Why Firms Engage in Dialogue on Accusations of Misconduct

While the types of corporate responses to accusations of misconduct are well studied, little is known about when firms engage in dialogue prompted by their accusers. Even though most accusations never make the headlines, most studies have indeed focused on firms' public responses triggered by negative press, and have neither considered more localized dialogue with accusers nor the circumstances that promote firms' acceptance of such interactions. Yet, understanding this is important to reveal when firms might influence whether accusations become amplified by accusers and how responsibility is eventually attributed. This study examines why firms engage in dialogue on accusations of social and environmental misconduct when asked by accusers, despite the potential complications of sharing information. We argue that they do so when they find dialogue worthwhile for preempting the potential negative damage that could should accusers amplify the accusations. Adopting an abductive and configurational approach, we consider that firms could be sensitive to whether accusations are sufficiently threatening through vilifying cues and/or sufficiently persuasive through credibility cues. Using fsQCA, we analyze 40 accusations of social and environmental misconduct filed against European firms between 2000 and 2018 under a dialogue-based, voluntary complaint mechanism to reveal the combinations of cues that prompt firms' engagement in dialogue on accusations of misconduct. The results show five combinations of cues, with all but one combining threat- and persuasion-based cues, revealing diverse motivations. We further examine these results using case-level qualitative evidence to identify plausible explanations underlying each configuration. We contribute to the literature on corporate misconduct and firm-stakeholder dialogue by informing on why firms engage in dialogue when prompted by accusers.