Why and when firms respond accommodatively to the product-harm crisis: An institutional perspective. (September 2022) - Liu, Yang
Abstract: Accommodative response, as an attempt to manage product-harm crises to meet consumers' expectations by proactively accepting responsibility and actively taking remedial actions, is gradually becoming institutionalized. Our research explores the impacts of coercive, mimetic, and normative pressure on a firm's accommodating reaction and evaluates the possible mediating effects of top management beliefs (TMB) and participation (TMP), based on institutional theory and upper management echelons theory. The proposed hypotheses are empirically examined with survey data from 178 top managers in Chinese automobile firms. The potential endogeneity problem has been tackled by using firm size as the appropriate instrumental variable. Analysis results suggest that the three types of institutional pressures affect TMB and TMP differently, and TMP influences accommodative response positively while TMB exerts an indirect effect through TMP. Our findings emphasize the crucial mediating effects of top management and uncover the underlying mechanism through which institutional pressures affect accommodative response.