Reputation Management in the Automotive Industry: The Impact of Scandals on Customer Perceptions and Adequate Corporate Response Strategies by Consideration of Cultural and National Differences

Alexandra Klamka & Jasmin Horschig

Student thesis: Master thesis

Abstract

Due to a current series of reputation-damaging incidents within the automotive industry, questions arise how corporate crisis affect customer perceptions and brand reputation, as well as how affected organizations should respond to such an event. Previous research already investigated the theoretical construct of corporate reputation and possible corporate crisis response strategies intensively. However, cultural and national influencing factors on customers’ brand evaluation and preferences for organizational behavior in a corporate crisis context were so far little considered and thus represent a research gap. Besides that, little theoretical and practical advice exists for companies on how and why to adapt their crisis response strategies to cultural and national environments. Therefore, the purpose of this paper is to close the existing research gap by investigating cultural differences in the reactions of customers’ corporate scandals and adequate corporate responses. To do so, a detailed look from a theoretical angle is taken at automotive industry specific singularities, as well as customer perception theory, determinants of reputation formation, and crisis management theory. In order to contribute to existing reputational theory, the reviewed literature is further linked to popular cultural theories. In order to tackle the research question methodologically, a survey with a total of 170 respondents from Germany, Asia and the USA was conducted with the aim to measure the effect of the Toyota and Volkswagen corporate scandals and related cultural differences. As a measurement instrument, Schwaiger’s reputational model was used to approach the latent construct of corporate reputation through more observable reputational subdimensions. Overall, in the present study, several culture-specific and brand-specific differences in customer perceptions and brand evaluation were identified. Furthermore, both socio-cultural and organizational culture were found to be important cornerstones for determining corporate response behavior and thus also crisis outcomes. It is thus recommended that crisis-hit companies act in a culturally and contextually adaptive way to reputation-damaging events in order to minimize corporate crisis impacts

EducationsMSc in International Business, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2018
Number of pages164