How Do Consumers React to Company Moral Transgressions? The Role of Power Distance Belief and Empathy for Victims

Abstract

Abstract This research proposes that consumers vary in their response to company moral transgressions as a function of power distance belief (PDB), which is the extent that consumers accept inequality (a prominent moral principle). Specifically, consumers with lower PDB tend to feel more empathy for victims, which in turn heightens harm perceptions and negative moral emotions, leading to less favorable reactions toward the transgressing company. A series of nine studies and four supplementary experiments provides converging evidence for the PDB effect and underlying empathy-based process, while identifying victim salience and company crisis response strategy as theoretically and pragmatically relevant moderators. Specifically, the PDB effect emerges when victim salience is high (evoking greater empathy among lower-PDB consumers) but is attenuated when victim salience is low (and empathy is not evoked). Likewise, the PDB effect on company evaluations can be mitigated when the transgressing company offers both an apology and remedy, which together signal the company’s empathy for victims and remedy for harm that are salient to low-PDB consumers. Together, these findings shed light on how consumer reactions to company moral transgressions vary by culture, transgression characteristics, and company response strategies, providing guidance to companies in crisis.