Crisis Management for Sustainable Corporate Value: Finding a Construal Fit between Social Distance, Crisis Response, and Crisis Severity

Abstract

Despite growing research on public attributions of crisis responsibility, little is known about the role of perceived social distance to organizations in conjunction with crisis severity and crisis response strategies. Applying construal level theory (CLT) to the crisis communication context, we examined the role of the construal fit between social distance, crisis severity, and crisis response strategy in determining crisis responsibility, negative word-of-mouth (WOM) intentions, and anger. A two (social distance to a crisis: close vs. distant) × two (crisis response strategy: defensive vs. accommodating) × two (crisis severity: low vs. high) between-subjects experiment revealed two interaction effects: (1) the interaction effect of social distance and crisis response strategy on anger and negative WOM and (2) the interaction effect of social distance and crisis severity on negative WOM. No interaction effects emerged with respect to crisis responsibility. We discuss the theoretical contribution of this study’s results—namely, how social distance to a crisis impacts public reactions to crisis response strategies. We also outline the practical implications for achieving a better construal fit between social distance and crisis response strategy for effective crisis communication, which may serve as an opportunity for sustainable corporate management.

1. Introduction

Previous crisis communication research has focused primarily on the effects of different corporate crisis response strategies from corporations’ perspectives [1,2,3]. More recently, there has been a growing body of research investigating the underlying mechanisms in the public’s perception processes in corporate crisis contexts. Applying the psychological reactance theory to crisis communication, researchers have examined the role of consumers’ reactance to the explicit persuasive tactics of crisis response strategies, gaining insights into crisis communication’s unintended effects [4]. Focusing on personalized communication, Denner and colleagues [5] highlighted the role of public perception processes in crisis communication, such as how perceived appropriateness varies depending on the types of crisis responses initiated by the leader or a spokesperson.

Understanding the public’s thoughts in a given crisis, including their perceptions and interpretations of organizations’ crisis responses, can offer useful insights into the ongoing discussion of public-centered approaches for crisis communication. Accordingly, this research considers public interpretations of a company’s crisis response strategy while accounting for perceived distance to a crisis. Public attitudes and behaviors can change due to the construal process based on psychological distance [6]. The public may interpret a corporate crisis based on the interplay between social distance (i.e., their subjective perception of whether the crisis is close to or far away from them) and situational variables such as crisis response strategy and crisis severity.

From a corporate strategy perspective, Burnett [7] has argued that crisis management should be considered a strategic action designed to avoid or mitigate undesirable developments and to bring about a desirable resolution to the problems. It is essential to manage crisis communication to mitigate the potentially negative and undesirable outcomes of a crisis for an organization, such as financial loss and reputational damage [8]. For example, the Facebook–Cambridge Analytica data scandal heightened public concerns over the misuse of personal data and raised questions about whether such data were used to influence elections, including the 2016 U.S. presidential election [9]. Public trust in Facebook declined by 66% compared to the previous year after the company’s entanglement with the British political data firm Cambridge Analytica, according to a survey by the Ponemon Institute, an independent research firm specializing in privacy and data protection [10].

However, the survey results showed that the data scandal probably did not affect individuals’ behavior despite their concerns about privacy. For example, one of the survey respondents mentioned, “I am very disappointed in Facebook, but I’m willing to give the company a second chance” (p. 12). One perspective that can explain this phenomenon is construal level theory (CLT), which holds that individuals tend to account for the situation when evaluating proximal transgressions compared to distal transgressions [6].

Psychologically close events are represented as more detailed, contextualized, and specific because the distance to the events changes the way that individuals construe them. Individuals tend to incorporate situational factors when they evaluate proximal events. In contrast, psychologically distant events are represented as more schematic, decontextualized, and abstract. Evaluations of distal events are, therefore, less context-dependent because individuals focus on the actor’s abstract and stable characteristics (i.e., dispositional factors).

