IDEAS home Printed from https://ideas.repec.org/a/spr/elmark/v31y2021i4d10.1007_s12525-021-00490-3.html
   My bibliography  Save this article

What to do after a data breach? Examining apology and compensation as response strategies for health service providers

Author

Listed:
  • Kristin Masuch

    (University of Goettingen)

  • Maike Greve

    (University of Goettingen)

  • Simon Trang

    (University of Goettingen)

Abstract

Innovative IT-enabled health services promise tremendous benefits for customers and service providers alike. Simultaneously, health services by nature process sensitive customer information, and data breaches have become an everyday phenomenon. The challenge that health service providers face is to find effective recovery strategies after data breaches to retain customer trust and loyalty. We theorize and investigate how two widely applied recovery actions (namely apology and compensation) affect customer reactions after a data breach in the specific context of fitness trackers. Drawing on expectation confirmation theory, we argue that the recovery actions derived from practice, apology, and compensation address the assimilation-contrast model’s tolerance range and, thus, always lead to satisfaction with the recovery strategy, which positively influences customers’ behavior. We employ an experimental investigation and collect data from fitness tracker users during a running event. In the end, we found substantial support for our research model. Health service providers should determine specific customer expectations and align their data breach recovery strategies accordingly.

Suggested Citation

  • Kristin Masuch & Maike Greve & Simon Trang, 2021. "What to do after a data breach? Examining apology and compensation as response strategies for health service providers," Electronic Markets, Springer;IIM University of St. Gallen, vol. 31(4), pages 829-848, December.
    • Handle: RePEc:spr:elmark:v:31:y:2021:i:4:d:10.1007_s12525-021-00490-3
    DOI: 10.1007/s12525-021-00490-3
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s12525-021-00490-3
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s12525-021-00490-3?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Rosati, Pierangelo & Cummins, Mark & Deeney, Peter & Gogolin, Fabian & van der Werff, Lisa & Lynn, Theo, 2017. "The effect of data breach announcements beyond the stock price: Empirical evidence on market activity," International Review of Financial Analysis, Elsevier, vol. 49(C), pages 146-154.
    2. Eugene W. Anderson & Mary W. Sullivan, 1993. "The Antecedents and Consequences of Customer Satisfaction for Firms," Marketing Science, INFORMS, vol. 12(2), pages 125-143.
    3. Seung Hyun Kim & Juhee Kwon, 2019. "How Do EHRs and a Meaningful Use Initiative Affect Breaches of Patient Information?," Information Systems Research, INFORMS, vol. 30(4), pages 1184-1202, December.
    4. Sasha Romanosky & David Hoffman & Alessandro Acquisti, 2014. "Empirical Analysis of Data Breach Litigation," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 11(1), pages 74-104, March.
    5. Myung Ko & Kweku-Muata Osei-Bryson & Carlos Dorantes, 2009. "Investigating the Impact of Publicly Announced Information Security Breaches on Three Performance Indicators of the Breached Firms," Information Resources Management Journal (IRMJ), IGI Global, vol. 22(2), pages 1-21, April.
    6. Susan A. Brown & Viswanath Venkatesh & Sandeep Goyal, 2012. "Expectation Confirmation in Technology Use," Information Systems Research, INFORMS, vol. 23(2), pages 474-487, June.
    7. Kevin M. Gatzlaff & Kathleen A. McCullough, 2010. "The Effect of Data Breaches on Shareholder Wealth," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 13(1), pages 61-83, March.
    8. Paul W. Fombelle & Sterling A. Bone & Katherine N. Lemon, 2016. "Responding to the 98%: face-enhancing strategies for dealing with rejected customer ideas," Journal of the Academy of Marketing Science, Springer, vol. 44(6), pages 685-706, November.
    9. Rosati, Pierangelo & Deeney, Peter & Cummins, Mark & van der Werff, Lisa & Lynn, Theo, 2019. "Social media and stock price reaction to data breach announcements: Evidence from US listed companies," Research in International Business and Finance, Elsevier, vol. 47(C), pages 458-469.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Edith Maier & Ulrich Reimer & Nilmini Wickramasinghe, 2021. "Digital healthcare services," Electronic Markets, Springer;IIM University of St. Gallen, vol. 31(4), pages 743-746, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Syed Emad Azhar Ali & Fong-Woon Lai & Rohail Hassan & Muhammad Kashif Shad, 2021. "The Long-Run Impact of Information Security Breach Announcements on Investors’ Confidence: The Context of Efficient Market Hypothesis," Sustainability, MDPI, vol. 13(3), pages 1-27, January.
