Identity matters

Abstract

Purpose The purpose of this paper is to conceptually develop and empirically test a model according to which a crisis leads to a greater reputational damage when it is highly relevant to the firm’s organizational identity or highly relevant to stakeholders’ identity. Design/methodology/approach A total of 299 participants based in the USA were recruited online using the Amazon Mechanical Turk platform. The study uses a 2 (relevance of crisis to organizational identity: low vs high) × 2 (relevance of crisis to stakeholders’ identity: low vs high) between-subjects experimental design. Findings The results confirm the hypotheses that an organizational crisis leads to greater reputational damage when it is highly relevant to the firm’s organizational identity or when it is highly relevant to stakeholders’ identity. No significant interaction between the two variables was found. Research limitations/implications Future research could focus on further elaborating on how the two identity-related variables tested in this paper interact with other variables that have already been studied for moderating the effects of crises on reputation damage. Practical implications The paper reaffirms the deep interconnection between identity, stakeholders and reputation. Concretely, the results of the study suggest an informative way of mapping the degree to which risks or issues could potentially damage organizational reputation. Originality/value The paper contributes to the literature by providing a more situational understanding of how the same exact crisis can damage the reputation of organizations differently. By doing so, the paper opens several new avenues for future research.