An Exploratory Study Investigating Order Effects in Reporting Negative Corporate Communications

John C. Mowen, Oklahoma State University (MBA Student), Charles Machine Works, Inc.
Scott B. Pollman,
ABSTRACT - A 3 x 3 factorial experiment was developed to test consumer reactions to variations in the order of the presentation of information about the severity of a product defect. The results revealed that consumer's perceived a company most favorably when its first press release gave the worst possible outcome of the product defect and later releases reported the defect severity at moderate levels. The results also revealed that consumer reactions to a recall vary depending on the type of product recalled.
[ to cite ]:
John C. Mowen and Scott B. Pollman (1982) ,"An Exploratory Study Investigating Order Effects in Reporting Negative Corporate Communications", in NA - Advances in Consumer Research Volume 09, eds. Andrew Mitchell, Ann Abor, MI : Association for Consumer Research, Pages: 215-220.

Advances in Consumer Research Volume 9, 1982      Pages 215-220

AN EXPLORATORY STUDY INVESTIGATING ORDER EFFECTS IN REPORTING NEGATIVE CORPORATE COMMUNICATIONS

John C. Mowen, Oklahoma State University

Scott B. Pollman (MBA Student), Charles Machine Works, Inc.

ABSTRACT -

A 3 x 3 factorial experiment was developed to test consumer reactions to variations in the order of the presentation of information about the severity of a product defect. The results revealed that consumer's perceived a company most favorably when its first press release gave the worst possible outcome of the product defect and later releases reported the defect severity at moderate levels. The results also revealed that consumer reactions to a recall vary depending on the type of product recalled.

INTRODUCTION

Negative or unfavorable public information regarding a company and/or its products is of major concern to business. Exposure to unfavorable information results from such sources as reports of defective products, news media presentations of corporate earnings (e.g., the oil industry), and publicity concerning questionable competitive practices. An excellent case in point is the Three Mile Island nuclear incident. The negative information resulting from the incident has seriously jeopardized the future of the nuclear power industry in the United States. In a recent study regarding the effects of negative product information, Weinberger and Dillon (1979) found that: (1) unfavorable product ratings tended to have a greater impact on purchase intention than did favorable ratings, (2) unfavorable product information received from an independent testing agency or peer as a source had a relatively stronger effect on purchase intentions than did similar information communicated by the trade and professional association source, and (3) consumers probably place more reliance on outside sources of information when purchasing a service as opposed to purchasing a product. These findings emphasize the necessity of an organization to react effectively when consumers receive negative information concerning that organization.

Product recalls have become a common avenue by which consumers are exposed to negative corporate information. Approximately 25 percent of all consumer goods firms listed in Fortune's 500 were involved in recall campaigns in 1974 (Kerin, 1974). The Conference Board estimates that 25 million product units will be recalled every year (McGuire, 1975).

Because of the increasing number of product recalls, many articles have been written on the subject from a "corporate management" perspective. Researchers have written articles concerning the physical tracing and recall of the products (Fisk and Chandran, 1975; Warner, 1975), contingency plans for recalling products (Kerin, 1974), the impact of recalls on market share (Gray, 1978; Wynne and Hoffer, 1976), assessing the effectiveness of drug recalls in pharmacies (Gumbhir and Jamison, 1975), surviving product recalls (Snyder, 1974), and the high costs associated with product recalls (Tamarkin. 1978).

RESEARCH ON PRODUCT RECALL REACTIONS

As noted above, scholars have addressed the managerial questions of "how to" recall a product. Relatively little attention, however, has been focused on investigating consumer reactions to the negative information resulting from a product recall.

Investigations of the impact of product recalls on consumer impressions of the company have been conducted by Mowen and his colleagues (Mowen 1980, Mowen and Ellis 1980, Mowen, Jolly and Nickells, 1981). Two types of methodologies were used in these studies. The experimental methodology consisted of constructing several variations of a fictitious magazine article within which critical pieces of information were varied. In the second type of methodology consumers were surveyed to determine their knowledge of product recalls and their reaction to companies making recalls.

