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The Influence of a Cross-National Conflict Shifting on a Transnational Corporation's Host Customers

Permanent Link: http://ufdc.ufl.edu/UFE0022313/00001

Material Information

Title: The Influence of a Cross-National Conflict Shifting on a Transnational Corporation's Host Customers
Physical Description: 1 online resource (65 p.)
Language: english
Creator: Lim, Hyun
Publisher: University of Florida
Place of Publication: Gainesville, Fla.
Publication Date: 2008

Subjects

Subjects / Keywords: crisis, crossnational, reputation
Journalism and Communications -- Dissertations, Academic -- UF
Genre: Mass Communication thesis, M.A.M.C.
bibliography   ( marcgt )
theses   ( marcgt )
government publication (state, provincial, terriorial, dependent)   ( marcgt )
born-digital   ( sobekcm )
Electronic Thesis or Dissertation

Notes

Abstract: Development of interactive media and information technology has prompted the globalization of business transactions, politics, and economics. Thus, companies are becoming transnational,which includes the three key components of worldwide learning, multinational flexibility, and national responsiveness. Cross-national conflict shifting (CNCS) theory was developed to study public relations practices during such transnational processes, which states that decisions, actions, and operations of transnational corporations (TNCs) affect domestic (host) publics in particular countries could also impact transnational publics in many other locations. CNCS theory argues that, if a TNC is involved in a conflict or crisis in one country, such a crisis could potentially shift to another country or countries with increased levels of threat. This, in turn, could taint the reputation of transnational corporations and even cause financial harm at the transnational level. The purpose of this study was to analyze the particular effects of a home crisis on potential consumers in host countries within the framework of CNCS theory. This study provides an opportunity to gain a greater understanding of how cross-national conflicts or transnational crises evolve, as well as ways to test and further the theory. To test the proposed hypotheses, a 2 (type of crisis: a massive product recall vs. a bribery scandal) x 2 (prior attitude toward TNCs: friendly vs. unfriendly), one between-subjects and one within-subjects factorial design was implemented. Dependent measures examined attitudes and behavioral intentions of participants. Results show that the type of crisis significantly affected attitude and behavioral intentions of potential customers. Further, prior attitude toward TNCs of participants did not affect how they perceived the negative publicity about a TNC's crisis. Both participants who had friendly attitudes toward TNCs and participants with unfriendly attitudes showed negative attitudinal and behavioral changes toward the company involved in the crisis. Results of this study provide practitioners in public relations agencies and in-house practitioners with useful insights into preparing strategies as a crisis communication tool in CNCS. In addition, the results suggest that many factors should be considered when evaluating the influence of CNCS for future research.
General Note: In the series University of Florida Digital Collections.
General Note: Includes vita.
Bibliography: Includes bibliographical references.
Source of Description: Description based on online resource; title from PDF title page.
Source of Description: This bibliographic record is available under the Creative Commons CC0 public domain dedication. The University of Florida Libraries, as creator of this bibliographic record, has waived all rights to it worldwide under copyright law, including all related and neighboring rights, to the extent allowed by law.
Statement of Responsibility: by Hyun Lim.
Thesis: Thesis (M.A.M.C.)--University of Florida, 2008.
Local: Adviser: Molleda, Juan Carlos.

Record Information

Source Institution: UFRGP
Rights Management: Applicable rights reserved.
Classification: lcc - LD1780 2008
System ID: UFE0022313:00001

Permanent Link: http://ufdc.ufl.edu/UFE0022313/00001

Material Information

Title: The Influence of a Cross-National Conflict Shifting on a Transnational Corporation's Host Customers
Physical Description: 1 online resource (65 p.)
Language: english
Creator: Lim, Hyun
Publisher: University of Florida
Place of Publication: Gainesville, Fla.
Publication Date: 2008

Subjects

Subjects / Keywords: crisis, crossnational, reputation
Journalism and Communications -- Dissertations, Academic -- UF
Genre: Mass Communication thesis, M.A.M.C.
bibliography   ( marcgt )
theses   ( marcgt )
government publication (state, provincial, terriorial, dependent)   ( marcgt )
born-digital   ( sobekcm )
Electronic Thesis or Dissertation

Notes

Abstract: Development of interactive media and information technology has prompted the globalization of business transactions, politics, and economics. Thus, companies are becoming transnational,which includes the three key components of worldwide learning, multinational flexibility, and national responsiveness. Cross-national conflict shifting (CNCS) theory was developed to study public relations practices during such transnational processes, which states that decisions, actions, and operations of transnational corporations (TNCs) affect domestic (host) publics in particular countries could also impact transnational publics in many other locations. CNCS theory argues that, if a TNC is involved in a conflict or crisis in one country, such a crisis could potentially shift to another country or countries with increased levels of threat. This, in turn, could taint the reputation of transnational corporations and even cause financial harm at the transnational level. The purpose of this study was to analyze the particular effects of a home crisis on potential consumers in host countries within the framework of CNCS theory. This study provides an opportunity to gain a greater understanding of how cross-national conflicts or transnational crises evolve, as well as ways to test and further the theory. To test the proposed hypotheses, a 2 (type of crisis: a massive product recall vs. a bribery scandal) x 2 (prior attitude toward TNCs: friendly vs. unfriendly), one between-subjects and one within-subjects factorial design was implemented. Dependent measures examined attitudes and behavioral intentions of participants. Results show that the type of crisis significantly affected attitude and behavioral intentions of potential customers. Further, prior attitude toward TNCs of participants did not affect how they perceived the negative publicity about a TNC's crisis. Both participants who had friendly attitudes toward TNCs and participants with unfriendly attitudes showed negative attitudinal and behavioral changes toward the company involved in the crisis. Results of this study provide practitioners in public relations agencies and in-house practitioners with useful insights into preparing strategies as a crisis communication tool in CNCS. In addition, the results suggest that many factors should be considered when evaluating the influence of CNCS for future research.
General Note: In the series University of Florida Digital Collections.
General Note: Includes vita.
Bibliography: Includes bibliographical references.
Source of Description: Description based on online resource; title from PDF title page.
Source of Description: This bibliographic record is available under the Creative Commons CC0 public domain dedication. The University of Florida Libraries, as creator of this bibliographic record, has waived all rights to it worldwide under copyright law, including all related and neighboring rights, to the extent allowed by law.
Statement of Responsibility: by Hyun Lim.
Thesis: Thesis (M.A.M.C.)--University of Florida, 2008.
Local: Adviser: Molleda, Juan Carlos.

Record Information

Source Institution: UFRGP
Rights Management: Applicable rights reserved.
Classification: lcc - LD1780 2008
System ID: UFE0022313:00001


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THE INFLUENCE OF A CROSS-NATIONAL CONFLICT SHIFTING ON A TRANSNATIONAL CORPOR ATIONS HOST CUSTOMERS By HYUN JI LIM A THESIS PRESENTED TO THE GRADUATE SCHOOL OF THE UNIVERSITY OF FLOR IDA IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS OF MASS COMMUNICATION UNIVERSITY OF FLORIDA 2008 1

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2008 Hyun Ji Lim 2

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For all that I have accomplished and become, I dedicate this thesis to my family. Without their love and support, I would not be where I am today. 3

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ACKNOWLEDGMENTS I would like to thank my wonderful adviso r and chair, Dr. Juan-Carlos Molleda. He always encouraged me to come up with better ideas, and his advice inspired me to demonstrate my best for my thesis. I deeply appreciate hi s guidance and thoughtful co nsideration. I am also thankful to Dr. Spiro Kiousis and Dr. Michae l Mitrook for serving as my committee members and for their invaluable advice and caring. I am grateful for support from Dr. Seth Oyer, w ho allowed me to collect data in his class, and for valuable advice from Dr. Chang-Hoan Cho, who helped me significantly when I was stuck with problems. I would like to express deepes t gratitude to my mentor s back in Korea, Dr. Yungwook Kim and Dr. Heewon Cha. They encourag ed me to have confidence and motivated me to do better. I want to give the Korean Co mmunigators in this college many thanks, especially Minji Kim, Hyunmin Lee, Eunsoo Rhee, Wanseop Jung and Sooyeon Kwon. Without their friendship, help, endless debates, and convers ations, my masters program e xperience would not have been as memorable. I would also like to express my gratitude toward all of my classmates in the public relations masters program especially Jennifer Warmington and Catherine Mack. Their friendship, love, and support have helped me imme nsely in both my school and my personal life. My deep gratitude goes to Youngshin Hong for her encouragement and valuable suggestions. She always cheered me up and kept me going when I was hopeless and frustrated. Without her great help, I could not have accomplished my graduate course. I cannot adequately express my gratitude towa rd my friends in Korea for being there for me and offering their support in whichever way they could during my 2 years of study. A great thank you should go to my friends Jinjoo Choi Heajin Jo, Jaeyong Jo, Baesang Seo, and Jungwoo Woo for their encouragement. They were always willing to listen whenever I had 4

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problems. I extend my appreciation to them. Finally, I would like to thank my parents, Sungchoon Lim and Yoonjeong Yang, for their love and support. Their encouragement, guidan ce, patience, and belief are a reflection of the achievements I have made throughout my life. For everything they have done for me I am truly grateful, and I hope that one day I will be able to give back a small fraction of what they have given me. Also, I would like to thank my br other, Wooyoung Lim, for his caring and love. Without my family, I would not have been able to accomplish all the things that I have and would not be where I am today. For th at, I dedicate this thesis to them. 5

