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Journal of Business Ethics
Published in: Journal of Business Ethics 1/2022

03-08-2020 | Original Paper

Trust Erosion During Industry-Wide Crises: The Central Role of Consumer Legitimacy Judgement

Authors: Shijiao Chen, Jing A. Zhang, Hongzhi Gao, Zhilin Yang, Damien Mather

Published in: Journal of Business Ethics | Issue 1/2022

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Abstract

Widespread unethical corporate misconduct in an industry triggers industry-wide crises. This research investigates how industry misconduct affects consumers’ trust in the industry, by incorporating insights from a micro-level psychological aspect of institutions. The conceptual framework proposes that consumer legitimacy judgement lies at the core of industry trust, following an industry-wide crisis. The results demonstrate that perception of normalisation of misconduct (PNM) affects industry trust through consumer legitimacy judgement (CLJ) (Study 1). Moreover, the PNM-CLJ-industry trust relationship is stronger during industry-wide crises compared with crises that involve only one firm (Study 2), and this relationship is not dependent on the frequency of crises (Study 3). This research contributes to the knowledge of product-harm crisis by deepening understanding of the trust erosion mechanism during industry-wide crises, with a focus on legitimacy judgement. The findings have implications for prevention of industry-wide crises and for boosting ethically desirable business activities.
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Metadata
Title
Trust Erosion During Industry-Wide Crises: The Central Role of Consumer Legitimacy Judgement
Authors
Shijiao Chen
Jing A. Zhang
Hongzhi Gao
Zhilin Yang
Damien Mather
Publication date
03-08-2020
Publisher
Springer Netherlands
Published in
Journal of Business Ethics / Issue 1/2022
Print ISSN: 0167-4544
Electronic ISSN: 1573-0697
DOI
https://doi.org/10.1007/s10551-020-04588-0

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