Mowen and Ellis (1980) reported on an experimental study in which three variables were manipulated within a fictitious magazine article about a company recalling a coffee percolator. The level of injury was varied by indicating that either minor burns or two deaths had resulted from the defective product. The number of previous recalls was varied by indicating that since 1970 the company had conducted either zero or five previous recalls. The length of time to recall was manipulated by stating that management made the decision within either a two week period or a one year period. The results of the study revealed that each of the independent variables significantly influenced the subjects perceptions of the company and subjects interest in buying a new coffee pot from the company.

In a second study Mowen (1980) again varied three variables within the context of a magazine article about a percolator recall. The three independent variables were: (1) familiar versus unknown company making the recall, (2) action or inaction by the Consumer Product Safety to mission to force the recall, and (3) whether or not other manufacturers had made similar recalls. The results revealed that consumers perceived a familiar company as significantly less responsible for a defect than an unfamiliar company. It was also found, unexpectedly, that consumers perceived the company as more responsible when it acted prior to intervention by the Consumer Product SafetY Commission.

In the survey research Mowen, Jolly, and Nickells (1981) interviewed 201 adults of both sexes about their reactions to recalls mate by Ford, Firestone, Conair, and Corning Glass. Separate regression equations were run on each company with the subjects' perception of the company as the criterion variable. The results of the step-wise regression analysis revealed that for Conair the subjects' perceptions of the danger of the product and of the company's responsibility for the defect were significantly related to the impression of the company (R2 = .09). For Fort subjects' impressions of the company's social responsibility to consumers entered the equation (R2 = .19). For Firestone the danger of the product, the company's social responsibility, knowledge of recalls by other tire manufacturers, and knowledge of the recall by Firestone entered the equation (R2 = .32). No significant effects were found in the analysis of the impressions of Corning Glass.

The results of the survey study partially supported the results of the experimental work. First, variations in the perception of the danger of the product were related to consumer impressions of the company in two instances, Second, path analysis results revealed that the perceived time taken to recall the product may have influenced consumer impressions of the company by first influencing the perceptions of the corporations social responsibility to consumers. This prediction was derived from the theoretical base on which the hypotheses were developed in the Mowen and Ellis (1980) study. Third, the lack of effects for Corning Glass supported the results of Mowen (1980 ). Corning was rated significantly more positively than the other companies, and its impression was unaffected by having made a recall. Such results support those found in the Mowen (1980) study and suggest that if a company is highly respected the negative effects of a recall may be minimized. The survey work in one notable instance failed to support the experimental findings. No evidence was found that knowledge of previous recalls by other companies influenced perceptions of the company.

The purpose of the present exploratory study is to supplement current knowledge concerning negative corporate/ product information by determining how consumers' perceptions are affected by the order in which a company presents information on the severity or extent of a corporate problem.

When a corporate incident occurs, management must release information to the public relatively quickly. During the first few hours or days of the incident, it may be impossible to assess the true severity of the problem. Yet, information on the sensitive issue has to be revealed. In the face of the difficulty, three alternatives are available: (1) give the worst possible outcome of the incident and then hopefully be able to decrease the level of the reported severity of the problem through subsequent press releases as more information becomes available, (2) give the best possible outcome of the defect and then face the possibility of having to increase the reported severity of the defect through subsequent press releases, or (3) take a middle ground and be prepared for subsequent press releases to move either in a more positive or negative direction.

In examining corporate behavior one generally finds that corporations understate the severity of the product defect or problem. That is, in the initial press releases, the company portrays the problem in the best possible manner. Examples are the Ford Motor Company's recall of the Pinto, the Firestone, Inc. recall of the "500" tire and the "Three Mile Island" nuclear incident. Several reasons probably exist for this tendency to understate the defect severity. First, by "playing down" the severity of the problem, a massive recall may be avoided. A second possibility is that management assumes that by portraying the problem in the most favorable mannerS the negative impact of the incident on consumer perceptions of the company would be minimized.

