Consequential cognition: Exploring how attribution theory sheds new light on the firm‐level consequences of product recalls

• DOI: http://doi.org/10.1002/job.2350
• Author: T. Russell Crook,Jonathan Edwards,Matthew T. Jenkins,Timothy P. Munyon,N. Paul Harvey
• Date: 01 June 2019
• Published date: 01 June 2019

SPECIAL ISSUE ARTICLE

Consequential cognition: Exploring how attribution theory

sheds new light on the firm‐level consequences of product

recalls

Timothy P. Munyon

1

|Matthew T. Jenkins

2

|T. Russell Crook

1

|Jonathan Edwards

3

|

N. Paul Harvey

4

1

Department of Management, The University

of Tennessee, Knoxville, Tennessee

2

Department of Logistics and Supply Chain

Management, Georgia Southern University,

Statesboro, Georgia

3

Insurance Services, Caterpillar Financial

Services Corporation, Nashville, Tennessee

4

Department of Management, University of

New Hampshire, Durham, New Hampshire

Correspondence

T. Russell Crook, The University of Tennessee,

Department of Management, Knoxville,

Tennessee, 37996.

Email: tcrook@utk.edu

Summary

It is unclear why some firms suffer greater negative consequences than others follow-

ing a product recall. To shed light on this question, we extend attribution theory to

the firm level to explore how consumers engage in an attributional process following

product recalls that shapes their responses to firms. Integrating attribution theory and

the demand side theoretical perspective, we assert that consumer judgments of

responsibility toward manufacturers are shaped by causal data regarding the locus

of causality (i.e., manufacturer or supplier) and controllability (i.e., prior knowledge

or awareness) of a recalled product's potential for harm. We then examine the impact

of product recall characteristics on judgments of responsibility and firm‐level out-

comes using an experimental test involving responses from 320 subjects. Our findings

suggest that judgments of responsibility are attributed to the manufacturing firm

more when consumers are given causal information indicating that the firm is the

source of, or is aware of, a product's defects. The results also indicate that judgments

of responsibility can have costly firm‐level consequences in the form of reputational

damage, diminished consumer purchase intentions, and increased legal damage

recommendations. We discuss theoretical contributions, practical implications, and

opportunities for further research.

KEYWORDS

attribution, demand side, firm reputation, legal liability, product recall, purchase intentions

1|INTRODUCTION

Attribution theory describes the cognitive processes through which

causal assessments are made (Martinko, 1995). The theory is based

on the premise that individuals are motivated to understand and con-

trol their environments (Heider, 1958; Jones & Davis, 1965; Weiner,

1985a, 1985b), and attribution theory has been applied to help

understand a wide range of organizational phenomena (see Harvey,

Madison, Martinko, Crook, & Crook, 2014 for a review), including

how responsibility and blame are assigned to individuals after negative

events (Fincham & Jaspers, 1980; Heider, 1958; Shaver, 1985;

Weiner, 1995, 2006). However, beyond describing causal inferences

about individual behavior, attribution theory also may hold promise

to help explain how observers assign responsibility and blame for

negative firm actions (Foss & Pederson, 2016; Staw, 1991).

Few negative events are arguably as significant and salient for

firms as product recalls (Chen, Ganesan, & Liu, 2009; Laufer &

Coombs, 2006; Pruitt & Peterson, 1986; Wowak & Boone, 2015;

Zavyalova, Pfarrer, Reger, & Shapiro, 2012), which occur when a firm

attempts to recover defective items from the market (Ketchen,

Wowak, & Craighead, 2014). Product recalls are generally unforeseen,

often receive significant media coverage (e.g., Zavyalova et al., 2012),

and may result in product‐harm crises when defective items harm

users (Laufer & Coombs, 2006). As such, these events are likely to

Received: 31 December 2017 Revised: 20 December 2018 Accepted: 23 December 2018

DOI: 10.1002/job.2350

J Organ Behav. 2019;40:587–602. © 2019 John Wiley & Sons, Ltd.wileyonlinelibrary.com/journal/job 587

elicit an attributional process as observers seek to understand what

caused the recall and respond accordingly. Thus, attribution theory

may help explain why firms are held more or less responsible for

product recalls, and how judgments of responsibility impact

subsequent consumer responses to the firm (cf. Brauer, 2014; Jolly

& Mowen, 1985; Lutz, 2011). As Ketchen et al. (2014, p. 13) note,

“The damage caused by a recall often centers on how much trust

consumers and other stakeholders lose in the firm.”