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TABLE OF CONTENTS page ACKNOWLEDGMENTS ............................................................................................................... 4LIST OF TABLES ...........................................................................................................................8ABSTRACT ...................................................................................................................... ...............9CHAPTERS1 INTRODUCTION ................................................................................................................ ..112 LITERATURE REVIEW .......................................................................................................13Cross-National Conflict Shifting ............................................................................................13Crisis Communication ............................................................................................................17Response Strategy ...................................................................................................................18Reputation Management ......................................................................................................... 23News Effectiveness .................................................................................................................26Hypotheses .................................................................................................................... ..........273 METHODOLOGY ................................................................................................................. 30Pilot Study ..............................................................................................................................30Procedure ..................................................................................................................... ....30Pilot Test Results .............................................................................................................31Main Study ..............................................................................................................................31Experimental Design .......................................................................................................31Participants .................................................................................................................. ....32Research Stimuli ..............................................................................................................32Procedure ..................................................................................................................... ....33Independent Variables .....................................................................................................33Dependent Variables .......................................................................................................34Statistical Analysis .......................................................................................................... ........354 RESULTS ..................................................................................................................... ..........36Data Analysis ..........................................................................................................................36Sample Profile .................................................................................................................36Manipulation Check ................................................................................................................36Reliability Check ............................................................................................................. .......37Hypotheses Testing ............................................................................................................ .....37Type of Crisis ..................................................................................................................37Prior Attitude toward Transnational Corporations ..........................................................395 DISCUSSION .................................................................................................................. .......46 6

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Summary of Results ................................................................................................................46Implications for Global Public Relations Theory and Practice ..............................................47Limitations and Future Research ............................................................................................50APPENDIX A EXPERIMENT STIMULI ......................................................................................................53News Story about a Massive Product Recall ..........................................................................53News Story about a Bribery Scandal ......................................................................................54B QUESTIONNAIRE ............................................................................................................... .55LIST OF REFERENCES ...............................................................................................................59BIOGRAPHICAL SKETCH .........................................................................................................65 7

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LIST OF TABLES Table page 4-1 Mean difference of previous attitude toward transnatio nal corporations ..............................414-2 Demographic profile of the participants ................................................................................4 14-3 Manipulation check of stimuli ........................................................................................... ....414-4 Means and standard deviations by different treatment condition ..........................................424-5 Effect of type of crisis on attitude formation .........................................................................424-6 Effect of type of cris is on behavioral intentions ....................................................................434-7 Effect of prior attitude to ward TNCs on attitude formation ..................................................444-8 Effect of prior attitude towa rd TNCs on behavioral intentions .............................................45 8

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Abstract of Thesis Presen ted to the Graduate School of the University of Florida in Partial Fulfillment of the Requirements for the Degree of Master of Arts in Mass Communication THE INFLUENCE OF A CROSS-NATIONAL CONFLICT SHIFTING ON A TRANSNATIONAL CORPOR ATIONS HOST CUSTOMERS BY Hyun Ji Lim August 2008 Chair: Juan-Carlos Molleda Major: Mass Communication The development of interactive media and information technology has prompted the globalization of business trans actions, politics, and economics. Thus, companies are becoming transnational, which includes the three key components of worldwid e learning, multinational flexibility, and national responsiveness. Cross-national conflict shifting (CNCS) theo ry was developed to study public relations practices during such transnational processes, which states that transnational corporations (TNCs) decisions, actions, a nd operations affecting domestic (host) publics in particular countries could also impact tr ansnational publics in many other locations. CNCS theory argues that, if a TNC is involved in a c onflict or crisis in one country, such a crisis could potentially shift to another country or countri es with increased levels of thre at. This, in turn, could taint the TNCs reputation and even cause financia l harm at the transnational level. The purpose of this study was to analyze the pa rticular effects of a home crisis in host countries consumers within the framework of CN CS theory. This study provides an opportunity to gain a greater understanding of how cross-nationa l conflicts or transnati onal crises evolve, as well as ways to test and further the theory. To test the proposed hypotheses, a 2 (type of crisis: a massive product recall vs. a bribery 9

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10 scandal) x 2 (prior attitude toward TNCs: frie ndly vs. unfriendly), one between-subjects and one within-subjects factorial design was implemented Dependent measures examined participants attitudes and behavioral intentions. The results show that the type of crisis signifi cantly affected potentia l customers attitude and behavioral intentions. Further, participants prior attitude toward TNCs did not affect how they perceived the negative publicity about a TN Cs crisis. Both participants who had friendly attitudes toward TNCs and participants with un friendly attitudes showed negative attitudinal and behavioral changes toward the company involved in the crisis. The results of this study provide practitione rs in public relations agencies and in-house practitioners with useful insights into preparing strategies as a crisis communication tool in CNCS. In addition, the results s uggest that many factors should be considered when evaluating the influence of CNCS for future research.

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CHAPTER 1 INTRODUCTION The development of interactive media and information technology has prompted the globalization of business transact ions, politics, and economics a nd has lessened the meaning of traditional geographic barriers among countries. Companies are becoming transnational, which includes the three key component s of worldwide learning, multina tional flexibility, and national responsiveness (Barle tt & Ghoshal, 1989). Molleda and Connolly-Aherns study (2002) st ated that transna tional corporations (TNCs) decisions, actions, a nd operations affecting domestic (host) publics in particular countries could also impact tran snational publics in many other locations. This includes the home publics at the corporatio ns headquarters. Cross-national co nflict shifting (CNCS) theory was developed to study public relations practices during such transn ational processes (Molleda & Connolly-Ahern, 2002; Molleda, Connolly-Aher n, & Quinn, 2005; Molleda & Quinn, 2004). CNCS theory argues that if a TNC is involved in a conflict or crisis in one country, such a crisis could potentially shift to another country or countries with increas ed levels of threat. This, in turn, could taint the TNCs reputation and even cau se financial harm at the transnational level. Research on crisis communication has been gr owing in the public relations field and has received increased recognition (e.g., Benoit, 1997; Coombs, 1995, 1999a; Heath & Miller, 2004; Ihlen, 2002). Regrettably, however, st udies that focus on cross-nati onal or transnational crises have been relatively few. As with most cris es, a cross-national conf lict appears unexpectedly. However, as its effects are global rather than confined to only one country, the consequences could be enormous and greater than is usually anticipated. A cross-national conflict also affects the reputation of a TNC. As the process of globalization matures, the number of TNCs that ar e world-famous is growing rapidly. If a TNC 11

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12 faces a crisis within its home country or in a foreign (host) location, it is most likely that international news attention will follow. News mi ght focus, for instance, on the economic loss of a falling productivity rate or produc t recalls. However, these crises do influence the perception of the corporations reputation for foreign (host) customers. This study, employing an experimental research method, was designed to assess the effect s of home crises on foreign (host) customers and determine which type of crises influence them more. For example, what could be the effects of a lack of leadership due to a bribery i ssue or a recall issue du e to a fatal defect? The purpose of this study was to analyze the pa rticular effects of a home crisis in host countries consumers within the framework of CN CS theory. This study provides an opportunity to gain greater understanding of how cross-nationa l conflicts or transnational crises evolve, as well as ways to test and further the theor y. Specifically, the study focused on how U.S. consumers of automobiles may perceive the co rporate reputation of a major Japanese TNC facing two types of crisis (i.e., a massive pr oduct recall and a briber y scandal), which are reported by the news media. This was accomplished by incorporating other theories such as image restoration theory, corporate reputat ion management, and news effectiveness.

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CHAPTER 2 LITERATURE REVIEW Cross-National Conflict Shifting Today, TNCs have to deal with globally active groups (Berg & Holtbrgge, 2001, p. 112, as cited in Molleda & Connolly-Ahern, 2002). These groups watch over the TNCs behaviors in different operational sites, accord ing to German international business scholars Weldge and Holtbrgge (2001). Berg and Holtbrgge also acknowledged that interest groups in one country condemn multinational corporations fo r what they are doing in other countries (as cited in Molleda & Connolly-Ahe rn, p. 112). Thus, conflicts are no longer incidents that matter only in the single country where they first happe ned; they may be experienced and confronted in other countries where interest groups can best push through their position (Weldge & Holtbrgge, p. 324). There have been studies that have focuse d crisis communication within range of the international arena. Taylors study (2000) analyzed the case of the Coca-Cola scare in Europe. It first started in Belgium when schoolchildren beca me sick after drinking Coca-Cola. The crisis also had an impact in Spain. The study showed that the national culture of a country is a factor that affects the reaction of th e respective host public s. Those who live in countries of high uncertainty avoidance and power distance are likely to react more strongly and more quickly to perceived threats. Freitags study (2001) examined international media coverage of the Firestone Tyre recall case. Freitag discussed potential fact ors that determine media coverage on an issue, such as media structure and function and cultu ral syndromes, which determine crisis planning and response strategies by analyzing media reports. The concept from the theory of interna tional management became foundational when Molleda and Connolly-Ahern (2002) introduced CNCS to the academic world of public relations 13

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study and developed the concept in to a systematic conceptualizat ion of CNCS theory in the international public relations area. As interactive media have acquired unpr ecedented power, the use of Internet communications has made it so that a local i ssue can easily shift across national borders and impact stakeholders internationally. Such a cross-national conflict shif t involves diverse publics at various geographic levels, including host, home, and transnational publics (e.g., NGOs and activist groups, global media outlets, and sh areholders; Molleda & Connolly-Ahern, 2002). Molleda and Connolly-Ahern (2002) introduced a case study to enhan ce understanding of the concept of CNCS where a legal incident involving America Online Latin America (AOLA) in Brazil caused repercussions in U.S. and European financial markets. Molleda and ConnollyAhern further elaborated the conceptualization of CNCS: there are organizational decisions actions, and operations that affect publics in one country and have an impact internationally. This impact seems to be greater at the home country of the organization or organizati ons involved, which could be e xplained by the relevance and proximity of organization for the home public s. Domestic conflicts are increasingly shifting worldwide because of th e growth of intern ational transactions, transportation and communication, especially information technology. (p. 4) Molleda and Quinn (2004) expanded the dynamic of CNCS theory and used four additional cases to illustrate its various component s, which include (1) the characteristics of the issue, (2) the ways a national conflict reache s transnational audiences, and (3) the parties involved or affected (p. 3). To test their study, Molleda and Qu inn suggested the following 10 propositions: P1 Cross-national conflict shifting is mainly related to corporate social performance issues and negative economic c onsequence of globalization. P2 The magnitude of a cross-national conflict sh ifting will increase when it starts in an emergent or developing economy because of the greater pressure the transnational corporation will face in the host country and from the international activist community. 14

