Satisfaction, corporate credibility, CEO reputation and leadership effects on public relationships

Abstract

The purpose of this study is to examine the effects that negative and positive news stories about corporate activities have on customer relationships with those companies. To test the proposed hypotheses, a 2 by 2 (positive versus negative news story; high versus low customer satisfaction) factorial design was implemented. The dependent variables are corporate credibility, CEO reputation for leadership and customer perceptions of the quality of customer-company relationships. The study confirms the impact of negative news stories on relationship building. The experiment that was run to collect data provides a better understanding of how differently slanted news stories, when combined with customer satisfaction levels, affect customer-corporate relationships. The study also provides information about the role that intangible assets play in relationship building. The findings indicate that negative media coverage of corporations has the potential to damage the image of a corporation and its CEO. © 2011 Macmillan Publishers Ltd.