Skip to main content
SpringerLink
Log in

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

  • Original Paper
  • Published:
Journal of Business Ethics Aims and scope Submit manuscript

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.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1
Fig. 2

Similar content being viewed by others

References

  • ABC News (2018). Strawberry needle contamination: Accused woman motivated by spite, court hears. Retrieved May 23, 2020, from https://www.abc.net.au/news/2018-11-12/strawberry-needle-contamination-woman-to-face-court/10486770.

  • Alexiou, K., & Wiggins, J. (2019). Measuring individual legitimacy perceptions: Scale development and validation. Strategic Organization, 17(4), 470–496.

    Google Scholar 

  • Angulo, A. M., & Gil, J. M. (2007). Risk perception and consumer willingness to pay for certified beef in Spain. Food Quality and Preference, 18(8), 1106–1117.

    Google Scholar 

  • Ashforth, B. E., & Anand, V. (2003). The normalization of corruption in organizations. Research in Organizational Behavior, 25, 1–52.

    Google Scholar 

  • Barnett, M. L. (2014). Why stakeholders ignore firm misconduct: A cognitive view. Journal of Management, 40(3), 676–702.

    Google Scholar 

  • Bauer, F., & Matzler, K. (2014). Antecedents of M&A success: The role of strategic complementarity, cultural fit, and degree and speed of integration. Strategic Management Journal, 35(2), 269–291.

    Google Scholar 

  • Berrone, P., Fosfuri, A., & Gelabert, L. (2017). Does greenwashing pay off? Understanding the relationship between environmental actions and environmental legitimacy. Journal of Business Ethics, 144(2), 363–379.

    Google Scholar 

  • Bitektine, A. (2011). Toward a theory of social judgments of organizations: The case of legitimacy, reputation, and status. Academy of Management Review, 36(1), 151–179.

    Google Scholar 

  • Bitektine, A., & Haack, P. (2015). The “macro” and the “micro” of legitimacy: Toward a multilevel theory of the legitimacy process. Academy of Management Review, 40(1), 49–75.

    Google Scholar 

  • Boulding, W., & Kirmani, A. (1993). A consumer-side experimental examination of signaling theory: Do consumers perceive warranties as signals of quality? Journal of Consumer Research, 20(1), 111–123.

    Google Scholar 

  • Campbell, J. L. (2007). Why would corporations behave in socially responsible ways? An institutional theory of corporate social responsibility. Academy of Management Review, 32(3), 946–967.

    Google Scholar 

  • Chen, J. C., & Roberts, R. W. (2010). Toward a more coherent understanding of the organization–society relationship: A theoretical consideration for social and environmental accounting research. Journal of Business Ethics, 97(4), 651–665.

    Google Scholar 

  • Chen, S., Wright, M., Gao, H., Liu, H., & Mather, D. (2020). The effects of brand origin and country-of-manufacture on consumers’ institutional perceptions and purchase decision-making. International Marketing Review, forthcoming.

  • Chin, W. W. (1998). The partial least squares approach to structural equation modeling. Modern Methods for Business Research, 295(2), 295–336.

    Google Scholar 

  • Choi, S., & McNamara, G. (2018). Repeating a familiar pattern in a new way: The effect of exploitation and exploration on knowledge leverage behaviors in technology acquisitions. Strategic Management Journal, 39(2), 356–378.

    Google Scholar 

  • Chung, J. Y., Berger, B. K., & DeCoster, J. (2016). Developing measurement scales of organizational and issue legitimacy: A case of direct-to-consumer advertising in the pharmaceutical industry. Journal of Business Ethics, 137(2), 405–413.

    Google Scholar 

  • Clauzel, A., Delacour, H., & Liarte, S. (2019). When cuisine becomes less haute: The impact of expert ratings on consumers' legitimacy judgments. Journal of Business Research, 105, 395–404.

    Google Scholar 

  • Cleeren, K., Dekimpe, M. G., & Helsen, K. (2008). Weathering product-harm crises. Journal of the Academy of Marketing Science, 36(2), 262–270.