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P3 Conflicts that occur in deve loped nations usually have a shorter life and do not cross borders as often as conflicts that start in developing na tions or emergent economies. P4 A greater number of involved parties will ch aracterize a cross-nati onal conflict shift in which a developed nations transnational corpor ation is the principal participant of the crisis. P5 A lower number of involved parties will ch aracterize a cross-national conflict shift in which a developing nation or emergent economy corporation is the pr incipal participants of the conflict. P6 Transnational corporations that produce or commercialize ta ngible, boycottable products are more likely to receive attenti on than those who produce and commercialize intangible services. P7 Transnational corporations h eadquartered in developed nations that produce or are part of a national conflict outside their home country will attract significant attention from global NGOs, international regu latory bodies, national govern ments, organized citizen groups, and international news agencies and global media outlets. P8 The direct involvement of a transnational co rporation in a cross-na tional conflict shift will produce greater consequences and demand a more comprehensive set of response than a transnational corporation that is indirectly related to the issue. P9 National conflicts shift to the international arena when (primarily) global NGOs or media report on the situation to audiences or publics in different parts of the world. P10. National conflicts with a great human-intere st focus are likely to be shifted to the international arena. (pp. 5-7) Molleda et al. (2005) called for more studies to further test and develop the theory of CNCS. Future work is expected to include ca se studies of CNCS not directly involving a government function, other media sources besides newspapers, and a wider range of language sources in cases involving a nonEnglish-speaking country (Molleda et al., 2005). Thus, in this study, a fictitious Japanese automotive compan ys case was used to serve such purposes, focusing on corporate reputation fr om a management perspective. Kim and Molledas study (2005) combined CN CS theory with crisis management by analyzing Halliburtons bribery probe case in Nige ria. Halliburton is an energy company that has 15

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its base in Texas and was once directed by Dick Ch eney, current U.S. Vice President. In order to analyze how Halliburton responded to the issue, the study was based on Coombss (1995, 1999) seven crisis communication strategi es, which are attack, denial, ex cuse, justification, ingratiation, corrective action, and full apology. To assist CN CS theory with a more complex context, including political aspects, Kim and Molleda developed three new complementary propositions from the studys findings as follows P11. Although a transnational co rporation that does not produce or commercialize tangible, boycottable products, if the CEO or top level management have a cohesive relationship with the home country government or another highly visible institution, it will draw more attention from home country medi a, international media, international NGOs and regulatory bodies, and the issue will have gr eater political repercussions and debates. P12. Domestic or national conflicts are not only perceived differently by related parties in the home country and host country, but also framed differently by the host country and home country media. P13. National or domestic conflicts of transnational corporations are sometimes combined with other related conflic ts or issues that negatively aff ect the reputation of transnational corporations in home and host countries and, therefore, require more complex responses and public relations strate gies (until the conflicts resolve). (pp. 14-16) Wang (2005) also analyzed a transnational crisis, the Dupont Teflon crisis, within the theoretical frame of CNCS. The crisis initiate d in the United States because of the U.S. Environmental Protection Agencys action against DuPont, and then it un predictably shifted to China and became a host crisis. This crisis showed a reverse occu rrence of CNCS. Three perspectives were developed from the studys findi ngs to interpret this ki nd of phenomenon: the crisis management performance of the involved transn ational corporation, the level of media interest in the involved issue and the unique and complicated social and cultural context of the involved country (Wang, p. 82). As CNCS theory deals with transnatio nal crises, reviewing theories of crisis communication helps one to develop a better understanding of CNCS. 16

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Crisis Communication According to Seeger and Ulmer (2001), crisis management refers to a set of guidelines regarding the effective assessment of, response to mitigation of, and relie f of a crisis. Typical definitions of crisis management may allude to communication responses: pre-crisis, crisis, and post-crisis (Heath & Millar, 2004). However, an organizations ability to face a crisis and cope with it has been emphasized, as unattended or po orly managed crisis management prevents the organization from making satisfactory and e xpected progress toward achieving its mission. Additionally, stakeholders and stake seekers come to doubt th e organizations ability or willingness to properly control its activities aimed at assuring thei r health, safety, and well being. An organizational crisis is typi cally associated with an untimel y event that has actual or potential consequences for stakeholders interests, as well as the reputation of the organization suffering from the crisis (Heath & Millar, 2004, p. 2). A crisis involves events and outcomes about which key stakeholders attribute cause and responsibility (Coomb s & Holladay, 1996). If poorly managed, a crisis can damage the organi zations reputation and its efforts to create understanding and maintain mutually beneficial relationships with its stakeholders. It may even mature into a public policy issue and affect the organizations ability to compete in the marketplace (Heath & Millar, 2004 ). Today, organizations are b ecoming more susceptible to crises due to a variety of envir onmental developments (Barton, 1993). A crisis also precipitates intense media interest and, therefore, the need to manage the flow of information and the organizations strategic response (Lukaszewaki, 1 987). It is emphasized that officials should speak with one voice in crisis situations, but one that can be understood in several ways. Speaking with one voice sometimes refers to a single speaker. At other times, it refers to the message itself and sometimes the me dium that carries the message (Clarke, Chess, Holmes, & ONeill, 2006). 17

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While much research has examined the range of possible strategic responses to crisis, there are two competing issues that predominat e (Fitzpatrick & Rubin, 1995). First, there are legal issues. Organizations continually face crises such as product tampering, financial problems, environmental spills, airplane crashes, malicious rumors, natural disasters, plant explosions, and the escape of hazardous materials, all of whic h have a profound and dramatic impact on the members of the organization and its surrounding community. Such crises may cause physical, financial, or psychological harm to employees, investors, customers, and community members. These may also threaten the social le gitimacy of the organization and deplete organizational financial resources reputation, and credib ility. Organizations often manage their crises through a crisis team that typically includes a public relati ons officer, intern al and external legal counsel, members of top management, and a crisis spokesperson (Lee, Jares, & Heath, 1999). The legal counsel of an organization often suggests that the organization say as little as possible about the crisis to avoi d creating or increasing liability when in a crisis situation. Sometimes, this may not be in accordance with the public relations perspective view of and strategy for the crisis. Although public relations and legal counselors bring different perspectives to crisis management, it is essential to inco rporate or balance lega l and public relations approaches to effectively manage crises (Fitzpatrick, 1995). Furtherm ore, public relations practitioners suggest that the organization should be as open and forthright as possible to avoid damaging its reputation (Seeger & Ulmer, 2001), wh ich implies maintaining its credibility and legitimacy among its various internal and external publics. Response Strategy Crisis managers should use reasoned acti on when choosing among possible organizational responses in crisis situations. Public relations researchers ha ve developed a systematic and theory-based approach regarding this respons e strategy (Benoit, 1995a; Coombs, 1998a; Coombs 18

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& Holladay, 1996; Heath & Millar, 2004; Ihlen, 2002). In addition to past history indicating that the best way to respond to negative publicity is w ith an internal locus of responsibility, public relations researchers have deve loped newer crisis communication models to address specifically how an organization might defend itself (Coombs & Holladay, 1996). These research findings help practitioners establish a useful framewor k in determining the most appropriate crisis response type, ranging from accommoda tive to defensive strategies. Among the research findings, Coombs (1998a) noted that organizational image can be negatively related to perceived cr isis responsibility. Crisis responsibility represents the degree to which stakeholders blame the organization for th e crisis event. A number of typology systems have been developed by various scholars to categorize response strategies and interpret how corporate entities or individuals execute their self-defense in a crisis situation. Among them, Benoits (1995a) five-strategy, 14subcategory typology is regarded as the most comprehensive image restoration typology widely used in pe rsonal and corporate image repair studies. Benoits typology: Benoit (1995a) argued that reputation as well as other important assets should be well managed in order to achieve the best results. Based on previous research from this background, Benoit developed the image repair typology, which includ es five general strategies: denial, evading of responsibility, reducing the offensiveness of the event, corrective action, and mortification. It is considered the most comprehensive image restoration typology widely used in personal and corporate image re pair studies (Wang, 2005, p. 12). Denial has two subcategories. If the organization wants to deny any responsibility for an event, they use simple denial In contrast, if the organizati on tries to shift the blame to individuals or an outside organization, shifting blame or scapegoating is employed. 19

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Evading responsibility includes the four subcategories of provocation, defeasibility, accident, and good intentions. Provocation is a strategy that involve s arguing that the way the accused organization acted was only in response to another individual or organization that acted offensively. Defeasibility is claiming that the alleged action was a result of the organization not having enough information or control. Accident is a strategy used when the organization argues that the alleged action t ook place by accident. Claiming good intentions entails asserting that even though the action was offensiv e, it was done with good intentions. Reducing the offensiveness of the event consists of six subcategories. Bolstering puts emphasis on the positive aspects of what the organization has and what it has done before. Minimization is used when the organization tries to deemphasize the negative effects following its wrongful act. Differentiation is distinguishing the exact act th at caused the crisis from other related but more offensive acts. Transcendence is putting the alleged act in a more positive context. Attacking the accuser harms the credibility of th e source of the accusation, and compensation pays the victim back in order to reduce the negative effect. Corrective action is the strategy used when the accuse d promises to correct the problem by taking action such as keeping the same pr oblem from occurring again and restoring the operation to its previ ous condition. Lastly, mortification is a strategy that is used when the accused confesses wrongdoing and asks for forgiveness (Benoit, 1995a). Benoits image restoration strategies ar e classified according to how much the organization feels responsible for the crisis a nd the attitude that they are willing to take responsibility for the crisis. What is unique in Benoits strategies is that the apology is divided into corrective action and mor tification. Corrective action was one of subcategories in the 20

