How executives perceive a negative event is a fundamental component of how organizations respond after a negative event. In this paper, we empirically analyze the differences in the choice of crisis response strategies between acknowledgement and denial from the perspective of organizational executives after a negative report. The results show that SOEs prefer the "deny" strategy, which takes less responsibility, to the "acknowledge" strategy, which takes more responsibility, after a negative report. The study further finds that social status has an opposite effect on the choice of organizational defensive impression management strategies for both SOEs and private enterprises. Specifically, high-social-status SOEs prefer acknowledgement to low-social-status SOEs prefer denial, and high-social-status private enterprises prefer denial to low-social-status private enterprises prefer acknowledgement. The type of negative report plays a negative moderating role on the relationship between social status and strategy choice in SOEs and private enterprises. For high-social status SOEs, they prefer acknowledgement to indefensible negative stories and denial to indefensible stories, while the opposite result is observed for low-social status SOEs. For high-social status private firms, they prefer to deny the negative report when faced with a defensible negative report, and prefer to admit the negative report when faced with an indefensible negative report, while the opposite result is found for low-social status private firms. The findings contribute to the understanding of the differences in the choice of corporate impression management strategies of different controlling shareholders and fill the gap in the research on the differences in organizational behavior after negative reports.

Jie Yang, Qinqin Zhao. An Empirical Study of Crisis Response Strategy Selection Based on Executive Perspective. Academic Journal of Business & Management (2020) Vol. 2, Issue 7: 147-160. https://doi.org/10.25236/AJBM.2020.020717.

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