    Google Scholar 

  • Cleeren, K., Dekimpe, M. G., & van Heerde, H. J. (2017). Marketing research on product-harm crises: A review, managerial implications, and an agenda for future research. Journal of the Academy of Marketing Science, 45(5), 593–615.

    Google Scholar 

  • Cleeren, K., Van Heerde, H. J., & Dekimpe, M. G. (2013). Rising from the ashes: How brands and categories can overcome product-harm crises. Journal of Marketing, 77(2), 58–77.

    Google Scholar 

  • Comyns, B., & Franklin-Johnson, E. (2018). Corporate reputation and collective crises: A theoretical development using the case of Rana Plaza. Journal of Business Ethics, 150(1), 159–183.

    Google Scholar 

  • Coombs, W. T. (2007). Attribution theory as a guide for post-crisis communication research. Public Relations Review, 33(2), 135–139.

    Google Scholar 

  • Davies, G., & Olmedo-Cifuentes, I. (2016). Corporate misconduct and the loss of trust. European Journal of Marketing, 50(7/8), 1426–1447.

    Google Scholar 

  • Dawar, N., & Pillutla, M. M. (2000). Impact of product-harm crises on brand equity: The moderating role of consumer expectations. Journal of Marketing Research, 37(2), 215–226.

    Google Scholar 

  • Diamantopoulos, A., Sarstedt, M., Fuchs, C., Wilczynski, P., & Kaiser, S. (2012). Guidelines for choosing between multi-item and single-item scales for construct measurement: A predictive validity perspective. Journal of the Academy of Marketing Science, 40(3), 434–449.

    Google Scholar 

  • Diamantopoulos, A., & Winklhofer, H. M. (2001). Index construction with formative indicators: An alternative to scale development. Journal of Marketing Research, 38(2), 269–277.

    Google Scholar 

  • DiMaggio, P., & Powell, W. (1983). The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields. American Sociological Review, 48(2), 147–160.

    Google Scholar 

  • Donaldson, T., & Preston, L. E. (1995). The stakeholder theory of the corporation: Concepts, evidence, and implications. Academy of Management Review, 20(1), 65–91.

    Google Scholar 

  • Dong, W., Han, H., Ke, Y., & Chan, K. C. (2018). Social trust and corporate misconduct: Evidence from China. Journal of Business Ethics, 151(2), 539–562.

    Google Scholar 

  • Douglas, S. P., & Craig, C. S. (2007). Collaborative and iterative translation: An alternative approach to back translation. Journal of International Marketing, 15(1), 30–43.

    Google Scholar 

  • Earle, J. S., Spicer, A., & Peter, K. S. (2010). The normalization of deviant organizational practices: Wage arrears in Russia, 1991–98. Academy of Management Journal, 53(2), 218–237.

    Google Scholar 

  • Eden, D. (2002). From the editors: Replication, meta-analysis, scientific progress, and AMJ's publication policy. Academy of Management Journal, 45(5), 841–846.

    Google Scholar 

  • Finch, D., Deephouse, D., & Varella, P. (2015). Examining an Individual’s Legitimacy Judgment Using the Value-Attitude System: The Role of Environmental and Economic Values and Source Credibility. Journal of Business Ethics, 127(2), 265–281.

    Google Scholar 

  • Fisher, G., Kotha, S., & Lahiri, A. (2016). Changing with the times: An integrated view of identity, legitimacy, and new venture life cycles. Academy of Management Review, 41(3), 383–409.

    Google Scholar 

  • Flanagan, J. C. (1954). The critical incident technique. Psychological Bulletin, 51(4), 327–358.

    Google Scholar 

  • Folkes, V. S., & Kotsos, B. (1986). Buyers' and sellers' explanations for product failure: who done it? Journal of Marketing, 50(2), 74–80.

    Google Scholar 

  • Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(1), 39–50.

    Google Scholar 

  • Frandsen, F., & Johansen, W. (2016). Organizational crisis communication: A multivocal approach. London: Sage.