This study aims to extend the growing body of crisis communication research, focusing particularly on the role of public perceptions during a crisis. Instead of simply accepting crisis communication messages, consumers tend to infer an underlying persuasive motive behind the corporate strategy, considering situational factors [11]. Applying CLT to the context of corporate crises, the purpose of this study is to examine the theoretical link between individuals’ perceived social distance to a crisis and their perceptual and behavioral reactions to corporate crisis response strategies. Using Situational Crisis Communication Theory (SCCT) as a framework, this study examines how the public reacts to different crisis response strategies based on their social distance to crises with varying levels of severity. Although SCCT as a well-established theoretical framework in crisis communication reflects the importance of audience-oriented approaches by focusing on the public’s attribution of crisis responsibility and matching crisis response strategies [2,12], it is meaningful to explore how these perceptions and judgments are determined by levels of construal.

Crisis response strategies may be ineffective if they fail to appeal to both the hearts and minds of the public; therefore, addressing emotions and behavioral intentions is essential from a public-centered perspective. According to Coombs and Holladay [13], “the emotions generated by crisis will help crisis managers know when accommodative strategies are required and to better justify the use of these more expensive communication strategies” (p. 267). Thus, understanding public expectations and reactions to a crisis can be critical for crisis managers’ understanding of how their crisis response choices will facilitate or hinder public acceptance of organizational crisis responses [14]. In exploring this issue, we expect to contribute to the crisis communication literature in two ways. First, we expect to reveal how the construal fit between the public’s perceived social distance to a crisis and crisis-related variables affects attributions of crisis responsibility, negative WOM, and anger. Second, we suggest correspondence bias as an underlying mechanism that explains the relationship between construal fit and these three variables. By highlighting the effect of construal fit, this study’s results illuminate the public’s perception processes, not only expanding the crisis communication literature but also suggesting more effective strategies for crisis managers.

2. Literature Review

2.1. SCCT, Correspondence Bias, and CLT

The Situational Crisis Communication Theory (SCCT) [12] has been employed to develop and test effective crisis response strategies. The theory suggests that different types of crises call for different response strategies [8]. According to SCCT, corporations should respond strategically to a crisis based on public attributions of organizational responsibility for the crisis. Publics attribute more blame and responsibility to an organization if they perceive a crisis as intentional rather than unintentional [1,2,15]. SCCT emphasizes matching crisis types (i.e., victim, accidental, and preventable) with proper response strategies to best protect organizations’ reputational assets [8]. Specifically, denial crisis strategies work better when the organization is a victim (e.g., natural disasters or product tampering); diminishing crisis strategies are relevant to accidental crises (e.g., technical errors); and rebuilding strategies are best for preventable crises (e.g., human error or organizational misdeeds). Choosing the appropriate response strategies based on the crisis type minimizes corporate responsibility or blame for the crisis while also maintaining the organization’s reputation [16].

The framework of SCCT is therefore largely based on attribution theory [17], as it emphasizes carefully crafted crisis responses based on the public’s attribution of the crisis either to the company or to other entities and situational factors. The more the public thinks that the crisis has been caused by a company (vs. by other factors), the more accommodative the public expects the company’s crisis response to be. According to attribution theory, observers want to determine the cause of an actor’s behavior, so they can understand it and know what to expect when the same behavior repeatedly occurs [18]. Individuals attribute the cause of the actor’s behavior to either situational or dispositional factors [19].

Studies have shown that individuals tend to explain their own behaviors with situational factors and others’ behaviors with dispositional factors (for a review, see [20]). This tendency to make dispositional causal attributions to others’ behavior while attributing one’s own actions to external (situational) causes is called correspondence bias. Correspondence bias occurs because individuals tend to ascribe unwarranted causality to others’ actions due to their noticeable or salient traits [21]. In other words, individuals “overestimate the importance of personal or dispositional factors relative to environmental influences” when evaluating others’ actions (p. 184) [18] because actors’ dispositional properties are more stable, salient, and accessible (for a review, see [20]).

Construal level theory (CLT) further explains the mechanism behind correspondence bias. CLT holds that psychological distance systematically changes how an event is mentally construed [22,23,24], and “the self” in the “here and now” is the reference point for psychological distance [23]. According to CLT, individuals construe events at different levels, ranging from the concrete to the abstract. Specifically, psychologically distant events are construed in abstract terms, whereas proximal events are construed in a more detailed, contextual manner [22,23,25]. This is because individuals mentally construe physically or socially distant objects, situations, and hypothetical events using abstract representations (high-level construals); in contrast, individuals construe close and probable events concretely (low-level construals) [23,26]. The tendency to make high-level dispositional attributions becomes stronger as psychological distance (including temporal, physical, and social distance) from the behavior increases [27,28]. Perceivers tend to use more abstract representations (higher-level construals) to explain individuals and events when they are psychologically distant from (vs. close to) themselves [29].