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apology in Goffmans study (1971). However, correc tive action is different from mortification, as it can be taken without admitting fault. Coombs and Schmidt (2002) conducted an e xperimental study regarding the case of Texacos racism crisis based on Benoits (1995) theory of image restoration. In late 1996, a lawsuit regarding racial discrimina tion was raised against Texaco in which secret tape recordings revealed that racially discriminatory language had been used by top executives. Because of the recording, an enormous amount of negative publicity was triggered that endangered the reputation of Texaco. This crisis was settled by the prompt action of the CEO of Texaco, who swiftly punished those who were involved. Coombs and Schmidt repor ted that during this action, four image restoration strategies were used( a) bolstering, (b) correct ive action, (c) shifting blame, and (d) mortificationin addition to one more strategy combining three image restoration strategies: (e) sepa ration, a combination of bolsteri ng, shifting blame, and corrective action. Separation has been presented as a new form of image restoration strategy by analysts (Brinson & Benoit, 1999, as cited in Coombs & Schmidt, p. 166). Drumheller and Benoit (2004) studi ed cultural issues in image repair disclosure using the case of the USS Greenevilles collision with Japans Ehime Maru The USS Greeneville collided with the Japanese trawler the Ehime Maru near Pearl Harbor, and nine people in the trawler were killed. Because there were 16 civilians on the Gr eeneville as part of an U.S. Navy public relations effort, questions were raised about wh ether the visitors had be en a distraction that contributed to this tragedy (Seaquist, 2001, p. OP9). When making image restoration efforts in this case, the U.S. Navy used mortification, wh ich was largely appropriate, considering Japanese culture. It was expected for Capt ain Waddle to apologize directly to the victims families in Japan, but this did not happe n. This study shows the importance of making efforts through 21

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diplomacy in image repair, especially when it comes to cultural issues In addition, it suggests that the idea of using the instigator as a spokesperson is ideal, as is empha sizing that the incident was an accident in order to defend oneself against the claim of responsibility. Coombss typology: Coombss (1998) seven-category t ypology is believed to be most closely related to public relati ons efforts (Seeger, Sellnow, & Ulmer, 2003, as cited in Wang, 2005, p. 12). Coombs suggested that there are seven possible response types to negative or crisis situations: attack the acc user, denial, excuse, justification, ingratiation, corrective action, and full apology. Attack the accuser is defined as confronting the pers on or group who claims that a crisis exists, which may include a threat to use for ce such as a lawsuit ag ainst the accuser (Coombs, 1998, p. 180). This strategy is used in situations in which an orga nization does not feel at all responsible for the crisis. Denial means not acknowledging that the crisis exists and includes not explaining why there is no cris is (Coombs, 1998). Making an excuse entails trying to minimize the organizations responsibility for the crisis and can include denying any intention to do harm, claiming the organization had no control of the events that led to the crisis, or both (Coombs, p. xx). A justification is different from an excuse in that it is an attempt to minimize the perceived damage associated with the cr isis; it represents a situation in which the organization feels more responsible for the crisis (Coombs, p. 180). Ingratiation is similar to Benoits bolstering. Crisis managers employing i ngratiation try to make stakeholders like the organization or remind stakeholders that the or ganization has done good things for them in the past. This strategy lies in the middle of Coombss list; it cannot be said in simple terms whether the organization feels responsible or not. When an organization us es the strategy of ingratiation, it feels a certain amount of respons ibility for the crisis but tries to make st akeholders not feel 22

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very negative about the crisis situation by remi nding them of the organizations past good actions. Corrective action is seeking to repair the damage from the crisis, taking steps to prevent a repeat of the crisis, or both (Coombs, p. xx); th is is different from simple compensation action because it is an effort to prevent the crisis from occurring again. A full apology occurs when crisis managers publicly admit that the organization takes full responsibil ity for the crisis and ask forgiveness for the crisis (Coombs, p. 180). A defensive response such as denial or mi nimizing might work most effectively when public perception of crisis responsibility is weak; however, if such crises have occurred in the past, the perception of crisis responsibility is intensified. In those cases, Coombs (1998) suggested that organizations with a poor performance history that are experiencing a crisis with an internal locus of control should respond w ith mortification. This manner of response attempts to win forgiveness of the publics and to create acceptance for the crisis (Coombs, 1995, as cited in Lyon & Cameron, 2004, p. 218). When a publics perception of crisis responsibility strength ens, the threat of image damage beco mes stronger. This means that crisis managers need to utilize more accommodative st rategies. Accommodative strategies emphasize image repair, which is what is increasingly needed as image damage worsens (Benoit, 1997). Reputation Management Public relations practitioners are responsible for managing th e creation and maintenance of a companys reputation, which has long been seen as a bankable asset (Caruana, 1997), as they must communicate to various publics about wha t the organization is (Wilcox, Ault, Agee, & Cameron, 2000, as cited in Lyon & Cameron, 2004, p. 215). According to Lerbinger (1997), corporate reputation can affect everything from stock values to employee morale. Corporate reputation has been variously de fined. Coombs (2000) defined the general reputation of an organization in terms of a relational history, which is built by consistently 23

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delivering more than what stakeholders expect. This can include cutting edge treatment of customers, open access to the media and extensive involvement in the social fabric of the community (Coombs, p. 81). Weigelt and Camerer (1988) asserted that corporate reputation is a set of economic and non economic attributes ascrib ed to a firm, inferred from the firms past actions (p. 443). People sometimes confuse corporate reputation with corporate image and even consider the terms synonymous (Dowling, 1993). Thus, it is important to note th e distinction between corporate reputation and corporate image. Reputati on differs from corporate image in that it is owned by the publics (Lyon, 1999). When referred to as image, it means an inside-out proposition and is all about how the company wants to be viewed (Caudron, 1997, as cited in Lyon & Cameron, 2004, p. 215). Companies can mana ge their images through various controlled signals such as corporate advertising, sponsorships, and special events. However, reputation is not formed by fancy packaging or catchy slogans (Caudron, 1997, p. 15). A good reputation is created and destroyed by everything a company does, from the way it manages employees to the way it handles complaints (Caudron, 1997, p. 15). Even a companys previous resource allocation and history can be re garded as part of its reputa tion (Frombrun & Van Riel, 1997). Each public forms the reputation of a firm base d on its direct and indi rect experience and information (Fombrun & Shanley, 1990; Sulliv an, 1990). Experience can be a source of information. Even indirect experience such as word of mouth and media exposure can form the reputation of a firm as much as direct experi ence (Caruana, 1997). Caruana also argued that reputation has two components: an overall impr ession and an object-specific one. The overall impression component exists at a corporate level when the corporate name is used as a brand by 24

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the firm, while the product-speci fic component reflects those attr ibutes that ar e identified as belonging to one product or another. Caruana (1997) tried to measure corporate reput ation both quantitatively and qualitatively and found that a positive halo effect exists on interfirm activities. This means that a firm with a positive corporate reputation has a higher chance of success in efforts to find a good partner in any type of alliance, whether in the area of product innovation, bringing stab ility to cyclical business, or distribution. While Caruanas study (1997) focused on inte rfirm aspects, Helm (2007) integrated different stakeholders percepti ons of corporate reputation with in one empirical design and delivered insights to specific st akeholder groups. Helm suggested that a firm does not have one distinct reputation and provided another interpretation, arguing that reputational perceptions integrate the boundaries of each stakeholder group, forming a general reputation of the firm. The definition developed from this pe rspective is that a corporate re putation is a collective construct that describes the aggregate perceptions of multiple stakeholders about a companys performance (Fombrun, Gardberg, & Sever, 2000, p. 242). It is a synthesis of the opinions, perceptions, and attitudes of an organizations stakeholders (Post & Griffin, 1997, p. 165). Helm implemented a study with three stakeholde r groups: consumers, inve stors, and employees. Helm argued that if significant differences ex ist between the stakeholder groups perceptions, they indicate weaknesses in reputation. Thus, a homogeneous reputation is evaluated as a more valuable asset (Nguyen & Leblanc, 2001). Kiousis, Popescu, and Mitrooks study (2007) explored the impact of corporate public relations messages on media coverage of a corpor ation, on corporate reputation, and on financial performance (p. 158). The research was notewort hy, as it extended a theoretical framework of 25

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corporate reputation by incorporating agenda-bui lding and agenda-setting theories. It was found that emphasizing different attr ibutes through different media outlets helps bring effective contributions. This has implications related to more strategic use of media relations efforts for managing corporate reputation by targeting ma ss media outlets (Kiousis et al., p. 161). Levitt (1954, as cited in Fan, 2005) argued that corporate reputation can be defined in terms of a number of attributes that form a buye rs perception as to whether a company is well known as good, bad, reliable, trustworthy, reputable, or believable. Fan suggested the importance of ethical branding because an ethical bra nd may enhance the corporations reputation. As recent scandals have shown in the case of Enron and Anderson Consulting, any unethical behavior will severely damage or even destroy this intangible asset. Fan argued that ethical branding could provide the company with a diffe rential advantage as a growing number of consumers become more ethically conscious (Fan, 2005). News Effectiveness Kim, Carvalho, and Cooksey (2007) examined th e effects of negative publicity on public perceptions of a university. This can be related to finding out the relationship between the negative publicity of a country and public per ception of that country. They figured out that greater exposure to unfavorable news articles was associated with lower levels of perceived reputation and trust, and that th ese unfavorable perceptions were in turn related to decreased support for the university. This study showed that negative publicity does more than shape perceptions; it may have effects on various forms of public support that si gnificantly affect an organizations current an d future undertakings. Park and Lee (2007) tested the effects of an online news forum on peoples perception of the corporate reputation of a company. As the In ternet has been easy for everyone to access in 26

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this age of interactive media, the recent popularity and pervasiveness of uncensored opinions have created unprecedented challenges. Moreover, to monitor all negative postings against an organization is almost impossible on the Inte rnet. Park and Lee found significant interaction effects between the two factorstone and num ber of commentswith regard to peoples perception of the companys social responsiveness and employee treatment. As it has been reported that the Web has a significant role in disseminating information (Fjeld & Molesworth, 2006) and it has been suggested that the Internet has the potential to m ove crisis communication forward in several important ways (Holtz, 2002; Phillips, 2001), dealing with online publics has a significant effect when a TNC faces a crisis. Hypotheses If a TNC whose brand is known worl dwide faces a crisis, the effect of the crisis will not be limited to the host or home location. Supported by this theoretical background, this research developed four hypotheses testing the influence of a cross-na tional conflict on a TNCs host (foreign) customers or even pot ential customers. This was done from the perspective of reputation management. It is expected that manufact uring firms are responsible fo r guaranteed pr oduct quality; hence, they have a moral duty to make safe pr oducts (Boatright, 1993; Velasques, 1982). Product safety is becoming a big issue when customers make purchase decisions. Research results have shown that customers indicate less favorable at titudes toward brands that are known as unsafe brands (Curlo, 1999). When it comes to products that threaten peoples lives when safety is not guaranteed, such as automobiles, customers are mo re likely to be influenced by negative news stories regarding product safety. Thus, the following hypotheses were formulated. H1. Subjects exposed to a news story about a massive product recall of a transnational company (X1) which happened at an ove rseas location would exhibit a more negative attitude 27