From at least one theoretical perspective, however, it can be predicted that underCreporting the severity of an incident may lead to negative consumer reactions. Jones and Davis (1965) discussed how observers determine the believability of a message and hypothesized that, the less expected a communicator's position, given his personal characteristics and situational pressures, the stronger the perceiver's inference that the message corresponds to external reality. That is, by delivering a message against ones own best interests, in an "outCofCrole" or unexpected (given the circumstances) manner, the belief that the message corresponds to the facts would be increased .

Applying the Jones and Davis (1965) analysis to corporate communications, one can predict that consumers would tend to expect corporations to deliver self-serving messages. Thus, a message which downgrades the severity of an incident would be perceived as expected or "in-role" and, therefore, of low credibility. Conversely, a message perceived as opposed to the corporation's own best interest would be unexpected or "out-of-role" and, therefore, of high credibility. Based upon these considerations, the major hypothesis was formulated:

H1: The order of the reported severity of a product defect will affect consumers t perceptions of the organization releasing the negative information. Specifically, perceptions will be most favorable when first reports give the worst possible outcome (overstate the severity) of the defect. Contrastingly, consumer perceptions will be least favorable when first reports give the best possible outcome (understate the severity) of the defect.

The second variable chosen for manipulation was the type of product recalled. It was desired to have different products in order to begin the process of testing the generality of any effects found. Therefore, the products selected for examination were lawnmowers, automobiles, and contact lenses.

METHOD

Experimental Overview

A 3 x 3 between groups factorial experimental design was used in which the factors of order of the reported severity of the defect (extremely low, to low, to moderate; very serious, to serious, to moderate; moderate to moderate to moderate), and the type of product recalled (lawnmower, automobile, or contact lenses) were manipulated

In the experiment, subjects received information in the form of fictitious press releases concerning a product defect. Each subject received three press releases dated five weeks apart. Within the contents of the press releases, the manipulation of the severity of the reported defect was made. Three different sets of press releases were developed. In the "severe danger" condition, the first release depicted the defect as possibly highly dangerous. The next release described the defect as slightly less dangerous than first thought. The final release indicated a moderate amount of danger and the recall of the product. In the "low danger" condition, the first release indicated no problem with the product. The next release indicated that no conclusive evidence of a defect had been found. The final release was exactly the same as in the "severe danger" condition. In the "moderate" danger conditions, the first release stated that a defect may exist, but due to the uncertainty of the situation the extent of danger could not be determined. In the next release the uncertainty was again reinforced while indicating that a highly dangerous defect could exist or that complaints could prove groundless. The third release was identical to those in the "severe" and "low" severe conditions.

Subjects

One hundred thirty-four subjects of both sexes were drawn from undergraduate business classes at a large midwestern university.

Procedure

The subjects first read the directions of the study (all of the subjects read the same directions):

On the attached page are press releases from a fictitious company which recently had some problems with a product. As you will note, the three press releases occurred at about 5 week intervals.

After reading the press releases, please answer the questions on the last page. Examine how you would react to the press releases and the Company. Indicate your feelings on the 7 questions provided.

Each subject then read the three press releases (dated at five week intervals) detailing the circumstances and procedure of the ultimate recall. Within these sets of press releases, the two independent variables of "reported severity of the defect" and "type of product recalled" were varied resulting in nine different treatment combinations.

The press releases for the three products were worded almost identically, except for the necessity to realistically describe the product defect and the corporate reactions. Presented below is the material which subjects read for the defective contact lenses. In the low severe conditions subjects read:

PRESS RELEASE

September 5, 1978

Specialty Optics, Inc. and the Federal Drug Administration have been jointly concerned with recent reported problems with some of Specialty Optics' soft contact lenses. Unconfirmed reports have revealed the possibility that problems may exist in the sterilization process of the lenses. The result is that harmful bacteria may be transferred from the lenses to the wearer's eye. Specialty Optics has sold 150,000 pairs of the lenses and has received 5 complaints of wearers contracting such an infection.

Specialty Optics believes that these lenses are trouble free and pose no danger. The low number of complaints in relation to the total units sold represents no greater problem with the lenses than with the company's other lenses or those of Specialty Optics' competitors.