    Google Scholar 

  • Fukuyama, F. (2011). The origins of political order: From prehuman times to the French Revolution. New York: Farrar, Straus and Giroux.

    Google Scholar 

  • Gao, H., & Knight, J. G. (2007). Pioneering advantage and product-country image: Evidence from an exploratory study in China. Journal of Marketing Management, 23(3–4), 367–385.

    Google Scholar 

  • Gao, H., Knight, J. G., Zhang, H., Mather, D., & Tan, L. P. (2012). Consumer scapegoating during a systemic product-harm crisis. Journal of Marketing Management, 28(11–12), 1270–1290.

    Google Scholar 

  • Gao, H., Zhang, H., Zhang, X., & Knight, J. G. (2015). Spillover of distrust from domestic to imported brands in a crisis-sensitized market. Journal of International Marketing, 23(1), 91–112.

    Google Scholar 

  • Grayson, K., Johnson, D., & Chen, D.-F. R. (2008). Is firm trust essential in a trusted environment? How trust in the business context influences customers. Journal of Marketing Research, 45(2), 241–256.

    Google Scholar 

  • Hair, J. F., Black, W. C., Babin, B. J., Anderson, R. E., & Tatham, R. L. (2006). Multivariate data analysis. Uppersaddle River, NJ: Pearson Prentice Hall.

    Google Scholar 

  • Hair, J. F., Hult, G. T. M., Ringle, C., & Sarstedt, M. (2017). A primer on partial least squares structural equation modeling (PLS-SEM) (2nd ed.). Thousand Oaks: Sage.

    Google Scholar 

  • Hair, J. F., Sarstedt, M., Ringle, C. M., & Mena, J. A. (2012). An assessment of the use of partial least squares structural equation modeling in marketing research. Journal of the Academy of Marketing Science, 40(3), 414–433.

    Google Scholar 

  • Han, C. M. (1989). Country image: Halo or summary construct? Journal of Marketing Research, 26(2), 222–229.

    Google Scholar 

  • He, Y., Zhang, J., Zhou, Y., & Yang, Z. (2019). "Monkey see, monkey do?": The effect of consutrual level on consumers' reactions to others' unethical behavior. Journal of Business Ethics, 156, 455–472.

    Google Scholar 

  • Heckman, J. J., & Robb, R., Jr. (1985). Alternative methods for evaluating the impact of interventions: An overview. Journal of Econometrics, 30(1–2), 239–267.

    Google Scholar 

  • Henseler, J., Ringle, C. M., & Sarstedt, M. (2015). A new criterion for assessing discriminant validity in variance-based structural equation modeling. Journal of the Academy of Marketing Science, 43(1), 115–135.

    Google Scholar 

  • Henseler, J., Ringle, C. M., & Sinkovics, R. R. (2009). The use of partial least squares path modeling in international marketing. In New challenges to international marketing (pp. 277–319). Binley: Emerald Group Publishing Limited.

  • Hinkin, T. R. (1998). A brief tutorial on the development of measures for use in survey questionnaires. Organizational Research Methods, 1(1), 104–121.

    Google Scholar 

  • Hoefer, R. L., & Green, S. E. (2016). A rhetorical model of institutional decision making: The role of rhetoric in the formation and change of legitimacy judgments. Academy of Management Review, 41(1), 130–150.

    Google Scholar 

  • Hsiao, C.-H., Shen, G. C., & Chao, P.-J. (2015). How does brand misconduct affect the brand–customer relationship? Journal of Business Research, 68(4), 862–866.

    Google Scholar 

  • Hu, M., Qiu, P., Wan, F., & Stillman, T. (2018). Love or hate, depends on who's saying it: How legitimacy of brand rejection alters brand preferences. Journal of Business Research, 90, 164–170.

    Google Scholar 

  • Huber, F., Vogel, J., & Meyer, F. (2009). When brands get branded. Marketing Theory, 9(1), 131–136.

