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

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  • Dong-Hong Zhu
  • Ya-Ping Chang

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. Copyright Springer Science+Business Media Dordrecht 2013

Suggested Citation

  • Dong-Hong Zhu & Ya-Ping Chang, 2013. "Negative Publicity Effect of the Business Founder’s Unethical Behavior on Corporate Image: Evidence from China," Journal of Business Ethics, Springer, vol. 117(1), pages 111-121, September.
    • Handle: RePEc:kap:jbuset:v:117:y:2013:i:1:p:111-121
    DOI: 10.1007/s10551-012-1512-2
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