Specialty Optics, however, recommends that people who purchase a pair of Specialty Optics' soft contact lenses pay particular attention to the possibility of eye irritation. If excessive irritation develops, contact your eye doctor.

PRESS RELEASE

October 10, 1978

On September 5, 1978, Specialty Optics announced that problems exist in their soft contact lenses. The preliminary analysis revealed that problems may exist in the sterilization process of the lenses. Since September 5, 3 additional unconfirmed reports have been received of wearers contracting a bacterial eye infection.

Preliminary tests performed by Specialty Optics have found some evidence that a batch of the lenses may have been omitted from the sterilization process. However, conclusive evidence has not been found that a problem exists.

Specialty Optics now regards the defect as slightly more dangerous than first thought. People who have purchased Specialty Optics' soft contact lenses are asked to pay particular attention to the possibility of eye irritation. If excessive irritation develops, contact your eye doctor.

PRESS RELEASE

November 21, 1978

On September 5, 1978, Specialty Optics, Inc. announced the possibility that problems exist in the sterilization process of its soft contact lenses. Since that time, extensive efforts have been made to determine if a defect exists in the lenses.

Early evidence of a possible omission from a necessary sterilization process has been confirmed. The final classification of the defect, according to the Consumer Product Safety Commission's categories, is that wa situation may exist in which the use of, or exposure to, the defective product may cause temporary or medically reversible adverse health consequences, or one in which the probability of serious adverse health consequences is remote."

People who purchase a pair of Specialty Optics' soft contact lenses during the months of June and July, 1978, are requested to return the lenses to their eye doctor. Individuals affected will be provided with a new pair of lenses free of charge.

In the high severe conditions, subjects read:

PRESS RELEASE

September 5, 1978

Specialty Optics, Inc. and the Federal Drug Administration have been jointly concerned with recent reported problems with some of Specialty Optics' soft contact lenses. Unconfirmed reports have revealed the possibility that problems may exist in the sterilization process of the lenses. The result is that harmful bacteria may be transferred from the lens to the wearer's eye. Specialty Optics has sold 150,000 pairs of the lenses and has received 5 complaints of wearers contracting such an infection.

Specialty Optics is treating these unconfirmed reports as revealing a potentially highly dangerous defect. Specialty Optics is tentatively classifying the potential defect in the Consumer Product Safety Commission's most serious category. While the classifications may change, the company follows the Consumer Product Safety Commission's category that a situation may exist "in which there is reasonable probability that the use of, or exposure to, the defective will cause serious adverse health consequences or death."

As part of Specialty Optics' corporate philosophy of emphasizing consumer safety, the company is suspending further sales of the lenses until further information may be obtained.

Specialty Optics recommends that people who have purchased a set of Specialty Optics' soft contact lenses pay particular attention to the possibility of eye irritation. If irritation develops, contact your eye doctor.

PRESS RELEASE

October 10, 1978

On September 5, 1978, Specialty Optics, Inc. suspended sales of its soft contact lenses. The suspension resulted from unconfirmed reports that problems exist in the lens sterilization process. Since September 5, 3 additional unconfirmed reports have been received of wearers contracting a bacterial eve infection.

Preliminary tests performed by Specialty Optics have found some evidence that a batch of the lenses may have been omitted from the sterilization process. However, conclusive evidence has not been found that a problem exists.

Specialty Optics now regards the defect as slightly less dangerous than first through. The suspension of sales, though, continues. People who have purchased a set of Specialty Optics' soft contact lenses are again encouraged to contact their eye doctor to determine if their lenses are among those affected.

PRESS RELEASE

NOVEMBER 21, 1978

On September 5, 1978, Specialty Optics, Inc. announced the suspension of sales of its soft contact lenses. Since that time, extensive efforts have been mate to determine if the defect exists in the lenses.

Early evidence of a possible omission from a necessary sterilization process has been confirmed. The final classification of the defect, according to the Consumer Product Safety Commission's categories, is that "a situation may exist in which the use of, or exposure to, the defective product may cause temporary or medically reversible adverse health consequences, or one in which the probability of serious adverse health consequences is remote."