    2. Michael McShane & Trung Nguyen, 2020. "Time-varying effects of cyberattacks on firm value," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 45(4), pages 580-615, October.
    3. Shinichi Kamiya & Jun-Koo Kang & Jungmin Kim & Andreas Milidonis & René M. Stulz, 2018. "What is the Impact of Successful Cyberattacks on Target Firms?," NBER Working Papers 24409, National Bureau of Economic Research, Inc.
    4. Emmanuel W. Ayaburi & Jaeung Lee & Michele Maasberg, 0. "Understanding Crowdsourcing Contest Fitness Strategic Decision Factors and Performance: An Expectation-Confirmation Theory Perspective," Information Systems Frontiers, Springer, vol. 0, pages 1-14.
    5. Nancy K. Lankton & D. Harrison McKnight & Ryan T. Wright & Jason Bennett Thatcher, 2016. "Research Note—Using Expectation Disconfirmation Theory and Polynomial Modeling to Understand Trust in Technology," Information Systems Research, INFORMS, vol. 27(1), pages 197-213, March.
    6. Sepideh Ebrahimi & Kamran Eshghi, 2022. "A meta-analysis of the factors influencing the impact of security breach announcements on stock returns of firms," Electronic Markets, Springer;IIM University of St. Gallen, vol. 32(4), pages 2357-2380, December.
    7. Rosati, Pierangelo & Cummins, Mark & Deeney, Peter & Gogolin, Fabian & van der Werff, Lisa & Lynn, Theo, 2017. "The effect of data breach announcements beyond the stock price: Empirical evidence on market activity," International Review of Financial Analysis, Elsevier, vol. 49(C), pages 146-154.
    8. Iyer, Subramanian R. & Simkins, Betty J. & Wang, Heng, 2020. "Cyberattacks and impact on bond valuation," Finance Research Letters, Elsevier, vol. 33(C).
    9. Rosati, Pierangelo & Deeney, Peter & Cummins, Mark & van der Werff, Lisa & Lynn, Theo, 2019. "Social media and stock price reaction to data breach announcements: Evidence from US listed companies," Research in International Business and Finance, Elsevier, vol. 47(C), pages 458-469.
    10. Foecking, Nico & Wang, Mei & Huynh, Toan Luu Duc, 2021. "How do investors react to the data breaches news? Empirical evidence from Facebook Inc. during the years 2016–2019," Technology in Society, Elsevier, vol. 67(C).
    11. Jens Foerderer & Sebastian W. Schuetz, 2022. "Data Breach Announcements and Stock Market Reactions: A Matter of Timing?," Management Science, INFORMS, vol. 68(10), pages 7298-7322, October.
    12. Michael McShane & Trung Nguyen, 0. "Time-varying effects of cyberattacks on firm value," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 0, pages 1-36.
    13. Emmanuel W. Ayaburi & Jaeung Lee & Michele Maasberg, 2020. "Understanding Crowdsourcing Contest Fitness Strategic Decision Factors and Performance: An Expectation-Confirmation Theory Perspective," Information Systems Frontiers, Springer, vol. 22(5), pages 1227-1240, October.
    14. Philipp Afèche & Mojtaba Araghi & Opher Baron, 2017. "Customer Acquisition, Retention, and Service Access Quality: Optimal Advertising, Capacity Level, and Capacity Allocation," Manufacturing & Service Operations Management, INFORMS, vol. 19(4), pages 674-691, October.
    15. Angulo-Ruiz, Fernando & Pergelova, Albena & Cheben, Juraj & Angulo-Altamirano, Eladio, 2016. "A cross-country study of marketing effectiveness in high-credence services," Journal of Business Research, Elsevier, vol. 69(9), pages 3636-3644.
    16. Andreas Herrmann & Michael D. Johnson, 1999. "Die Kundenzufriedenheit als Bestimmungsfaktor der Kundenbindung," Schmalenbach Journal of Business Research, Springer, vol. 51(6), pages 579-598, June.
    17. Yeung, Matthew C.H. & Ramasamy, Bala & Chen, Junsong & Paliwoda, Stan, 2013. "Customer satisfaction and consumer expenditure in selected European countries," International Journal of Research in Marketing, Elsevier, vol. 30(4), pages 406-416.
    18. Vishal Gaur & Young-Hoon Park, 2007. "Asymmetric Consumer Learning and Inventory Competition," Management Science, INFORMS, vol. 53(2), pages 227-240, February.
    19. Yanlong Guo & Jiaying Yu & Han Zhang & Zuoqing Jiang, 2022. "A Study on Cultural Context Perception in Huizhou Cultural and Ecological Reserve Based on Multi-Criteria Decision Analysis," Sustainability, MDPI, vol. 14(24), pages 1-20, December.
    20. Brady, Michael K. & Robertson, Christopher J. & Cronin, J. Joseph, 2001. "Managing behavioral intentions in diverse cultural environments: an investigation of service quality, service value, and satisfaction for American and Ecuadorian fast-food customers," Journal of International Management, Elsevier, vol. 7(2), pages 129-149.

    More about this item

    Keywords

    Health data breach recovery action; Data breach response strategies; Compensation; Apology; Expectation confirmation theory; Assimilation-contrast model;
    All these keywords.

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:elmark:v:31:y:2021:i:4:d:10.1007_s12525-021-00490-3. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.