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Negative Publicity Effect of the Business Founder’s Unethical Behavior on Corporate Image: Evidence from China

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Abstract

The unethical behavior of a business founder often leads to negative publicity which substantially affects positive corporate image. The amount of negative publicity relating to business founders’ unethical behavior is on the rise in the age of online social media in China. Based on the stimulus–response theory and balance theory, this paper developed a theoretical model to examine how negative publicity about a business founder’s unethical behavior affects corporate image. The proposed model was tested by the partial least squares technique. Results show that perceived severity, publicity intensity and recovery performance are predictors of corporate image: perceived severity has a negative impact on positive corporate image; publicity intensity and recovery performance have positive impacts on positive corporate image; and founder image mediates the relationships between the three predictors and corporate image. Moreover, initial consumer impression of business founders has a positive impact on positive corporate image.

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Acknowledgments

This work was supported by National Natural Science Foundation of China (71072032) and Ministry of Education, Humanities and Social Sciences project (12YJC810035).

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  1. School of Management, Huazhong University of Science & Technology, Room 642, 1037 Luoyu Road, Wuhan, China

    Dong-Hong Zhu

  2. School of Management, Huazhong University of Science & Technology, Room 615, 1037 Luoyu Road, Wuhan, China

    Ya-Ping Chang

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  1. Dong-Hong Zhu
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Correspondence to Ya-Ping Chang.

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Zhu, DH., Chang, YP. Negative Publicity Effect of the Business Founder’s Unethical Behavior on Corporate Image: Evidence from China. J Bus Ethics 117, 111–121 (2013). https://doi.org/10.1007/s10551-012-1512-2

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