Individuals purchasing a pair of Specialty Optics' soft contact lenses during the months of June and July, 1978, are requested to return the lenses to their eye doctor. Individuals affected will be provided with a new pair of lenses free of charge.

In the moderate severe conditions, subjects read:

PRESS RELEASE

September 5, 1978

Specialty Optics, Inc. and the Federal Drug Administration have been jointly concerned with recent reported problems with some of Specialty Optics' soft contact lenses. Unconfirmed reports have revealed the possibility that problems may exist in the sterilization process of the lenses. The result is that harmful bacteria may be transferred from the lens to the wearer's eye. Specialty Optics has sold 150,000 pairs of the lenses and has received 5 complaints of wearers contracting such an infection.

As of September 4, 1978, the existence of and severity of the possible defect in the soft lenses cannot be determined. The possibility of a highly dangerous defect exists. However, the complaints may also be groundless. Because of the uncertainty surrounding the existence and extent of the defect, Specialty Optics recommends that people who purchased Specialty Optics' soft contact lenses, pay particular attention to the possibility of eye irritation. If excessive irritation develops, contact your eye doctor.

PRESS RELEASE

October 10, 1978

On September 5, 1978, Specialty Optics announced that problems may exist in the sterilization process of its soft contact lenses. The investigation of the possible omission resulted from unconfirmed reports that some wearers of the lenses may have developed bacterial infections. Since September 5, 3 additional unconfirmed reports have been received of wearers who have developed eye infections.

Preliminary tests performed by Specialty Optics have found some evidence that the lenses may have been omitted from the sterilization process. However, conclusive evidence has not been found that a defect exists.

As of October 9, 1978, the existence and severity of the possible defect in the soft lenses still cannot be determined. Specialty Optics would like to emphasize to the public that a highly dangerous defect could exist. However, the complaints could be groundless. Because of the uncertainty surrounding the existence and extent of the defect, Specialty Optics recommends that people who purchased Specialty Optics' soft contact lenses during the months of June and July, pay particular attention to the possibility of eye irritation. If excessive irritation develops, contact your eye doctor.

PRESS RELEASE

November 21, 1978

On September 5, 1978, Specialty Optics announced that its soft contact lenses mag have problems in their sterilization process. Since that time, extensive efforts have been made to determine if a defect exists in the lenses.

Early evidence of a possible omission from a necessary sterilization process has been confirmed. The final classification of the defect, according to the Consumer Product Safety Commission's categories, is that "a situation may exist in which the use of, or exposure to, the defective product may cause temporary or medically reversible adverse health consequences, or one in which the probability of serious adverse health consequences is remote.

People who purchased a pair of Specialty Optics' soft contact lenses during the months of June and July are requested to return the lenses to their eye doctor. Individuals affected will be provided with a new pair of lenses free of charge.

Dependent Variables

On seven-point rating scales (1 - most positive) subjects answered seven questions:

1. What is your general impression of the (Name) Corporation? ("Very favorable" to "Very unfavorable")

2. If you needed a new (product), how interested would you be in buying the new model which replaced the defective model? ("Highly interested" to "Completely disinterested")

3. How credible do you perceive the communications of the Corporation to be? ("Very credible" to "Not very credible at all")

4. How responsible is the corporation for the defect? ("Highly responsible" to "Not responsible")

5. How concerned with consumer welfare do you perceive the Corporation to be? ("Highly concerned" to "Not concerned at all")

6. Would the recall of the defective product influence your future purchases of the company's other products? ("Definitely yes" to "Definitely no")

7. How honest do you perceive the Corporation to be? ("Very honest" to "very dishonest")

RESULTS

In order to avoid potential alpha inflation due to the seven dependent variables, the data were first analyzed via factor analysis. The principle components analysis with varimax rotation yielded two factors with eigenvalues greater than one. Factor 1 accounted for 48.2 percent of the variance and Factor 2 an additional 17.1 percent. Five variables entered Factor 1, and only one variable entered Factor 2 -the responsibility of the corporation for the defect. Question 6, which asked subjects to consider whether the recall would influence future purchases, loaded equally on both factors. (All factor loadings were above .61 except for question 6.)