    Google Scholar 

  • Jia, M., & Zhang, Z. (2016). What influences the duration of negative impacts from organizational deviance on other innocent firms? Journal of Business Research, 69(7), 2517–2530.

    Google Scholar 

  • Johar, G. V., Birk, M. M., & Einwiller, S. A. (2010). How to save your brand in the face of crisis. MIT Sloan Management Review, 51(4), 57–64.

    Google Scholar 

  • Kates, S. M. (2004). The dynamics of brand legitimacy: an interpretive study in the gay men's community. Journal of Consumer Research, 31(2), 455–464.

    Google Scholar 

  • Khamitov, M., Grégoire, Y., & Suri, A. (2019). A systematic review of brand transgression, service failure recovery and product-harm crisis: Integration and guiding insights. Journal of the Academy of Marketing Science. https://doi.org/10.1007/s11747-019-00679-1.

    Article  Google Scholar 

  • Kjærnes, U., Harvey, M., & Warde, A. (2007). Trust in food: A comparative and institutional analysis. New York: Palgrave Macmillan.

    Google Scholar 

  • Klein, J., & Dawar, N. (2004). Corporate social responsibility and consumers' attributions and brand evaluations in a product–harm crisis. International Journal of Research in Marketing, 21(3), 203–217.

    Google Scholar 

  • Knight, J. G., Gao, H., Garrett, T., & Deans, K. (2008). Quest for social safety in imported foods in China: Gatekeeper perceptions. Appetite, 50(1), 146–157.

    Google Scholar 

  • Knight, J. G., Holdsworth, D. K., & Mather, D. W. (2007). Country-of-origin and choice of food imports: An in-depth study of European distribution channel gatekeepers. Journal of International Business Studies, 38(1), 107–125.

    Google Scholar 

  • Kock, N. (2015). Common method bias in PLS-SEM: A full collinearity assessment approach. International Journal of e-Collaboration (IJeC), 11(4), 1–10.

    Google Scholar 

  • Lee, Y.-J., Yoon, H. J., & O'Donnell, N. H. (2018). The effects of information cues on perceived legitimacy of companies that promote corporate social responsibility initiatives on social networking sites. Journal of Business Research, 83, 202–214.

    Google Scholar 

  • Lei, J., Dawar, N., & Gürhan-Canli, Z. (2012). Base-rate information in consumer attributions of product-harm crises. Journal of Marketing Research, 49(3), 336–348.

    Google Scholar 

  • Li, J., He, H., Liu, H., & Su, C. (2017). Consumer responses to corporate environmental actions in China: An environmental legitimacy perspective. Journal of Business Ethics, 143(3), 589–602.

    Google Scholar 

  • Li, J., & Ng, C. K. (2013). The normalization of deviant organizational practices: The non-performing loans problem in China. Journal of Business Ethics, 114(4), 643–653.

    Google Scholar 

  • Liang, H., Saraf, N., Hu, Q., & Xue, Y. (2007). Assimilation of enterprise systems: The effect of institutional pressures and the mediating role of top management. MIS Quarterly, 1, 59–87.

    Google Scholar 

  • Lohmöller, J.-B. (1989). Predictive vs. structural modeling: PLS vs. ML. In Latent variable path modeling with partial least squares (pp. 199–226). Berlin: Springer.

  • MacKenzie, S. B., Podsakoff, P. M., & Jarvis, C. B. (2005). The problem of measurement model misspecification in behavioral and organizational research and some recommended solutions. Journal of Applied Psychology, 90(4), 710–730.

    Google Scholar 

  • Nunnally, J. (1978). Psychometric methods. New York: McGraw-Hill.

    Google Scholar 

  • Panwar, R., Paul, K., Nybakk, E., Hansen, E., & Thompson, D. (2014). The legitimacy of CSR actions of publicly traded companies versus family-owned companies. Journal of Business Ethics, 125(3), 481–496.

    Google Scholar 

  • Petty, R. E., & Cacioppo, J. T. (1986a). Communication and persuasion: Central and peripheral routes to attitude change. New York: Springer.