2.2. Application of CLT in Crisis Communication

Based on CLT and its attributional mechanism connected to correspondence bias, we argue that when individuals are exposed to a socially close crisis, they tend to focus on contextualized representations that include subordinate and incidental details about the crisis [22,23,25]. In contrast, when exposed to a socially distant crisis, individuals ignore such details because they are more likely to construe the situation in a more schematic and decontextualized fashion.

As an example, Agerström et al. [30] found that a third-person (vs. first-person) visual perspective led to harsher judgments, and this influence was partially explained by different levels of mental construal. According to Eyal et al. [6], moral judgment is affected by psychological distance; moral transgressions are judged more harshly when acts are temporally and socially distant (vs. proximate). Instead of considering situation-specific factors, individuals tend to apply moral principles to distant situations [6]. Studying the moral double-standards perspective on hypocrisy (judging others’ immoral actions more harshly than one’s own), Lammers [31] found that having an abstract construal mindset is associated with increased moral hypocrisy.

These previous studies on CLT [6,30,31] demonstrate that individuals judge moral transgressions more harshly when they activate higher (vs. lower) construal due to distant (vs. proximate) psychological distance’s influence on moral principles. For socially proximate events, individuals consider the more concrete and contextualized aspects of the event, which enables them to adjust their moral principle-based judgment. As individuals consider various contextual and situational factors in a socially proximate crisis, including the company’s explanation of why the crisis has occurred and how they are addressing it, they will evaluate the company’s crisis response differently. For a socially distant corporate crisis, individuals pay less attention to details and context (i.e., how the company is handling the crisis) and are more likely to focus on the company’s dispositional characteristics (e.g., the company’s unethical nature); thus, ignoring the context could lead to more negative evaluations.

Based on the CLT literature, we argue that a socially close crisis activates low-level construal, making individuals pay more attention to the details of its crisis, and we consider crisis response and crisis severity as frequently utilized crisis information [8], and as critical situational information provided by the company and the media.

To examine the value of crisis response strategies in protecting organizational reputation, crisis communication scholars have investigated the effects of various strategies on public responses, such as perceptions of organizational responsibility and behavioral intentions to purchase products or spread word-of-mouth (e.g., [1,2,16,32,33]). While organizations must determine how much responsibility they bear for a crisis, crisis responsibility and crisis severity eventually lie in the hands of their key stakeholders, regardless of the crisis’s actual responsibility or severity [34]. In addition to public perceptions of crisis responsibility, negative word-of-mouth may increasingly threaten an organization, especially because social media complements traditional media as a source of crisis information [35,36].

An organization must implement effective response strategies to mitigate a crisis’s negative impact. According to Coombs and Holladay [13], crisis response strategies can be classified based on how much they express an organization’s acceptance of responsibility for the crisis and concern for the affected stakeholders. The objective of crisis response strategies is to protect organizational reputation by (1) shaping attributions of the crisis, (2) changing perceptions of the organization in crisis, and (3) minimizing the crisis’s negative impact [33]. An accommodative crisis response garners more positive reactions from the public compared to a defensive crisis response [3,8], and crisis management studies have shown the value of an apology for a crisis [37,38].

Crisis communication literature suggests that accommodating crisis response is viewed more positively compared to defensive crisis response to recover the organization’s reputation [39,40,41], although companies end up choosing the latter due to limited resources or a fear of negative collateral consequences of being accommodative such as a lawsuit [8,42]. We posited that, despite the stakeholder’s perceived inappropriateness of defensive response strategies, the two types of crisis response might not create a significant difference in evaluation when the crisis is construed as high-level.

Building on CLT, we examine how different levels of social distance to a crisis interact with corporate crisis responses and crisis severity, thus offering insights into the utilization of effective crisis management and organizational learning, focusing on how the organization can support sustainable corporate value by maintaining a credible reputation in the eyes of its stakeholders throughout the crisis.

