The “Bigger” Company Responsibility — When One Bad Product Harms a Country’s Image

Abstract

Since the 1960s, extensive research efforts on country of origin support the assumption that origin cues impact consumption behavior (Al-Sulaiti and Baker, 1998). Peterson and Jolibert (1995) state country of origin as one of the most widely studied phenomena in all the international business, marketing and consumer behavior literatures. When looking at the research on country of origin, we see a development from understanding the effect one-dimensionally as any positive or negative influence that the country related to the product might have on the consumer’s choice processes behaviour (Schooler, 1965, Chao 1993, Samiee, 2004, Papadopoulos and Heslop, 2003) to a more specific understanding of where a product is made (Zhang, 1996). Most of the existing studies therefore focus on “made-in“-effects (country of manufacturing) or image spillover with regard to the country of assembly (Nebenzahl, Jaffe and Lampert, 1997, Yong, 1996). Following management challenges arising from globalization and leading to a repositioning of company activities to a number of different countries, the one-dimensional understanding of the country of origin effect seems out-dated (Bluemelhuber, Carter and Lambe, 2007). Johansson and Nebenzahl (1986) therefore postulate the differentiation of the effect in country of manufacturing and country of branding. Their proposition is supported by a number of studies showing that consumers are able to distinct different effects of the country origin (Chao, 1993, Sadrudin and d’Astous, 2002, Thakor and Lavak, 2003, Brodowsky, Tan and Meilich, 2004). Hence, in more recent studies the focus is on the country of branding (Johansson, Douglas and Nonak,a 1985, Ozsomer and Cavusgil, 1991, Phau and Prendergast, 2000) or, as other authors call it, brand origin (Thakor and Kohl,i 1996, Johansson, Douglas and Nonaka, 1985, Chattalas, Kramer and Takada, 2008). Additionally, even more detailed specifications like the country of design (Nebenzahl, Jaffe and Lampert, 1997, Jaffe and Nebenzahl, 2001), the country of parts or the origin of top management are examined (Pharr, 2005).