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toward the company than those exposed to a ne ws story about a bribery scandal involving the same company (X2). H1a : Subjects exposed to a news story about a massive product recall of a trans national company which happened overseas would rate the company as more an tisocial. H1b : Subjects exposed to a news story about a massive recall issue of a transnat ional company which happened overseas would rate the company as more unlik able. H1c: Attitude toward the company is more negative in subjects exposed to a news stor y about a massive product recall of a tran snational company which happened overseas. H2. Subjects exposed to a news story about a massive product recall of a transnational company (X1) which happened at an overseas location would exhibit more negative behavioral intentions toward the company than those exposed to a news story about a bribery scandal involving the same company (X2). H2a : Purchase intention is lower in subjects exposed to a news story about a massive p roduct recall of a tr ansnational company which happened overseas. H2b : Investment intention is lower in subjec ts exposed to a news story about a massiv e product recall of a transnational company which happened overseas. H2c: Likelihood of recommending the company to a friend is lower in subjects expose d to a news story about a massive product re call of a transnational company which hap pened overseas. H2d : Likelihood of requesting more information about the company is lower in subject s exposed to a news story about a massive product recall of a tr ansnational company w hich happened overseas. Previous research has revealed that cu stomers who are ethnocentric believe that purchasing a foreign companys prod ucts is essentially wrong. They consider such action to be hurtful to the local economy, to cause job loss, and to be unpatriotic (Shimp & Sharma, 1987). In other words, ethnocentric customers have an ev ident predilection for hom e-country products and a strong bias against products origin ating from other countries (Oh, 2001). 28

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29 Consumer ethnocentrism, which is defined as beliefs customers have about the appropriateness and morality of purchasing products from a foreign country, may affect people to have a bias against TNCs whose headquarters are in foreign countries. Customers who have an unfriendly attitude toward TNCs may tend to be more influen ced by negative publicity regarding crises that TNCs have faced. To test this, th e following hypotheses were developed based on the existing literature. H3. Subjects who showed an unfriendly attitude toward transnational corporations (Y1) would exhibit more negative attitude toward a transnational company which had a crisis in its home country than those who s howed friendly attitude (Y2). H3a : Subjects who showed an unfriendly attitude toward transnational corporations w ould rate the company as being antisocial. H3b : Subjects who showed an unfriendly attitude toward transnational corporations w ould rate the company as more unlikable. H3c: Attitude toward the company is more negative in subjects showed unfriendly attitude toward transnational corporations. H4. Subjects who showed an unfriendly attitude toward transnational corporations (Y1) would exhibit more negative behavioral intentions toward a transnational co mpany which had a crisis in its home country than those who showed friendly attitude (Y2). H4a : Purchase intention is lower in subjects who showed an unfriendly attitude toward transnational corporations. H4b : Investment intention is lower in subjec ts who showed an unfriendly attitude towa rd transnational corporations. H4c: Likelihood of recommending the company to a friend is lower in subjects who sh owed an unfriendly attitude toward transnational corporations. H4d : Likelihood of requesting more information about the company is lower in subject s who showed an unfriendly attitude toward transnational corporations.

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CHAPTER 3 METHODOLOGY To answer the proposed research questions a nd test the proposed hypotheses, a 2 (previous attitude toward TNCs: friendly vs. unfriendly) x 2 (kind of crisis: a ma ssive product recall vs. a bribery scandal) factorial desi gn was developed. The independent variables were negative news stories about a foreign companys home crises and previous negative or positive attitude expressed toward TNCs. Two types of negativ e publicity about a massi ve product recall and a bribery scandal were developed to find out whet her the quality of the companys product or the ethical behavior of the company had more in fluence over potential customers perceived reputation of a transnational company. The depe ndent variables were attitude formation and behavioral intention. Prior to the main experiment, a pilot study was conducted. Pilot Study The initial research design of this study used the example of the Japanese automotive company Toyota. The purpose of the pretest was to identify whether negative publicity about a transnational crisis works as a stimulus successf ully to change peoples behavioral intentions regarding the company. Procedure Twenty-one college students from a southeaste rn university enrolled in the public relations major participated in a pilot test to ensure that the negative publicity successfully worked as a stimulus. Only one kind of negativ e publicity was chosen in order to see the effect of the same material on all participants. Students were first asked to answer a pretest questionnaire about their perception of Toyota and their willingne ss to buy Toyotas product, invest in Toyota, recommend Toyotas product to a friend, and request more information about the company. Each questionnaire response was measured on a Likert scale ranging from 1 ( strongly disagree ) to 7 30

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( strongly agree ). In addition, a thought-l isting question was employed in which participants wrote down five words that described their thought s about Toyota. Next, pa rticipants were asked to read a negative publicity ar ticle about Toyotas massive product recall for 10 minutes. In the posttest session, the participants were required to answer the same questionnaire as in the pretest to measure their perceptions of Toyota and thei r behavioral intentions regarding the company. Pilot Test Results Due to strong existing attitudes toward the company, the negative publicity seemed not to work as a research stimulus. Significant di fference was only found in purchase intention ( t = 3.623, df = 20, p = .002) and likelihood of recomme nding Toyotas product to a friend ( t = 5.061, df = 20, p = .000). In the results of the thought-l isting question, it was more obvious that the negative publicity did not work as a stimulus to change perceptions, as there were a number of answers indicating that participants thought of the words dependable long-lasting, good quality, service, nice safety and socially responsible when it came to Toyota. This was considered the result of Toyotas strong brand re putation and showed the problems with using an existing company as an example. Therefore, th e research design of the study was changed to feature a pseudo company, and a posttest-only meas ure experimental design was implemented.. Main Study Experimental Design A 2 x 2, one within-subject (prior attitude toward TNCs: friendly vs. unfriendly) and one between-subject (news story about a massive product recall issue a nd a bribery scandal) factorial design was implemented. The experiment involved tw o versions of the questionnaire: one with a news story about a massive product recall by a Ja panese transnational company and the other containing a news story about a bribery scandal involving the sa me company. The questionnaire was randomly distributed among the sample. 31

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Participants On the basis of convenience sampling, undergraduate students attending a large southeastern university were recr uited, and extra credit was given fo r their participation in data collection. College students were an appropriate sample for th is study because they can be regarded as one important public that can influe nce a companys public rela tions activity, as they actively participate as agenda builders through online social media (Bae & Cameron, 2006). In addition, Basil (1996) argued that using college students as a sample is appropriate when researching a hypothesized relationship among variables. Two hundred one students in communications courses voluntarily participated in the study. Th e participants were randomly assigned to one of two conditions, where each gr oup reviewed a news article about a companys crisis regarding either a massive product recall or a bribery scanda l. Participants completed the experiment during their class session and were treated in accordance with the universitys institutional review boards guide lines involving human subjects. Research Stimuli As stimulus material to be shown to part icipants, two news stories about a Japanese automotive company were created based on real news stories. However, the company was a fictitious one with a pseudo-brand name to control for participants preexisting attitudes toward a real company. The name of the company and people s names in the news story were changed to fictitious names, and some paragraphs were modified to remove items that would trigger participants recognition. Two vers ions of the news stories were made reflecting two types of crisis that the company had faced: a massive pr oduct recall and a bribery scandal involving the CEO and managerial st aff of the company. According to Bae and Camerons study (2006), it is known that fictitious organizations can successfully trigger people s suspicion toward the organi zation. Their study used news 32

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stories with fictitious company names to mani pulate the perceived reput ation of a for-profit organization and a nonprofit one, and the result showed th at the fictitious news stories about organizations reputation triggere d peoples suspicion successfully. Procedure Students were recruited from an undergraduate class in the public relations major at a southeastern university. They were informed in a class session that there would be an extra credit opportunity if they completed th e study. Two hundred one subjects participated in this study, and students were randomly assigned to two groups accord ing to the last digit of their student ID numbers. Students with odd number s were placed in Group 1 and we re exposed to the news story about a bribery scandal, and students with even numbers were placed in Group 2 and shown the news story about a massive product recall. Students were first asked to de scribe their attitude toward TNCs and were then exposed to the stimulus material. After reading the news stor y, subjects began to an swer the questionnaire to measure their attitudes and behavioral intentions. After completing the questionnaire, subjects were debriefed on the studys purpose and tha nked for their participation. The whole session took about 15 minutes, from explaining the procedure to the debriefing. Independent Variables Negative publicity: Negative publicity is defined as the non -compensated dissemination of potentially damaging information by presenting disparaging news about a product, service, business unit, or individual in print or broadcast media or by word of mouth (Sherrell & Reidenbach, 1986, p. 38). This study examined whether the attitude and behavioral intentions of potential customers are different depending on the type of such negative publicity (a bribery scandal or a massive product recall). 33

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Prior attitude toward tr ansnational corporations: Based on Ohs study (2001), attitude toward TNCs was measured in three elements: business conduct, social conduct, and quality of product. Participants were asked to describe th eir attitude on a 7-point Likert scale (from 1 = strongly disagree to 7 = strongly agree) in response to the following statements: (a) transnational companies contribute to the development of the U.S. economy, (b) transn ational companies are plundering capital in the United Stat es, (c) transnational companies invest money to stimulate the growth of the U.S. economy, (d) transnational companies are not necessary for U.S. industry, (e) transnational companies influence on U.S. business is negative, and (f) transnational companies products are excellent. Dependent Variables Based on Lyon and Camerons study (2004), ques tionnaires were written with two main criteria in mind: attitude formation and behavi oral intentions in th e short and long terms. Attitude: Attitude is defined as a general positive or negative feeling ab out an object that consistently affects peoples be haviors (Petty & Cacioppo, 1981, as cited in Bae, 2006, p. 43). Attitude was measured in two ways. General at titude toward the company was measured by MacKenzie and Lutzs (1989) scale w ith three 7-point bipolar items ( goodbad, favorable unfavorable and pleasantunpleasant ). Attitude was also assessed using semantic differential items that asked subjects to rate, on a 7-point scale, how prosocial each company was (from 1 = antisocial to 7 = prosocial ) and how likeable each company was (from 1 = very unlikable to 7 = very likeable ) based on Lyons study (2006). Behavioral intentions: Participants intention to behave was measured by using semantic differential scales. Questionnaires asking how likely the participan ts would be to behave were measured as the likelihood (from 1 = very unlikely to 7 = very likely) of each of the following: 34