    Google Scholar 

  • Petty, R. E., & Cacioppo, J. T. (1986b). The elaboration likelihood model of persuasion. New York: Springer.

    Google Scholar 

  • Podsakoff, P. M., MacKenzie, S. B., Lee, J.-Y., & Podsakoff, N. P. (2003). Common method biases in behavioral research: A critical review of the literature and recommended remedies. Journal of Applied Psychology, 88(5), 879–903.

    Google Scholar 

  • Pouta, E., Heikkilä, J., Forsman-Hugg, S., Isoniemi, M., & Mäkelä, J. (2010). Consumer choice of broiler meat: The effects of country of origin and production methods. Food Quality and Preference, 21(5), 539–546.

    Google Scholar 

  • Qiao, G., Guo, T., & Klein, K. (2010). Melamine in Chinese milk products and consumer confidence. Appetite, 55(2), 190–195.

    Google Scholar 

  • Qiao, G., Guo, T., & Klein, K. (2012). Melamine and other food safety and health scares in China: Comparing households with and without young children. Food Control, 26(2), 378–386.

    Google Scholar 

  • Reuters (2017). Brazil suspends more meat plants, EU says trust must be restored. Retrieved May 29, 2017 from https://www.reuters.com/article/us-brazil-corruption-food-idUSKBN16Y2FN.

  • Rodgers, W., Söderbom, A., & Guiral, A. (2014). Corporate social responsibility enhanced control systems reducing the likelihood of fraud. Journal of Business Ethics, 131(4), 871–882.

    Google Scholar 

  • Roehm, M. L., & Tybout, A. M. (2006). When will a brand scandal spill over, and how should competitors respond? Journal of Marketing Research, 43(3), 366–373.

    Google Scholar 

  • Sarstedt, M., Henseler, J., & Ringle, C. M. (2011). Multigroup analysis in partial least squares (PLS) path modeling: Alternative methods and empirical results. Measurement and research methods in international marketing (pp. 195–218). Emerald Group Publishing Limited: Bingley.

    Google Scholar 

  • Schrempf-Stirling, J., Palazzo, G., & Phillips, R. A. (2016). Historic corporate social responsibility. Academy of Management Review, 41(4), 700–719.

    Google Scholar 

  • Scott, W. R. (2013). Institutions and organizations: Ideas, interests, and identities. Thousand Oak: Sage Publications.

    Google Scholar 

  • Simon, H. A. (1974). How big is a chunk? By combining data from several experiments, a basic human memory unit can be identified and measured. Science, 183(4124), 482–488.

    Google Scholar 

  • Singh, J. J., Iglesias, O., & Batista-Foguet, J. M. (2012). Does having an ethical brand matter? The influence of consumer perceived ethicality on trust, affect and loyalty. Journal of Business Ethics, 111(4), 541–549.

    Google Scholar 

  • Sirdeshmukh, D., Singh, J., & Sabol, B. (2002). Consumer trust, value, and loyalty in relational exchanges. Journal of Marketing, 66(1), 15–37.

    Google Scholar 

  • Slimane, K. B., Chaney, D., Humphreys, A., & Leca, B. (2019). Bringing institutional theory to marketing: Taking stock and future research directions. Journal of Business Research, 105, 389–394.

    Google Scholar 

  • Steenkamp, J.-B. E., & Geyskens, I. (2006). How country characteristics affect the perceived value of web sites. Journal of Marketing, 70(3), 136–150.

    Google Scholar 

  • Suchman, M. C. (1995). Managing legitimacy: Strategic and institutional approaches. Academy of Management Review, 20(3), 571–610.

    Google Scholar 

  • Suddaby, R., Bitektine, A., & Haack, P. (2017). Legitimacy. Academy of Management Annals, 11(1), 451–478.

    Google Scholar 

  • Tangpong, C. (2011). Content analytic approach to measuring constructs in operations and supply chain management. Journal of Operations Management, 29(6), 627–638.

