The study’s authors examine two potential ways that a CSR halo effect could protect an organization from a reputation crisis:
- ‘Benefit of the Doubt’ Halo Effect
- ‘Shield’ Halo Effect
‘Benefit of the Doubt’ Halo Effect Theory
In the halo as benefit of the doubt theory, a favorable prior reputation (i.e., halo) would reduce attributions of crisis responsibility:
- A stakeholder might give the organization the ‘benefit of the doubt’ by assigning the organization less responsibility for the crisis (Caponigro, 2000;Fombrun, 1996).
- Weaker attributions of crisis responsibility will result in less reputation damage from the crisis (Coombs and Holladay, 1996, 2002; Klein and Dawar, 2004).
Theoretically, an organization given the benefit of the doubt is not assigned as much crisis responsibility as would be assigned to an organization with an unknown or unfavorable reputation.
‘Shield’ Halo Effect Theory
The Shield Halo Effect theory suggests that a positive reputation deflects reputation damage that would otherwise have been caused by alleged irresponsibility.
The Shield Halo Effect is part of a larger psychological phenomenon known as expectancy confirmation. Research suggests people are reluctant to revise initial expectations even when confronted with contrary evidence (Traut-Mattausch et al., 2004).
Stakeholders are biased when processing new information to support previous conclusions/beliefs (Dean, 2004). Consistent with expectancy confirmation theory, stakeholders cling to the favorable reputation and ignore the negative information associated with the crisis.
The study found statistically-significant evidence of CSR leading to a halo effect. The halo operated in a limited range for organizations with very favorable prior reputations.
The CSR Halo Effect ‘Shield’ theory was confirmed. However, the ‘Benefit of the Doubt’ theory was not.
The opposite is also true: Research has also shown that an unfavorable prior reputation hurts an organization in crisis. For instance:
- “Klein and Dawar (2004) conducted… experiments using product harm as the crisis. Participants were given either favorable, unfavorable, or no specific corporate social responsibility reputation information about the organization as the reputation manipulation. The participants in the unfavorable reputation condition attributed greater crisis responsibility (blame) to the organization than those in the neutral or favorable conditions. However, the neutral and favorable conditions did not differ from one another.”
Klein and Dawar (2004, p. 215) noted: While “a neutral image might provide as much protection in a product-harm crisis as a positive image, a negative image will be a powerful liability to a firm facing such a crisis.”
Instructions to access the full report of: Unpacking the Halo Effect
Journal of Communication Management
W. Timothy Coombs and Sherry J. Holladay