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investing in the company, recommending the co mpanys products to a friend, and requesting more information about the product. Purchase intention is defined as the degree of in tention to perform product purchase (Bae, 2006, p. 59). To measure the purchase inten tion, this study used Bearden, Lichtenstien, and Teels (1984) scale with three items (from very unlikely to very likely from improbable to probable and from impossible to possible ). Each item was measured with a 7-point bipolar scale. Statistical Analysis Data collected were analyzed using SPSS 15.0 for Windows. Descriptive statistics were run to study the sample composition, and analys is related to the group differences caused by treatment factors (the type of crisis and the leve l of attitude toward TNCs) was tested by analysis of variance (ANOVA). 35

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CHAPTER 4 RESULTS Initial Sample Analysis A total of 200 subjects participated in this study. There were no missi ng answers, thus the total valid sample was 200. The mean score for previous attitude toward TNCs was 4.58, with a standard deviation of 0.84 and a range of 5.33. Then the score for prior attitude toward TNCs was categorized into friendly and unfriendly at titude groups via median split. Those who scored 4.50 and lower (48.5%) were classified in the unfriendly attitude toward TNCs group ( M = 3.91, SD = .60), and participants with 4.60 and higher scores (51.5%) were labeled as members of the friendly attitude toward TNCs group ( M = 5.22, SD = .46). The mean differe nce was statistically significant ( t = -17.51, df = 198, p < .001; See Table 4-1). Data Analysis Sample Profile Among 200 valid observations, 32% ( N = 64) were male and 68.0% ( N = 136) were female. The participants age ranged from 18 to 30 years old ( M = 20.33, SD = 1.53), but the majority of the participants were between 18 and 22 (94.0%) years old (See Table 4-2). Manipulation Check For a manipulation check of the positive a nd negative news stories, participants ( N = 200) were asked two questions, respectively: (a) How do you feel about the tone of the news article you just read? and (b) Do you think other people will be positively or negatively influenced by this news story? For each question, a 7-poi nt bipolar rating scal e was used ranging from negative (1) to positive (7). 36

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As shown in Table 4-3, the ANOVA for the mean scores of particip ants recognition of both negative news stories showed a significant difference between the two means [ = 2.99, = 2.12, F (1,198) = 45.26, p < .05]. The mean scores of both groups were much lower than the item four, which was the neut ral point between negative and positive on the 7point scale. Likewise, participan ts thought that other people also recognized the negative news stimulus as a negative news story. This mean difference was also statistically significant [ = 2.56, = 1.81, F (1,198) = 39.21, p < .05]. Thus, it is assumed that participants who read a negative news stimulus perceived it as a negative news story. In addition, participants thought that other people would think as they thought. briberyMMrecallMrecallMbriberyReliability Check Results showed that the scales used in the study were reliable according to Cronbachs alpha levels. Cronbachs alpha for prior attitu de toward TNCs was .75. Reliability measures suggested high internal consistency for the dependent variables, attitude toward company (Cronbachs alpha = .89) and be havioral intention toward co mpany (Cronbachs alpha = .86). Hypotheses Testing Type of Crisis Hypothesis 1: The first hypothesis states that subjects exposed to a news story about a massive product recall of a transnational company that happened at an overseas location would exhibit more negative attitudes toward the comp any than those were exposed to a news story about a bribery scandal involving the same comp any. Attitude formation was measured by the semantic differential scales asking subjects how prosocial the company was, how likeable the company was, and the general attitu de retrieved from three items of bad or good, unfavorable or favorable, and unpleasant or pleasant 37

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ANOVA was conducted to test the influence of the type of crisis on dependent variables. As described in Table 4-5, a significant differe nce was found in the measurement of a company's prosocial stance [ F (1,198) = 36.58, p = .000], the likeability measure [ F (1,198) = 44.33, p = .000], and general attitude [ F (1,198) = 32.45, p = .000]. As shown in Table 4-4, subjects exposed to a news story about a massive recall answered that the company was more antisocial ( = 4.19, SD = 1.05, = 3.30, SD = 1.03), stated that the company was more unlikable ( = 3.52, SD = 1.16, = 2.41, SD = 2.00), and exhibited a more negative general attitude ( = 3.08, SD = 0.92, = 2.29, SD = 0.95) than subjects exposed to a news story about a bribery scandal. Therefore, Hypothesis 1 was supported. These results illustrate that pa rticipants attitude toward the company was affected by the type of the crisis it faced. briberyM MrecallMbriberyrecallMbriberyMrecallM Hypothesis 2: The second hypothesis states that subjec ts exposed to a news story about a massive product recall of a transnational company that happened at an overseas location would exhibit more negative behavioral intentions toward the company th an those who were exposed to a news story about a bribery scandal involving th e same company. Behavior al intentions were measured by the semantic differential scales as king subjects about thei r likelihood of purchasing the companys product, investing in the comp any, recommending the companys product to a friend, and requesting more information about the product. ANOVA was conducted to test the influence of the type of crisis on the depe ndent variables of behavioral intentions. As shown in Table 4-4, participants exposed to a news story about a massive recall exhibited lower purchase intention ( = 3.28, SD = 1.10, = 1.97, SD = 1.05), lower investment intention ( = 2.02, SD = 1.16, = 1.71, SD = 1.18), lower likelihood of briberyMrecallMbriberyMrecallM 38

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recommending the product to a friend ( = 2.72, SD = 1.29, = 1.79, SD = 1.14), and lower likelihood of requesting more information about the company ( = 3.12, SD = 1.47, = 2.59, SD = 1.84) than those exposed to a story involving a bribery scandal. briberyMrecallMMbriberyrecallM As described in Table 4-6, a significant di fference was found in measurement of purchase intention [ F (1,198) = 74.34, p = 000], likelihood of recommending the product to a friend [ F (1,198) = 29.25, p = .000], and likelihood of requesting mo re information about the company [ F (1,198) = 5.07, p = .03]. However, there was not a signi ficant difference in measurement of investment intention [ F (1,198) = 3.49, p = .06]. Therefore, Hypotheses 2a, 2c, and 2d were supported. Hypothesis 2b was not supported. These results illustrate that subjects attitude toward the company was generally affected by the type of the crisis it faced. Prior Attitude toward Transnational Corporations Hypothesis 3. The third hypothesis states that subject s who showed an unfriendly attitude toward TNCs would exhibit more negative attitu des toward a transnational company that had a crisis in its home country than those who s howed a friendly attitude. Attitude formation was measured by the semantic differential scales as king subjects how prosocial the company was and how likeable the company was, as well as general attitude retrieved from three items of bad or good, unfavorable or favorable, and unpleasant or pleasant ANOVA was conducted to test the influence of the type of crisis on the dependent variables. As described in Table 4-7, only measuring the companys prosocial stance produced a significant difference [ F (1,198) = 4.22, p = .04]. There was no signi ficant difference when measuring how likeable the company was [ F (1,198) = 0.00, p = .95] and general attitude [ F (1,198) = 1.51, p = .22]. 39

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As shown in Table 4-4, subjects who had unfriendly prior attitudes toward TNCs answered that the company was more antisocial ( = 3.58, SD = 1.10, = 3.90, SD = 1.14), stated that the company was more unlikable ( = 2.96, SD = 1.21, = 2.97, SD = 1.39), and exhibited a more negative general attitude ( = 2.59, SD = 0.66, = 2.78, SD = 0.66) than subjects with friendly pr ior attitudes toward TNCs. Therefore, Hypotheses 3b and 3c were not supported. Only Hypothesis 3a was s upported. These results illustrate that subjects attitude toward the co mpany was not affected by their prior attitude toward TNCs. unfriendlyM MfriendlyM MunfriendlyMfriendlyMunfriendly friendlyHypothesis 4. The fourth hypothesis states that s ubjects who showed unfriendly attitudes toward TNCs would exhibit more negative behavior al intentions toward a transnational company that had a crisis in its home country than those who showed friendly attitudes. ANOVA was conducted to test the influence of the type of crisis on the de pendent variables on behavioral intentions. As shown in Table 4-4, subjects who had unfrien dly prior attitudes toward TNCs exhibited lower purchase intention ( = 2.55, SD = 1.21, = 2.70, SD = 1.29), exhibited higher investment intention ( = 1.90, SD = 1.29, = 1.83, SD = 1.08), were more likely to recommend the companys product to a friend ( = 2.35, SD = 1.32, = 2.17, SD = 1.28), and were less likely to request more information about the company ( = 2.78, SD = 1.58, = 2.92, SD = 1.78) than subjects with frie ndly prior attitudes toward TNCs. unfriendlyMunfriendlyMfriendlyMfriendlyMunfriendlyMfriendlyMunfriendlyMfriendlyMAs described in Table 4-8, no significant diffe rences were found when measuring purchase intention [ F (1,198) = .71, p = .40], investment intention [ F (1,198) = .14, p = .71], the likelihood 40

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41 of recommending the product to a friend [ F (1,198) = 1.02, p = .31], and the likelihood of requesting more information about the company [ F (1,198) = .34, p = .56]. Therefore, Hypothesis 4 was not supported. These results i llustrate that subjects behavioral intentions toward the company were not affected by their prior attitudes toward TNCs. Table 4-1. Mean difference of previous at titude toward transnational corporations Measure Treatment N Mean SD t df Previous Attitude toward TNC Unfriendly 97 3.91 0.6 -17.51*** 198 Friendly 103 5.22 0.46 Note. Items in the prior attitude toward TNCs scale were measured on a 7-point scale ranging from 1 (strongly agree) to 7 (strongly agree). *** p < .001 Table 4-2. Demographic prof ile of the participants Frequency Valid Percent Gender Male 64 32 Female 136 68 Total 200 100 Age 18-20 116 58 21-23 76 38 24-30 8 4 Total 200 100 Table 4-3. Manipulation check of stimuli Stimuli M S.D. F Negative Publicity 1. Respondents' recognition a) a massive product recall 2.99 1.04 45.26** b) a bribery scandal 2.12 0.77 2. Others' recognition a) a massive product recall 2.56 0.82 39.21** b) a bribery scandal 1.81 0.87 N=200, ** p < .01