    Google Scholar 

  • Tost, L. P. (2011). An integrative model of legitimacy judgments. Academy of Management Review, 36(4), 686–710.

    Google Scholar 

  • Tversky, A., & Kahneman, D. (1975). Judgment under uncertainty: Heuristics and biases. Utility, probability, and human decision making (pp. 141–162). New York: Springer.

    Google Scholar 

  • Van Quaquebeke, N., Becker, J. U., Goretzki, N., & Barrot, C. (2019). Perceived ethical leadership affects customer pruchasing intentions beyond ethical marketing in advertising due to moral identify self-congrueence concerns. Journal of Business Ethics, 156, 357–376.

    Google Scholar 

  • Voorhees, C. M., Brady, M. K., Calantone, R., & Ramirez, E. (2016). Discriminant validity testing in marketing: an analysis, causes for concern, and proposed remedies. Journal of the Academy of Marketing Science, 44(1), 119–134.

    Google Scholar 

  • Weiner, B. (2000). Attributional thoughts about consumer behavior. Journal of Consumer Research, 27(3), 382–387.

    Google Scholar 

  • Yang, Z., Su, C., & Fam, K.-S. (2012). Dealing with institutional distances in international marketing channels: Governance strategies that engender legitimacy and efficiency. Journal of Marketing, 76(3), 41–55.

    Google Scholar 

Download references

Funding

The authors gratefully acknowledge grants from Research Grant Council of Hong Kong SAR (CityU 11502218), and National Natural Science Foundation of China (No. 71672164), for financial support.

Author information

Authors and Affiliations

  1. Department of Marketing, Macquarie University, 3 Management Drive, Sydney, NSW, 2109, Australia

    Shijiao Chen

  2. Department of Management, University of Otago, 60 Clyde Street, Dunedin, 9016, New Zealand

    Jing A. Zhang

  3. School of Marketing and International Business, Victoria University of Wellington, 23 Lambton Quay, Wellington, 6011, New Zealand

    Hongzhi Gao

  4. Department of Marketing, City University of Hong Kong, Tat Chee Ave, Kowloon, Hong Kong

    Zhilin Yang

  5. Department of Marketing, University of Otago, 60 Clyde Street, Dunedin, 9016, New Zealand

    Damien Mather

Authors
  1. Shijiao Chen
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Jing A. Zhang
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Hongzhi Gao
    View author publications

    You can also search for this author in PubMed Google Scholar

  4. Zhilin Yang
    View author publications

    You can also search for this author in PubMed Google Scholar

  5. Damien Mather
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Zhilin Yang.

Ethics declarations

Conflict of interest

The authors declare that they have no conflict of interest.

Ethical Approval

All procedures performed in studies involving human participants were in accordance with the ethical standards of the institutional and/or national research committee and with the 1964 Helsinki declaration and its later amendments or comparable ethical standards.

Informed Consent

Informed consent was obtained from all individual participants included in the study.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Appendices

Appendix 1: Survey Scenarios

  1. 1.

    Scenario description in Study 1

    According to a reliable media report on October 26, 2016, many Chinese dairy firms were found to have food safety management problems. The reported dairy firms included Company Y (in order to avoid legal disputes, we use “Y” to replace the real brand name in our research). Y has relatively high brand visibility in China. The reporters conducted an in-depth investigation and found that Company Y did not conduct some food safety tests required by the state, and there were cases where the products were shipped directly without passing relevant tests. These tests assess levels of nitrates, selenium and other substances. If people consume food products with an excess amount of the substances specified by the state, they may have negative physiological reactions such as dizziness, vomiting, and so on. Severe cases may cause acute poisoning or even be life-threatening

    In addition to Company Y, the reporters found that many other Chinese dairy firms have similar food safety management issues

    At present, the milk produced by the aforementioned companies (including Company Y) has been sold in your provincial region

  2. 2.

