on both traditional news media and crowdsourcing to verify information. Finally, to differentiate clients’ content from fake news, participants emphasized the need to maintain control as the official source of information, avoid any controversies in official responses, and adhere to PR professional standards and ethics.     

The free encyclopedia that anyone can dispute: An analysis of the micro-structural dynamics of positive and negative relations in the production of contentious Wikipedia articles

We consider two rival hypotheses on the emergence of organization in open production communities. According to the first (“reputation hypothesis”), patterns of agreement and disagreement among participants in open production communities are explained by differences in individual reputation for quality of contribution. The reputation hypothesis predicts that participants will tend to agree with more reputable others and disagree with less reputable others thus contributing to establish a stable open production community. According to the second hypothesis (“balance hypothesis”), patterns of agreement and disagreement are explained by membership in sub-communities of “friends” and “enemies.” The balance hypothesis predicts that participants in open production communities will agree mainly with friends and disagree mainly with enemies, regardless of considerations about reputation for the quality of their contributions. In this paper, we examine which one of these hypotheses is more consistent with patterns of positive and negative interaction events observed during the production of the complete set of 1,206 English-language Wikipedia articles officially considered controversial. We specify and estimate new models for signed and weighted relational event networks predicting the probability that a user deletes the contributions of another user – thus expressing personal disagreement – and/or protects the contributions of another user against deletion from third parties – thus expressing personal agreement. In an analysis of positive and negative interaction among Wikipedia contributors consisting of more than 60 million observations, we find strong support for the balance hypothesis and for the predictions of the reputation hypothesis that are more consistent with alter-centric interpretations of social status as conferred by alters through observable acts of deference.     

An analysis of participation factors and effects of the active labour market measure Graduate practice in Slovakia – Counterfactual approach

The paper presents the results of the evaluation of the selected active labour market policy measure “Contribution to the Graduate practice” in Slovakia. The measure is of a voluntary nature and its main aim is to prevent long-term unemployment among young people and to support a competitive ability of young school-leavers and thus their employability and sustainability in the labour market through the acquisition of work experience, professional skills and work habits. In the study, we analyse the selected characteristics of young jobseekers who participated in this measure in 2016 and their counterfactuals who did not participate. In addition to 2016, the observed period includes a subsequent 2 years – the individual impact period of the measure for each participant, i.e. the years 2017 and 2018. We evaluated the effects of the measure by applying the exact matching of treated and non-treated individuals using the outcome variables, namely wages and placement in the labour market in the impact period of the measure. The results indicate that the Graduate practice had a positive impact on the employability and sustainability of its participants, but rather in short-term or maximum long-term. Regarding the wage levels referring to the financial appraisal of the participants of the measure, the results suggest that non-treated individuals were better financially evaluated and so the Graduate practice did not guarantee better salary to its participants. The findings of the study are important in the setting of conditions of the measure for future periods in order to achieve its better functioning and efficiency in the way of proper targeting, more efficient use of funds, and for a system of their redistribution.     

Developing a measure of celebrity reputation

This study was designed to develop a measure of celebrity reputation and attempt to identify key dimensions for evaluating diverse components of celebrity reputation, including personalities, relationship, appearance, expert abilities, private life management, and reputation. Using exploratory and confirmatory factor analysis, this study confirmed that the measure applied was both reliable and valid.     

Transparency ‘footprints’ of Central Banks: The role of minutes/voting records

In most academic studies the ECB is seen as more transparent than the FED. However, the perception of ECB transparency by the media and market participants is different. This study will examine the role of minutes/voting records as a possible cause of the differences in the perception of transparency between the academics and the media/market participants. As a proxy of how the media/market participants perceive Central Bank transparency, a content/thematic analysis of CNBC video clips was conducted for four central banks – ECB, FED, BOE, and BOJ. The result of the study yielded a three-dimensional ‘footprint’ of the importance of minutes/voting records as perceived by the media/market participants. In the ECB's case, the three-dimensional ‘footprint’ was extrapolated. The three-dimensional ‘footprint’ of the importance of minutes/voting records could be used to value the relative importance of minutes/voting records in transparency/disclosure indexes or as a ‘quick’ proxy for financial market participants to measure the transparency of Central Banks.     