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Table 4-4. Means and standard devia tions by different treatment condition Dependent Variables Mean (SD) Treatment Attitude Formation Behavioral Intentions Prosocial measure Likeability measure General Attitude Purchase Intention Investment Intention Likelihood of recommending the product Likeability of requesting information Type of Crisis Bribery 4.19 (1.05) 3.52 (1.16) 3.08 (0.92) 3.28 (1.10) 2.02 (1.16) 2.72 (1.29) 3.12 (1.47) Recall 3.30 (1.03) 2.41 (2.00) 2.29 (0.95) 1.97 (1.05) 1.71 (1.05) 1.79 (1.14) 2.59 (1.84) Prior Attitude toward TNC Unfriendly 3.58 (1.10) 2.96 (1.21) 2.59 (0.66) 2.55 (1.21) 1.90 (1.29) 2.35 (1.32) 2.78 (1.58) Friendly 3.90 (1.14) 2.97 (1.39) 2.78 (0.66) 2.70 (1.29) 1.83 (1.08) 2.17 (1.28) 2.92 (1.78) Table 4-5. Effect of type of crisis on attitude formation Variable Mean SS df MS F p How prosocial the company is Within + Residual 214.39 198 1.08 Type of Crisis 39.61 1 39.61 36.58 0.00 A bribery scandal 4.19 Massive recall issue 3.3 How likeable the company is Within+Residual 275.15 198 1.39 Type of Crisis 61.61 1 61.61 44.33 0.00 A bribery scandal 3.52 Massive recall issue 2.41 General Attitude Within+Residual 195.25 198 0.99 Type of Crisis 32 1 32 32.45 0.00 A bribery scandal 3.08 Massive recall issue 2.29 42

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Table 4-6. Effect of type of cr isis on behavioral intentions Variable Mean SS df MS F p Purchase Intention Within+Residual 227.37 198 1.15 Type of Crisis 85.37 1 85.37 74.34 0.00 A bribery scandal 3.28 Massive recall issue 1.97Investment Intention Within+Residual 272.55 198 1.38 Type of Crisis 4.81 1 4.81 3.491 0.06 A bribery scandal 2.02 Massive recall issue 1.71Likelihood of recommending the product to a friend Within+Residual 292.75 198 1.48 Type of Crisis 43.25 1 43.25 29.25 0.00 A bribery scandal 2.72 Massive recall issue 1.79Likelihood of requesting information Within+Residual 548.75 198 2.77 Type of Crisis 14.05 1 14.05 5.07 0.03 A bribery scandal 3.12 Massive recall issue 2.59 43

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44 Table 4-7. Effect of prior attitude toward TNCs on attitude formation Variable Mean SS df MS F p How prosocial the company is Within + Residual 248.7 198 1.26 Prior Attitude toward TNCs 5.3 1 5.3 4.22 0.04 Unfriendly 3.58 Friendly 3.9 How likeable the company is Within + Residual 336.75 198 1.7 Prior Attitude toward TNCs 0.01 1 0.01 0.00 0.95 Unfriendly 2.96 Friendly 2.97 General Attitude Within + Residual 225.53 198 1.14 Prior Attitude toward TNCs 1.72 1 1.72 1.51 0.22 Unfriendly 2.59 Friendly 2.78

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Table 4-8. Effect of prior attitude toward TNCs on behavioral intentions Variable Mean SS df MS F p Purchase Intention Within + Residual 311.62 198 1.57 Prior Attitude toward TNC 1.12 1 1.12 0.71 0.4 Unfriendly 2.55 Friendly 2.7 Investment Intention Within + Residual 277.16 198 1.4 Prior Attitude toward TNC 0.20 1 0.2 0.14 0.71 Unfriendly 1.9 Friendly 183 Likelihood of recommendint the product to a friend Within + Residual 334.28 198 1.69 Prior Attitude toward TNC 1.72 1 1.72 1.02 0.31 Unfriendly 2.35 Friendly 2.17 Likelihood of requesting information Within + Residual 561.83 198 2.84 Prior Attitude toward TNC 0.96 1 0.96 0.34 0.56 Unfriendly 2.78 Friendly 2.92 45

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CHAPTER 5 DISCUSSION Summary of Results This study was designed to identify the impact that various conditions and variables have on the influence of a cross-nationa l conflict shift on host publics. Specificall y, the results identify the effect that the type of crisis variable has on host consumers attitude formation and behavioral intentions. Type of crisis: The sets of H1 and H2 stated that th e type of crisis would affect subjects attitude formation and behavioral intentions. Subjects exposed to the news story about a massive product recall of a TNC rated the company as more antisocial and more unlikable than those exposed to the news story about a bribery scanda l of the same company. They also exhibited a more negative general attitude toward the company than those exposed to the news story about a bribery scandal. Thus, these results support Hypothesis 1. Hypothesis 2 was also generally supporte d by the dependent va riables of purchase intention, recommending the companys product to a friend, and requesting more information about the company. However, no significant di fference was found in investment intention. Likelihood of investing in the comp any did not seem to be affected by the short-term exposure of only reading one news article. Compared to other variables about behavior al intentions, making a decision about whether or not to invest in a company seems to entail a more complicated process. Additionally, when one is investing in a company, the companys management factors such as how ethical it is or how well organized it is also matte r. Thus, even though subjects who were exposed to a news story about a massive product recall answered more negatively about investing in the company, those exposed to a bribery scandal also checked relatively lower 46

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scores compared to other behavioral intention va riables. This resulted in a lesser statistical difference on the investment measure, so that Hypothesis 2b was not supported. Prior attitude toward TNCs: Hypotheses 3 and 4 stated that prior attitude toward TNCs would affect subjects attitude formation and be havioral intentions. A significant difference was found only when measuring how prosocial the company was. Other dependent variables including the likeability measure, general attitu de, and behavioral intentions did not exhibit a significant difference. These results show that whether host customers have an unfriendly or a friendly attitude generally did not influence their attitude and be havioral intention after reading the news article regarding the TNCs crisis abro ad. However, a statistically significant difference was found in measurement of how prosocial the company was. Ther efore, host customers prior attitude toward TNCs only influenced the companys societal contribution. Implications for Global Public Relations Theory and Practice The results of this study offer implicati ons for extending the re search on CNCS. This study, done with an experimental research method, has strengths and weaknesses. Experiment is known that it has weakness in external validity, which means it is hard to generalize, as it was done with a relatively small sample. However, it can be a powerful communication tool because it works to prove causal relations, which is important in research. The results of this study visibly show that there is a significant causal relations hip between the type of crisis and potential customers attitudinal an d behavioral intentions. Most of the previous resear ch about CNCS (Kim & Moll eda, 2005; Molleda & ConnollyAhern, 2002; Molleda et al., 2005; Molleda & Quinn, 2004; Wang, 2005) was done through a content analysis of news coverage of the issues. However, this study, accomplished with an experimental research method, supports the influence of cross-na tional conflict on host customers with actual empirica l evidence on both attitudinal and behavioral levels. This study 47

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proves that the effect of a crisis involving a TN C is not limited to its home country (i.e., where the TNC has its headquarters). Thus, TNCs should be proactive in transnational crisis management. Even though the concept of re putation adopted by this st udy is a collective construct measure, reputation was measured on an individu al stakeholder level with relationship with potential customers in order to make a simple re search design that could be easily implemented. The results of this study can be a basis for designing more collectiv e construct level with multiple stakeholders such as consumers, investors, and employees. The results of this study show that a hos t countrys poten tial customers form negative attitudes and behavioral intentions even though they may only r ead one news article about the crisis that a TNC faces. In reality, if a TNC has a transnational crisis, there will be more negative news coverage and the effect on host customers will be greater than measured in this experiment. The effect is harder to control once issues re garding CNCS have come out; therefore, TNCs should be especially cautious about the potenti al effects of the CNCS phenomenon. TNCs need to be flexible and dynamic in informational tran sactions and have transn ational crisis defense mechanisms (Wang, 2005). In addition, TNCs have to be prepared with response strategies related to the crisis, as how the company handles the issue may affect the companys reputation. In addition, scenarios of expect ed crises will help TNCs to react effectively and quickly when crises take place. The results of this study show that the type of crisis affects host customers attitudinal and behavioral levels. In this experime nt, as the company was in the automotive industry, the i ssue that affected the quality of the product had a more negative influence. 48

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The finding of this study that the massive product recall issue had a more negative influence on potential customers attitudes a nd behavioral intentions seems due to the involvement of the product that the company produ ced. A characteristic of automotive products is that they can be fatal when not working prop erly, threatening human life. Thus, customers are more sensitive to issues related to product de fects. However, these days, product recalls are becoming more commonplace, and even simple t oys for children may be dangerous if they encounter defects such as lead contamination when in the process of production. Thus, organizations should be aware that everything related to their produc ts or services can be a big issue that can develop into a crisis. The two types of crises adopted in this study belong to different cate gories of crises. The bribery scandal involving the CEO belongs to the category of une thical leadership in intentional crises, and the massive product recall issue be longs to the category of product failure in unintentional crises (Ulmer, Sellnow, & Seeger, 2007). Unethical le adership, which is caused by criminal acts of managers, often becomes a cris is (Millar & Irvine, 1996). It is emphasized that unethical behavior can and often is the ultimate cause of a crisis situation (Ulmer et al., p. 11). When an organizations leadership obviously puts its stakeholders including employees, customers, investors, or the su rrounding community at risk wit hout being honest about that, two unfavorable events are likely to occur. The first is that a breakdown in the system occurs, which often results in a crisis; second, when the public gets to know about une thical behavior that suggests that the organizational lead ership is not honest, the public is not likely to forgive (Ulmer et al., p. 11). Thus, it takes longer to recover from a crisis due to unethical behavior for dishonest leaders than is it for honest leaders (Ulmer et al., 2007). 49

