Academic journal article Global Business and Management Research: An International Journal

Crisis Management, Crisis Communication, and Consumer Purchase Intention Post-Crisis

Academic journal article Global Business and Management Research: An International Journal

Crisis Management, Crisis Communication, and Consumer Purchase Intention Post-Crisis

Article excerpt

Introduction

Products are becoming increasingly complex. The evolvement of product-safety legislation, the changing consumer demands and product preferences are among the major contributors to the rising number of product-harm crises in the present market place (Cleeren, 2015). This trend is in line with the statements by Dawar and Pillutla (2000) and Dawar and Lei (2009) that there was a sharp increase of the number of defective, unsafe, or harmful products recalled from the market in the last few years. In the European Union market alone, the total number of non- food dangerous product notifications was 2,125 in 2015, an increase of 1,278 in a span of ten years (RAPEX, 2016).

Interestingly, majority of previous studies were focusing on the factors influencing consumer response in a product-harm crisis (e.g., Vassilikopoulou et al., 2009; Magno, 2012). However, there is no clear indication on the moderating role of crisis communication on the relationship between crisis management and consumer purchase intention post-crisis in previous studies. Hence, this study is conducted to analyse the relationship between crisis management and consumer purchase intention post-crisis, moderated by crisis communication. Furthermore, this study intends to identify which latent variables are of high importance to business firms and the influence of demographics to the high importance latent variables.

Literature Review

Crisis Management

The second phase of crisis management which is during crisis is important in this study as previous studies (e.g., Siomkos 1989; Siomkos and Kurzbard, 1994; Magno, 2012; Li, 2015) have indicated that crisis response of a company during a crisis is vital in determining the effectiveness of crisis management of a company in crisis. Besides, consumers form perceptions about the company during a crisis, as well as their response after the crisis has ended.

Three theories identified to be related to crisis management are (1) the Structural Functions Systems Theory and (2) the Diffusion of Innovation Theory that emphasize on the importance of organizational crisis communication. (3) the Unequal Human Capital Theory emphasizes on the human capital management. The similarity of these theories are that they involve the employees, the internal processes and the communication. Thus, the internal management of an organization is critical in crisis management. In essence, the crisis responses during the crisis, influences the whole crisis management process, whether it succeeds or not. This study focused on the second phase (during crisis) of crisis management process as proposed by Coombs (2007). The latent variables are discussed below.

Time

Time is defined as the difference between the first signals of product dangerousness and the withdrawal from the market, time taken to react promptly to the crisis issues and quick response to inquiries (Mowen, 1980: Standop, 2006: Roth et al., 2008; Hora et al., 2011; Magno, 2012). Time is also defined as the time period after the crisis (Vassilikopoulou et al., 2009), the year of the sale of the product and the announcement of its recall (Roth et al., 2008; Hora et al., 2011). On the other hand, Johnson-hall (2012) described and classified time into three stages which are Stage 1: end of production to time of defect detection, Stage 2: time of defect detection to public notification, and Stage 3: public notification to the closure of recall activities which include reverse logistic processes by the recalling firm and recall monitoring by the regulatory agency.

The definition of time in this study is the difference between the first signals of product dangerousness detected and the withdrawal from the market, time taken to announce the issues, react promptly to the crisis and quick response to inquiries to the product recall are most appropriate in this study. It is an integral element of crisis management of a company during a product-harm crisis which is the main focus of this study. …

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