Negative Blogs, Positive Outcomes: When should Firms Permit Employees to Blog Honestly?
AbstractWeblogs or blogs have recently received a lot of attention, especially in the business community, with a number of firms encouraging their employees to publish blogs to reach out and connect to a wider audience. It is beginning to be recognized that employee blogs can cast a firm in either a positive or a negative light, thereby enhancing or harming the firm’s reputation. Paradoxically, under certain conditions negative postings by employees can actually help the overall reputation of the firm. The rationale for this is that negative posts raise the credibility of an employee blog and attract more readers, who then will also be exposed to the positive posts on the blog. Drawing from the literature on customer advocacy and the stage model theory of information processing in cognitive psychology, we develop a model to decipher the relationship between the extent of negative posts and the overall positive Word of Mouth (WOM) generated by the employee blogs for the firm. An empirical model is developed to account for the inherent non-linearities, endogeneity and unobserved heterogeneity concerns, and potential alternative specifications. Our results suggest that negative posts act as a catalyst to increase the readership of an employee blog, with readership increasing exponentially in the initial stages and then stabilizing. The empirical findings are used to generate an analytical framework that firms can use to formulate employee blogging policies. We illustrate the application of the framework using blogging data from Sun Microsystems.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by NET Institute in its series Working Papers with number 07-32.
Length: 36 pages
Date of creation: Sep 2007
Date of revision: Sep 2007
Contact details of provider:
Web page: http://www.NETinst.org/
blog; employee blogs; bloggers; blogging policies; word-of-mouth; customer advocacy; information processing theory; non-linear models;
Find related papers by JEL classification:
- C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
- C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
- C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
- C80 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - General
- C87 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Econometric Software
- D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
- L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
- M50 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - General
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
This paper has been announced in the following NEP Reports:
You can help add them by filling out this form.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Nicholas Economides).
If references are entirely missing, you can add them using this form.