The five variables loading on Factor 1 were analyzed via multivariate analysis of variance. Significant effects were found for both the order of severity and the type of product independent variables. The interaction was not significant. Tests of significance using the Hotelling-Lawley trace, Pillai's trace, and Wilks' criterion all yielded identical F scores [order, F(10,240) = 1.85, p < .05; product, F(10,240) = 3.57, p < .0002.].

The univariate analysis of variance on the "order of severity" independent variable yielded a consistent pattern of results in which four of the five variables loading on Factor 1 were significant. Significant main effects were obtained for the dependent variables of impression of the company (p < .01), corporate credibility (p < .07), corporate concern with consumer welfare (p < .07), and corporate honesty (p < . 08) (See Table 1). Duncan's Multiple Range tests revealed that in each case the corporation was perceived significantly (p < .05) more positively in conditions in which the first press release indicated that the defect posed severe danger than in the other two conditions.

Interestingly, the corporations in the low severe initial press release conditions tended to be perceived more favorably than in the moderate severe conditions. However, results of the Duncan Multiple Range tests revealed that only on the dependent variable assessing subjects' general impression of the company were the low severe conditions significantly different from the moderate severe conditions.

The univariate analyses comparing consumer perceptions of companies, based upon the type of product recalled, also revealed a consistent pattern of results (Table 2 presents the means). On the dependent variables of impression of the company (p < .05), concern for consumer welfare (p < .01), purchase of the company's other products (p < .02), and honesty (p < .01) one finds the company rated least favorably when it produced the automobile and of about equal favorability when it produced either the contact lenses or the lawn mower. Utilizing the Duncan's Multiple Range test, one finds for each of the above significant effects (except for consumer general impressions of the company) no significant differences between the lawn mower and contact lense conditions. However, the company was perceived significantly less favorably in the automobile condition than in the other conditions. The one exception was for ratings of the impression of the company in which the post hoc test revealed no significant effects between the three product conditions. despite the significant overall effect.

TABLE 1

MEAN RESPONSES FOR THE "ORDER OF SEVERITY INDEPENDENT VARIABLE

TABLE 2

MEAN RESPONSES FOR THE "PRODUCT"

DISCUSSION

As predicted, a company was perceived more favorably, more honest, more credible, and more concerned for consumer welfare if the company in the first press release gave the worst possible outcome of the defect and in later releases gave less serious accounts of the defect. These results support the hypothesis derived from the work of Jones and Davis (1965). Messages which were in-role, such that they follow the obvious interests of the communicator, tended to be perceived as less credible and as mate for the benefit of the sender and not the receiver.

The authors were surprised to find that subjects tended to perceive the low severe conditions more favorably than the moderately severe conditions. The moderately severe messages were constructed to portray an honest and forthright appraisal of the situation. Thus, the early press releases stressed that the complaints could be either groundless or indicants of a highly serious defect. Subjects were further informed that the situation was uncertain and that they should be alert to the possibility of a defect. Two possible mediators of this result may exist. First, it may be that admitting uncertainty is perceived negatively by consumers. A second possibility is that the subjects perceived the statements indicating uncertainty as a delaying tactic and that management already had the answer. Future research is required to identify which of these possibilities or perhaps which other explanation(s) may be operative.

While the exploratory research was not conducted to specifically test a model of corporate impression formation, a model can be advanced for future testing. An elaboration of the hypothesis tested in the study, the model would view the consumer as: (a) receiving the messages, (b) inferring whether the messages represent in-role or out-of-role behavior, (c) making a determination of the credibility and honesty of the company, (d) forming an impression of the company, and (e) forming expectancies about intentions to purchase products from the company. The results of the study were consistent with steps c and d of the motel. However, the evidence revealed that the order of severity variable did not impact upon intentions to buy (step e). Unfortunately, no measures were taken assessing the subject's perceptions of whether the managers represented in-role or out-of-role behavior.