Referrals and information flow in networks increase discrimination: A laboratory experiment

Referrals and information flow distort market mechanisms of hiring in the labor market, but they might assist employers under asymmetric information in finding better alternatives. This paper investigates whether an impartial information flow between employers in a cyclic network structure could generate more discrimination than when no information is exchanged between employers. We set up an artificial labor market in which there was no average quality difference between two categories of workers. We asked participants to play the role of employers and examined the partiality of their hiring choices. Results showed that discrimination was prevalent in all conditions. Higher standards by the employers for the quality of workers increased discrimination as did the presence of referrals from workers. Unexpectedly, impartial information flow in a cyclic network of employers did not help to decrease discrimination. We also showed that these mechanisms interact with and subdue each other in complex ways.     

Is Starting a Business a Sustainable way out of Unemployment? Treatment Effects of the Swedish Start-up Subsidy

In this paper, we evaluate the Swedish self-employment start-up program based on a matching approach using data from administrative records. In addition to information of labor market history, traditional human capital and socio-economic variables, the data at hand also include information on the self-employment history of participants and nonparticipants as well as that of their parents. Our results indicate that the start-up subsidy program for unemployed persons is a successful program regarding the integration of the unemployed into the mainstream of the labor market. We find that, relative to members of control groups, participants, on average, have an increased probability of unsubsidized employment. Our analysis of different educational backgrounds presents the strongest employment effects for the low educated unemployed.     

Organizational Reputation and the Securities and Exchange Commission's Failed Regulatory Revolution

When do regulatory innovations fail? I provide a novel organizations‐based answer to this question by developing an institutional‐reputational approach to regulatory politics. Regulators cannot hope to monitor the vast majority of market activities, so they must rely on the regulated to condition their behavior on the regulator's reputation: beliefs and expectations concerning the regulator's goals and capabilities. Regulators thus pursue daily activities while being mindful of how these activities will shape their reputation and thus their ability to achieve future goals. However, even long‐standing reputations are rendered fragile when rival actors use the organization's reputation to cross‐purposes. Thus, while reputation represents a major source of power, reputation also proves fragile when organizations face conflicting reputational demands. The fragility of reputations provides a novel explanation of an understudied phenomenon: failed regulatory revolutions. I develop this theory through the analysis of innovative Securities and Exchange Commission activity in disclosure law following the Watergate investigation.     

Managing Organizational Social Capital through Value Configurations

Nonprofits are said to serve as places for the reproduction of social capital. However, little is known about how to manage social capital in a nonprofit. This article presents a theory‐based perspective on how to plan, execute, and measure social capital production in a nonprofit organization. By using the concept of value configurations as a method to analyze and describe the creation of organizational social capital, bonding and bridging social capital can be managed in alternative ways. In a value shop framework, the participants are more homogeneous, and growth is heavily based on referrals and reputation as well as the quality of the members. Organizations managed as value shops will foster bonding social capital. In contrast, a value network framework incorporates more likely heterogeneous, multilevel participants that add legitimacy to the network. Organizations in this framework will strengthen the evolution of bridging social capital.     

An Integrated Model for Organization—Public Relational Outcomes,Organizational Reputation,and Their Antecedents

This study is to test a theoretical model regarding the effect of organization—public relationships on organizational reputation. Grounded in multidisciplinary literature, this study proposed that organization—public relational outcomes are hypothesized to influence organizational reputation, considering the exogenous influences of communication behaviors, experience, and familiarity that the research participants hold of the organizations studied. The proposed model illustrated tenable data-model fits, and most of the hypotheses were statistically supported. The key finding of the research includes that, across all organizations studied, organization—public relational outcomes were associated positively with favorable reputation of the organizations studied. Limitations and suggestions for the future research were discussed.     

Who should we get? How employer reputation shapes network hiring in Dutch professional football

Despite a vast literature examining networks in labor markets, it remains unclear how employers differ in their use of networks during recruitment. This study examines network hiring among high and low reputation organizations in Dutch professional football. Within-employer within-transfer window fixed effects conditional logistic regression models demonstrate that networks increase the likelihood that low reputation employers hire workers, but no network effect was found among high reputation employers. Qualitative interviews with employees suggest that low reputation employers identify their search pool and gather hard-to-observe information about potential hires through networks, while high reputation employers do not rely on networks for their search pool and gather information through observing workers for prolonged periods of time