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ISSN : 2233-4165(Print)
ISSN : 2233-5382(Online)
Journal of Industrial Distribution & Business Vol.11 No.4 pp.47-56
DOI : http://dx.doi.org/10.13106/jidb.2020.vol11.no4.47

The Influence of CEO's Scandal on Consumers’ Product Purchase

Ji-Eun CHOI*
*First Author’s Affiliation: Associate Professor, Department of Business Administration, Kangwon National University, Korea, Email: jieun@kangwon.ac.kr

© Copyright: Korean Distribution Science Association (KODISA)
This is an Open Access article distributed under the terms of the Creative Commons Attribution Non- Commercial License (https://creativecommons.org/licenses/by-nc/4.0/) which permits unrestricted noncommercial use, distribution, and reproduction in any medium, provided the original work is properly cited.
March 03, 2020 March 25 2020 April 05, 2020

Abstract

Purpose: This study aims to explore how consumers respond to the immoral actions of a CEO. More specifically, this research focuses on the moral reasoning processes used by consumers in order to maintain support for the CEO despite the immoral action. In addition, this research suggests that support for the CEO would improve product purchase intention. Research design, data, and methodology: To test the hypotheses presented, an online research company was hired and online survey was conducted with adult participants. Online research company sent an email to the potential subjects asking their participation in an online survey. Subjects were able to participate in the online survey by clicking a link to the survey. When the participants clicked the link, they were instructed to read a fictitious newspaper article on a CEO’s immoral action. And then, they were asked to answer several questions online. Responses were obtained from 336 adults participants and data were analyzed using SPSS Hayes Macro for a moderation effect and AMOS for a structural equation model. Result: Moral reasoning processes were divided into moral decoupling and moral rationalization and analyzed to determine their influence on product purchase. Also in this study, we suggest the public self-consciousness of consumers as an antecedent of moral reasoning processes, and argue that consumers with high public selfconsciousness are more likely to engage in moral decoupling than moral rationalization. Conclusions: Our results showed that moral decoupling and moral rationalization improved the consumer’s perception of corporate ethicality, which increased product purchase intention. In addition, consumers with high public self-consciousness were more likely to engage in moral decoupling than in moral rationalization. In addition, this research suggested that severity of the scandal would moderate the impact of public self-consciousness on moral decoupling. However, this hypothesis was not supported statistically since most participants perceived the scandal to be a highly severe incident, that may lead to an insignificant interaction effect between severity of the scandal and public self-consciousness. This research expands the scope of available research on corporate ethics and consumer responses to negative information involving celebrities and provides practical implications for corporate crisis management.

JEL Classification Code: M10, M13, M30, M31

초록


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