    Scenario descriptions in Study 2

    1. (A)

      Scenario description for an industry-wide crisis (same as Study 1)

      According to a reliable media report on October 26, 2016, many Chinese dairy firms were found to have food safety management problems. The reported dairy firms included Company Y (in order to avoid legal disputes, we use “Y” to replace the real brand name in our research). Y has relatively high brand visibility in China. The reporters conducted an in-depth investigation and found that Company Y did not conduct some food safety tests required by the state, and there were cases where the products were shipped directly without passing relevant tests. These tests assess levels of nitrates, selenium and other substances. If people consume food products with an excess amount of the substances specified by the state, they may have negative physiological reactions such as dizziness, vomiting, and so on. Severe cases may cause acute poisoning or even be life-threatening

      In addition to Company Y, the reporters found that many other Chinese dairy firms have similar food safety management issues

      At present, the milk produced by the aforementioned companies (including Company Y) has been sold in your provincial region

    2. (B)

      Scenario description for a non-industry-wide crisis

      According to a reliable media report on October 26, 2016, a Chinese dairy firm was found to have food safety management problems. The reported dairy firm is Company Y (in order to avoid legal disputes, we use “Y” to replace the real brand name in our research). Y has relatively high brand visibility in China. The reporters conducted an in-depth investigation and found that Company Y did not conduct some food safety tests required by the state, and there were cases where the products were shipped directly without passing relevant tests. These tests assess levels of nitrates, selenium and other substances. If people consume food products with an excess amount of the substances specified by the state, they may have negative physiological reactions such as dizziness, vomiting, and so on. Severe cases may cause acute poisoning or even be life-threatening

      At present, the milk produced by Company Y has been sold in your provincial region

  3. 3.

    Scenario descriptions in Study 3

    1. (A)

      Scenario description for an industry with a high level of crisis frequency (the Chinese dairy industry). This description is the same as Study 1 and Study 2 (A)

      According to a reliable media report on October 26, 2016, many Chinese dairy firms were found to have food safety management problems. The reported dairy firms included Company Y (in order to avoid legal disputes, we use “Y” to replace the real brand name in our research). Y has relatively high brand visibility in China. The reporters conducted an in-depth investigation and found that Company Y did not conduct some food safety tests required by the state, and there were cases where the products were shipped directly without passing relevant tests. These tests assess levels of nitrates, selenium and other substances. If people consume food products with an excess amount of the substances specified by the state, they may have negative physiological reactions such as dizziness, vomiting, and so on. Severe cases may cause acute poisoning or even be life-threatening

      In addition to Company Y, the reporters found that many other Chinese dairy firms have similar food safety management issues

      At present, the milk produced by the aforementioned companies (including Company Y) has been sold in your provincial region

    2. (B)

      Scenario description for an industry with a low level of crisis frequency (the Chinese soymilk industry)

      According to a reliable media report on October 26, 2016, many Chinese soymilk firms were found to have food safety management problems. The reported soymilk firms included Company Y (in order to avoid legal disputes, we use “Y” to replace the real brand name in our research). Y has relatively high brand visibility in China. The reporters conducted an in-depth investigation and found that Company Y did not conduct some food safety tests required by the state, and there were cases where the products were shipped directly without passing relevant tests. These tests assess levels of nitrates, selenium and other substances. If people consume food products with an excess amount of the substances specified by the state, they may have negative physiological reactions such as dizziness, vomiting, and so on. Severe cases may cause acute poisoning or even be life-threatening

      In addition to Company Y, the reporters found that many other Chinese soymilk firms have similar food safety management issues

      At present, the soymilk produced by the aforementioned companies (including Company Y) has been sold in your provincial region

Appendix 2

See Table 10.

Table 10 Factor loadings
Full size table

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Chen, S., Zhang, J.A., Gao, H. et al. Trust Erosion During Industry-Wide Crises: The Central Role of Consumer Legitimacy Judgement. J Bus Ethics 175, 95–116 (2022). https://doi.org/10.1007/s10551-020-04588-0

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10551-020-04588-0

Keywords

Search

Navigation