When one examines the results of the manipulation of the type of defective product, it becomes apparent that an automobile defect is perceived highly negatively. Again additional research is required to identify the reasons for the outcome. Perhaps automobile defects (ant in particular a steering defect) are perceived as more serious than defects in lawn mowers or contact lenses. Importantly, the injuries resulting from the defect were held constant across products. In addition, the extent of the problem as defined in terms of the Consumer Safety Product Commissions categories was described identically for each product. Thus, the subjects must have perceived something inherently different about the automobile defect. A second possibility is that consumers may expect defects in automobiles. Therefore, the problem described may have triggered previously held negative feelings about car manufacturers.

As sometimes occurs in exploratory studies, a number of problems exist which should be corrected in future research. First, future research should focus on replicating the study across diverse subject samples. While college students provided an adequate sample for this initial study (i.e., they have had familiarity with each type of product and clearly form opinions about companies), future studies should utilize nonstudent samples. Furthermore, the experience of the subjects with defective products should be assessed. Second, future studies should focus on attempting to more clearly delineate the theoretical mediators--particularly the perception of in-role/out-of-role behavior. Additional questions should be asked, such as: How dangerous is the defect? How expected or unexpected was the message from the company? How frequently to you find defects in this type of product? Third, future studies should track changes in perceptions over time by separating the reading of each press release by several weeks. The methodology used in the present study in which all messages were provided simultaneously may not be generalizeable to conditions in which the messages are spaced. Fourth, testing of the model of corporate impression formation using path analysis would be a logical continuation of the research stream.

A last problem with the study is more serious and clearly indicates the need for additional work. In the severe to moderate condition, the company stated that it was suspending further sales in the initial press release. In the other conditions the suspension lid not occur. This confounding variable could explain the results rather than the variations in the order of severity. The control of whether a suspension of sales occurs in future studies is imperative.

REFERENCES

Fisk, G. and Chandran, R. (1975), "How to Trace and Recall Products," Harvard Business Review, 53, 90-96.

Gray, R. (1978), "Recalls Haven't Hurt Ford," Advertising Axe, 49, 19, 8.

Gumbhir, A. R. and Jamison, A. C. (1975), "Assessing the Effectiveness of Drug Recalls in Pharmacies," Drug and Cosmetic Industry, 117, 40-3, 113, 16.

Jones, E. E., Davis, K. E. and Gergen, K. J. (1965), "From Acts to Dispositions: The Attribution Process in Person Perception," in L. Berkowitz (ed.) Advances in Experimental Social Psychology (New York: Academic Press). 219-266

Kerin, R. A. and Harvey, M. (1975), "Contingency Planning for Product Recall," MSU Business Topics, 23, 5-12.

McGuire, E. P. (1975), "Product Recall and the Factors of Life," The Conference Board Record, 12, 13-15.

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Mowen, J. C. and Ellis, H. W. (1980), "Product Liability: Issues in Corporate Communications to Consumers and Jurors," 35th ASOC Midwest Conference Transactions. The Midwest Conference Board, American Society for Quality Control, Tulsa, Oklahoma, 83-89.

Mowen, J. C., Jolly, D., Nickell, G. S. (1981), "Factors Influencing Consumer Responses to Product Recalls: A Regression Analysis Approach," Proceedings of the Association for Consumer Research, Eleventh Annual Conference, Advances in Consumer Research: Vol. VII, Kent Monroe (ed.), Arlington, Virginia 405-407.

Snyder, J. D. (1974), "How to Survive a Product Recall," Sales Management, 113, 23-27.

Tamarkin, B. (1978), "Recalls-The Costs Soar," Forbes, 79-80.

Warner, H. W. (1977), "Guidelines for Product Recall," Public Relations Journal, 33, 11-13.

Weinberger, M. to and Dillon, W. R. (1979), "The Effects of Unfavorable Product Rating Information," Proceedings, Association for Consumer Research, Tenth Annual Conference, San Francisco.

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