A “Buffer” or “Boomerang?”— The Role of Corporate Reputation in Bad Times

Abstract

Is a favorable prior reputation antibiotics or a hemlock cup in times of organizational crisis? To answer this question, the current study casts light on the contextual cues of crises by applying Brown and Dacin’s (1997) concepts of CA (corporate ability) and CSR (corporate social responsibility) and examines how the cues work in different crisis situations and affect the valence of reputation effects. Drawing on the expectancy violations (EV) theory and the cognitive dissonance perspectives, this study opens the door to reconciling contradicting research findings in literature and provides clues to why and when a good reputation yields buffering or boomerang effects in bad times.