Mitigating Product Harm Crises and Making Markets Sustainable: How does National Culture Matter?

Product harm crisis has become a serious issue in the business world today irrespective of the crisis mitigating strategies adopted to remedy the harm. The purpose of the study is to determine whether national culture shapes consumer reactions to crisis response strategies as a result of variation of consumers’ perceptions the affected firm’s moral responsibility. The study considers a comparison of 303 marketing-based Chinese and Sri Lankan students. Findings of independent sample t tests and Analysis of variance (ANOVA) suggested that consumers’ moral perceptions vary significantly between China and Sri Lanka in response to crisis response strategies revealing a new insight in the crisis mitigating literature. A wounded company has to launch a super effort response in Sri Lanka whereas the voluntary recall response in China is sufficient in a crisis in order to maintain moral reputation. Moreover, the study reveals that implementation of an inappropriate strategy leads to significant financial and moral reputational loss to a company. Therefore, the study recommends companies choosing culture-specific response strategies in order to protect moral reputational status and to make the market sustainable.