Effect of Perceived Crisis Response on Consumers' Behavioral Intentions During a Company Scandal

In the context of a multi-national company scandal, namely Volkswagen's Dieselgate, we examine the effect of customers' perception of organizational crisis response on their revenge and avoidance intentions in different cultural settings. Using data collected in the US and in Germany, we are able to show that the perception of appropriate crisis response reduces customers' revenge as well as avoidance intentions. However, due to the domestic bias of German respondents, the mechanism linking perception of the organization's crisis response to the respective outcomes differs between Germany and the US. Our results demonstrate for the first time that domestic bias is not always associated with being an amplifier of positive factors; rather, in the context of an organizational scandal, it dampens the effects of organizational crisis response.