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Crisis Management Strategy in Handling Financial Sector Scandals in the Digital Transformation Era

Author

Listed:
  • Wenjing Wang

    (Zhejiang Business College, Department of Accounting and Financial Management, Hangzhou, Zhejiang Province, China)

  • Arthur S. Guarino

    (Rutgers University, Department of Finance and Economics, Newark, New Jersey, U.S.A)

Abstract

This paper provides empirical evidence of how scandals could affect financial institutions in terms of market stock price, yearly returns, and the length of time it took to regain the public’s trust and ultimately recover in the long run. Moreover, we carefully examine the importance of dealing with crisis management in the digital transformation era’s financial service sector. We specialize in crisis management, which aims to mitigate the destruction of companies’ public crises in existence. Finally, based upon investigating scandals in public and private financial sectors in the United States, we list 21 strategic crisis management plans at the end of the paper to handle financial services sector scandals in the digital transformation era.

Suggested Citation

  • Wenjing Wang & Arthur S. Guarino, 2021. "Crisis Management Strategy in Handling Financial Sector Scandals in the Digital Transformation Era," International Journal of Economics and Financial Research, Academic Research Publishing Group, vol. 7(3), pages 115-131, 09-2021.
    • Handle: RePEc:arp:ijefrr:2021:p:115-131
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    References listed on IDEAS

    as
    1. Regina F. Bento & Lasse Mertins & Lourdes F. White, 2017. "Ideology and the Balanced Scorecard: An Empirical Exploration of the Tension Between Shareholder Value Maximization and Corporate Social Responsibility," Journal of Business Ethics, Springer, vol. 142(4), pages 769-789, June.
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