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Does voluntary disclosure matter when organizations violate stakeholder trust?

Author

Listed:
  • Jurgen Willems

    (University of Hamburg)

  • Lewis Faulk

    (American University)

Abstract

The reputations of nonprofit organizations can be damaged as a result of an organizational scandal, as demonstrated by recent examples of international nonprofit and non-governmental organizations. Common practice and findings from studies using administrative data suggest that nonprofits can reduce the negative effects of scandals by voluntarily disclosing information about the event to stakeholders. This study tests those assumptions in an experimental framework and finds that organizations’ voluntary disclosure of a scandal does not effectively mitigate negative donation intentions following the crisis.

Suggested Citation

  • Jurgen Willems & Lewis Faulk, 2019. "Does voluntary disclosure matter when organizations violate stakeholder trust?," Journal of Behavioral Public Administration, Center for Experimental and Behavioral Public Administration, vol. 2(1).
    • Handle: RePEc:bpd:articl:v:2:y:2019:i:1:jbpa.21.45
    DOI: 10.30636/jbpa.21.45
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    References listed on IDEAS

    as
    1. Diarmuid McDonnell & Alasdair C. Rutherford, 2019. "Promoting charity accountability: understanding disclosure of serious incidents," Accounting Forum, Taylor & Francis Journals, vol. 43(1), pages 42-61, January.
    2. Stephan Grimmelikhuijsen & Femke de Vries & Wilte Zijlstra, 2018. "Breaking bad news without breaking trust: The effects of a press release and newspaper coverage on perceived trustworthiness," Journal of Behavioral Public Administration, Center for Experimental and Behavioral Public Administration, vol. 1(1).
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    4. Simon Lloyd D. Restubog & Matthew J. Hornsey & Prashant Bordia & Sarah R. Esposo, 2008. "Effects of Psychological Contract Breach on Organizational Citizenship Behaviour: Insights from the Group Value Model," Journal of Management Studies, Wiley Blackwell, vol. 45(8), pages 1377-1400, December.
    5. Willems, Jurgen & Waldner, Carolin, 2019. "Reputation Management for Nonprofit Organizations," OSF Preprints wj2ep, Center for Open Science.
    6. Yuri Mishina & Emily S. Block & Michael J. Mannor, 2012. "The path dependence of organizational reputation: how social judgment influences assessments of capability and character," Strategic Management Journal, Wiley Blackwell, vol. 33(5), pages 459-477, May.
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    More about this item

    Keywords

    Voluntary disclosure; Crisis; Reputation; Nonprofit; Stakeholders;
    All these keywords.

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • Z00 - Other Special Topics - - General - - - General
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General

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