Company Response to Negative Online Reviews: The Effects of Procedural Justice, Interactional Justice, and Social Presence. (August 2020)

• Record Type: Journal Article
• Authors: Olson, Eric D.; Ro, Heejung
• Is Part Of: Cornell hospitality quarterly. Volume 61:Number 3(2020:Aug.)
• Page Start: 312
• Page End: 331
• Publication Date: 2020-08
• Subjects: negative online review -- company response -- justice -- social presence -- trust; Hospitality industry -- Periodicals; Hotel management -- Periodicals; Restaurant management -- Periodicals; 338.4791
• DOI: 10.1177/1938965519892902
• Languages: English
• ISSNs: 1938-9655

Abstract

This research investigates how potential customers evaluate a company response to negative online reviews. Integrating the literature on perceived justice in service recovery, social presence in online communications, and signaling in trust formation process, this research examines the effects of procedural justice, interactional justice, and social presence in the company's response to negative online reviews on potential customers' trust and purchase intentions toward a company. A 2 × 2 × 2 between-subject experimental design is utilized, and 410 participants are recruited through a consumer panels firm. Main results include the three-way interaction effect of procedural justice, interactional justice, and social presence on trust and the mediating effect of trust. Social presence exacerbates the negative effects on trust when both interactional justice and procedural justice are low in the company response. However, the social presence effect becomes small in increasing trust when both interactional justice and procedural justice are high in the company response. Trust mediates the relationship between customer perceptions of company response and purchase intentions. This research provides practical implications for hospitality companies on how to effectively respond to negative online reviews.