Weiner's (1995; 2006) theory of social conduct broadly considers

how individuals make attributions and assign judgment and blame

following an event. He predicts that observers will assess judgments

of responsibility for a negative outcome depending on whether the

outcome was due to the actor or environment (i.e., locus of causality),

and whether the actor had control to alter the negative event

(i.e., controllability; Weiner, 2006, p. 42). In a product recall context,

if observers conclude that a manufacturer was aware of and had

knowledge about a product's harmful potential prior to a recall but

chose not to act (an internal and controllable attribution), an assump-

tion of negligence is likely (Weiner, 2006). Conversely, manufacturers

may be penalized less severely by consumers who attribute the recall

to the firm's ignorance of the product's potential for harm (an internal

and uncontrollable attribution) (Feigenson, Park, & Salovey, 1997;

Robinson, 1975), and still less severely by those who attribute the

problem to external causes, such as a supplier error (Weiner, 1995).

When combined with theory on consumer responses to firms (Priem,

Li, & Carr, 2012), this logic can also be extended to help explain

differences in consumer reactions to manufacturers following

product recalls.

Thus, the overarching purpose of this paper is to extend attribu-

tion theory to the firm level and explore how consumers assess

judgments of responsibility and respond to firms following a product

recall. In this investigation, we experimentally manipulate causal data

regarding product defect source (i.e., locus of causality) and defect

knowledge (i.e., controllability) to assess how consumers attribute

judgments of responsibility toward the manufacturer, and we then

assess their subsequent responses to the manufacturer across a

range of short‐term and long‐term outcomes. Figure 1 shows our

conceptual model.

Several intended contributions derive from this investigation.

First, we test whether the individual and interpersonal tenets of

attribution theory can be applied to firm‐level phenomena, demon-

strating how consumers make attributions and differentially react to

manufacturers based on locus of causality (i.e., defect source) and con-

trollability (i.e., defect knowledge) causal information. In doing so, we

consider how recalls and attributions affect consumer responses, also

contributing to the demand‐side theoretical perspective (Priem et al.,

2012; Priem & Swink, 2012). Second, we contribute to legal theory

by examining how locus of causality and controllability impact

judgments of responsibility for a product recall and subsequent

recommended legal liability damages. Here, we bridge the law and

strategic management literatures, and also highlight how cognitive

processes affect legal judgments (see Shaver, 1985 for a discussion)

and shed new light on Weiner's (1995; 2006) theory by highlighting

how judgments of responsibility shape relationships between causal

dimensions and observer liability reactions. Third, our measurement

of judgments of responsibility accommodates the complexity of

shared responsibility, testing a proposition advocated by Shaver

(1985) in his theory of blame. Fourth, we incorporate and test current

(i.e., reputation damage, legal liability damages) and future (i.e., pur-

chase intention changes) firm level consequences of product recalls,

helping shed new light on the short‐term and longer‐term temporal

ramifications of these events. Finally, we contribute to situational

crisis communication theory (Coombs, 2007) by showing how the

dimensions of locus of causality and controllability affect responses

to manufacturers after a product recall. Specifically, by understanding

the attributional process through which product recalls result in firm

level consequences, theorists and managers alike can better under-

stand how to adapt and manage communication following a product

recall to minimize negative consequences.

2|JUDGMENTS OF RESPONSIBILITY

FOLLOWING PRODUCT RECALLS

Responsibility refers to the belief that an actor possessed the power to

change concrete or moral consequences (cf. Rhéaume et al., 2000;

Weiner, 1985c, 2006). In his seminal contribution, Heider (1958) differ-

entiated how responsibility was assigned to individuals by observers

based on their association with the negative event (Schlenker, Britt,

Pennington, Murphy, & Doherty, 1994). Specifically, individuals are

judged responsible for connections to an event, as well as actions they

intended, commit, or could have foreseen.Finally, judgments of respon-

sibility depend on the presence or absence of extenuating circum-

stances potentially impacting an event's occurrence (Heider, 1958).

FIGURE 1 Conceptual model: Attributional processes following a product recall

588 MUNYON ET AL.