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The massive product recall issue in this e xperiment belongs to the category of unintentional crises that are unforeseeable or unavoidable. When an unintentional crisis hits an unprepared organization, the result of the crisis will be bigger, and the organization will face a more difficult recovery. Thus, although unint entional crises are mostly unpredictable, organizations should prepare by taking steps to reduce their impact in crisis situations. The types of crises that would have a hars h impact depend on each TNCs internal and external factors, such as indus try category, previous history of facing crises, and so on. Thus, preparing scenarios of expected crises should be based on the analysis of each TNCs overall factors. From these findings, this study sugge sts two new propositions for CNCS. P14. The effect of CNCS might be different depending on the type of the crisis, and the effect of a crisis that influences the safety of a product is fatal. P15. Even though previous attitude toward TNCs doe s not influence how people form an attitude and behavioral intentions about a company that faces CNCS, it cannot be ignored completely, as it still impacts measurements of wh ether the company is antisocial. Limitations and Future Research The limitations of this study suggest a number of issues for future research. The first limitation involves the study participants, who were restricted to college students. Although this sample was appropriate for a study on a CNCS, th e results might differ for other subjects. One criticism of using students as respondents is that they are often unfamiliar with the task required (Gaugler & Thorton, 1989). Besides, as this study was done w ith undergraduate students in their early 20s, prior attitude toward TNCs may be di fferent in other age groups such as the middle aged or retired senior generations. Some resear chers have found that attitude toward domestic products generally tends to be more favorable w ith increasing age (Ba nnister & Saunders, 1978; 50

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Schooler, 1971; Tonberg, 1972). These researcher s have assumed that younger people may be more cosmopolitan in their preferences and atti tudes and thus more favorable toward imports (Bannister & Saunders, 1978). In addition, student s from the Southern region of the United States may be different from stude nts in other geographic locations Thus, future research should investigate a wider demographic base to generalize the results across segments. The second limitation of the study is associat ed with the artificia l environment of the experiment. The classroom atmosphere, coupled with viewers short exposure to the news articles, could have affected respondents thinking and led them to pay less attention than they would have in a natural se tting where they would normally read news articles. The third limitation is related to the stimulus materials. To create a simple research design, only a very famous and representative news company was chosen in the stimulus materials. The impact of a CNCS may vary with the news sources where the i ssue is covered. Future studies should involve both a very representative news source and a relatively less famous news source that is unfamiliar to subjects to figure out whet her the impact of a cross-national shift on potential customers depends on the news source or not. Yet another limitation of this study relates to the product category. Automobiles are a relatively high-involvement produc t category, and results could vary with the use of a lowinvolvement product category. Future studies shou ld employ different kinds of industries in various categories to examine whet her the findings of this stu dy can be generalized to other categories. Finally, the method of measuring dependent variables in the study could be improved. Because all the dependent variables in this study were measured right after the news story was shown to the participants, important long-term effects were not analyzed. Lyon and Cameron 51

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52 (2004) studied the long-term effects of nega tive publicity and the in fluence of time delay. Therefore, future research should consider asse ssing participants answer s long after they have finished reading the news article. Evaluating the long-term effects of negative publicity will improve understanding of how long a cross-natio nal conflict shift may influence potential customers.

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APPENDIX A EXPERIMENT STIMULI News Story about a Massive Product Recall March 28, 2008, Friday, Final Edition You will read a news story about a Japanese automaker company here. After reading presented news story, please circle the number that best describes your thoughts or feelings. You may not recognize organizations presented here However, based on the p resented news stor y p lease rate the followin g q uestions Toniwa Forced to Start a Massive Recall BYLINE: By MARTIN FACKLER; Chieko Tsuneoka contributed reporting for this article. SECTION: Section C; Column 6; Business/Financial Desk; LENGTH: 151 words DATELINE: TOKYO, February 28 While Toniwa Motor Corporation still not admi tting its responsibility on a car accident happened last month in Kumamoto, The Minist ry of Land, Infrastructure and Transport of Japan forced Toniwa to recall its vehicles. The police in Kumamoto, a small city in southern Japan, accused Toniwa of possible negligence of their duty for safety. It had been revealed that the vehicle had defects in clutches, brakes and other car parts collectively involved in dozens of accidents that resulted in several injuries and at least one other death. In that acci dent, a young married couple, were killed and their two sons were injured when they were hit by a wheel that came off a large Toniwa S.U.V with a faulty wheel hub. As Toniwa is forced to go on a massive reca ll for more than 10 models, it was reported yesterday the stock price of Toniwa dropped by 24%. Copyright 2008 The New York Times Company http://www.lexisnexis.com.lp.hscl.ufl.edu/us/lnacademic/results/docview/docvie .. 2008-03-28 53

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54 News Story about a Bribery Scandal You will read a news story about a Japanese automaker company here. After reading presented news story, please circle the number that best describes your thoughts or feelings. You may not recognize organizations presented here However, based on the p resented news stor y p lease rate the followin g q uestions March 28, 2008, Friday, Final Edition Toniwa Chairman Is Convicted BYLINE: By MARTIN FACKLER; Chieko Tsuneoka contributed reporting for this article. SECTION: Section C; Column 6; Business/Financial Desk; LENGTH: 151 words DATELINE: TOKYO, March 28 Fujio Nakayama, the chairman of Toniwa Motor Corporation, Japans fifth largest automaker, was convicted yesterday of embezzlement and other charges and sentenced to three years in prison over a slush fund scandal that has weighed on the company. Prosecutors, who have been taking a hard li ne on corruption in Japan, last month sought a six-year jail term, calling Mr. Nakayamas crimes grave. Judge Katsuo Watanabe said the lesser sentence reflected Mr. Nakayamas big contribution to the development of the countrys economy and noted his involvement in charity. Still, Judge Watanabe said Mr. Nakaya ma had committed clearly criminal acts. Mr. Nakayama will appeal, Toniwa Motor Corpor ation said. Three other Toniwa officials facing similar charges were also convict ed, but all were given suspended sentences. Mr. Nakayama was absent from work for more than two months after being jailed following his arrest in November and his hos pitalization for a health exam. He was granted bail in January and returned to work in February. Copyright 2008 The New York Times Company http://www.lexisnexis.com.lp.hscl.ufl.edu/us/l nacademic/results/doc view/docvie...2008-03-28

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APPENDIX B QUESTIONNAIRE Part I Thank you for taking your time to answer the questions in this st udy. I am exploring the influence of cross-national conflict shif t on host customers for my thesis. Your participation and responses are voluntary, a nonymous, and important to the success of this study. Please answer the following questions to the fullest Where necessary, please give a pp roximate res p onses. Please circle the number corresponding to your level of opini on on the statement. Q. How do you feel about transnational co mpanies which have headquarters in foreign countries? (Transnational companies are business enterprise with manufacturing, sales, or service subsidiaries in one or more foreign countries.) 1=strongly disagree / 4=somewhat agree / 7=strongly agree Transnational companies contributes to the development of the U.S. economy 1 2 3 4 5 6 7 Transnational companies are plundering capital in U.S. 1 2 3 4 5 6 7 Transnational companies invest money to stimulate the growth of the economy of U.S. 1 2 3 4 5 6 7 Transnational companies are not necessary for U.S. industry. 1 2 3 4 5 6 7 Transnational companies' influence on U.S. business is negative. 1 2 3 4 5 6 7 Transnational companies' products are excellent. 1 2 3 4 5 6 7 Please go to the next page. 55

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(One of the experiment stimuli goes here) 56

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Part II Please answer following questions based on the news story you just read. 1. How do you feel about the tone of the news article you just read? Very Negative 1 2 3 4 5 6 7 Very Positive 2. Do you think other people will be positively or negatively influenced by this news story? Very Negative 1 2 3 4 5 6 7 Very Positive Considering your overall impressions of Toniwa Motor Corporation: In general, Toniwa Motor Corporation is, 1 Antisocial 1 2 3 4 5 6 7 Prosocial As an overall company, Toniwa Motor Corporation is, 2 Very Unlikeable 1 2 3 4 5 6 7 Very Likeable Your feeling about Toniwa Motor Corporation is 3 Bad 1 2 3 4 5 6 7 Good 4 Unfavorable 1 2 3 4 5 6 7 Favorable 5 Unpleasant 1 2 3 4 5 6 7 Pleasant Based on your overcall impressions of Toniwa Motor Corporation: How likely would you be to purchase To niwa Motor Corporations product? 6 Very Unlikely 1 2 3 4 5 6 7 Very Likely 7 Improbable 1 2 3 4 5 6 7 Probable 8 Impossible 1 2 3 4 5 6 7 Possible 57

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58 If you were given $1000 to invest, how likely wo uld you be to invest in Toniwa Motor Corporation? 9 Very Unlikely 1 2 3 4 5 6 7 Very Likely How likely would you be to recommend Toniwa Motor Corporations product to a friend? 10 Very Unlikely 1 2 3 4 5 6 7 Very Likely How likely would you be to request information about Toniwa Motor Corporations product? 11 Very Unlikely 1 2 3 4 5 6 7 Very Likely Your demographic information: (Only for statistical use) 12. Age : I am currently ______years old. 13. Gender : _____male ______ female 14. Nationality U.S citizen ( ) U.S. permanent resident ( ) International ( ) -The EndTHANK YOU FOR YOUR PARTICIPATION Before submitting this questionnaire to the researcher, please answer all questions presented in this questionnaire Your every answer will c ontribute to the study. Although you are not familiar with the company presented here, feel free to answer questions based on the presented news story here I really appreciate your patience and participation!

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BIOGRAPHICAL SKETCH Hyun Ji Lim was born in South Korea. She graduated from Ewha Womans University in 2006, earning a B.A. in advertising and public relations. After graduation, she studied abroad to continue her graduate study specializing in public relations at University of Florida. She completed her Master of Arts in Mass Communication at University of Florida in 2008 and plans to begin her doctoral study in the United States, public relations in particular, in the 2008 fall semester.