Individuals are more sensitive to crisis response messages when the crisis is socially close because they are oriented to low-level construal and therefore pay attention to detailed and contextualized crisis information. Therefore, we posit that individuals will give more careful attention to crisis response and therefore evaluate defensive and accommodative crisis responses differently when the responses are about a socially close crisis due to low-level construal. For a socially distant crisis, individuals’ evaluations of the crisis will not differ based on defensive or accommodative crisis responses, as dispositional characteristics trump situational factors. Only moral principles will be applied in evaluating the distant crisis discounting detailed and contextualized crisis information. Thus, we proposed the following hypotheses:

H1. 

In a socially close crisis, a defensive response strategy will lead to more crisis responsibility perception compared to an accommodating response strategy; however, there will be no such difference in a socially distant crisis.

H2. 

In a socially close crisis, a defensive response strategy will lead to more negative WOM compared to an accommodating response strategy; however, there will be no such difference in a socially distant crisis.

Growing attention has been paid to the role of emotions in addition to perceptions of crisis responsibility in the crisis communication literature. According to Coombs and Holladay [13,43], a crisis can generate negative emotions such as anger and schadenfreude (i.e., taking joy in the pain of others) and positive emotions such as sympathy. These crisis-induced emotions impact organizational reputation during crises, and they may shape attitudes and behaviors toward the organization in crisis [13,43].

Extending the findings on SCCT, studies have examined how different crisis response strategies and the attribution of responsibility for the crisis affect the public’s emotions [44,45,46]. As individuals experience emotions that vary depending on their involvement with the crisis [1], their perceived involvement may potentially strengthen emotions elicited by a crisis [47]. Individuals experience different emotions based on the type of crisis, such as feeling angry in a controllable and predictable crisis and feeling frightened in an unpredictable and uncontrollable crisis [48]. Particularly, anger is a highly relevant emotion in crisis management because it is active and can encourage behaviors such as boycotts [44]. These findings show that individuals process crisis information cognitively based on various crisis-related variables, which also generate certain emotions.

As Coombs and Holladay have suggested [43], crisis-related anger generates negative word-of-mouth and weakens purchase intentions; thus, understanding and addressing anger is essential for successful crisis management. Moreover, examining key crisis-induced emotions such as anger in terms of construal level could provide new insights for crisis communication research.

Regarding the role of emotion in crisis communication, particularly anger as an outcome of a crisis response strategy, we argue that individuals are likely to exhibit different degrees of anger as a function of crisis response strategies in combination with their perceived social distance to the crisis. When individuals face a socially proximate crisis, they tend to exhibit low-level construal; accordingly, they pay more attention to the contextualized crisis information (i.e., corporate responses) and are more likely to experience anger when encountering defensive (vs. accommodative) responses. When individuals face a socially distant crisis, however, they are less likely to pay attention to corporate crisis responses; accordingly, no significant difference in emotions would occur based on these responses. In other words, we predict that individuals will react to defensive and accommodative crisis responses differently only when the crisis is socially proximate:

H3. 

In a socially close crisis, a defensive response strategy will lead to more anger compared to an accommodating response strategy; however, there will be no such difference in a socially distant crisis.

Coombs and Holladay [12] define crisis severity as “the amount of damage generated by a crisis including financial, human, and environmental damage” (p. 169), and they state that perceptions of a crisis’s severity can ultimately determine the degree of reputational threat to the organization. Coombs [8] has argued that crisis damage (in terms of property damage and related injuries) should be assessed when responding to a crisis, as his original study in 1998 showed a high correlation between the level of damage caused by a crisis and attributions of companies’ responsibility for the crisis. More recently, Claeys and colleagues showed that the more severe individuals perceive a crisis to be, the more negatively they perceive the company’s reputation [49]. Although crisis severity information itself can be neutral, it can lead to negative emotions because it is likely that individuals will appraise the situation and its magnitude based on its severity. Thus, we argue that perceptions of crisis severity can serve as a cue for stakeholders to interpret the given crisis. With this in mind, we propose the following research question:

RQ. 

How does perceived crisis severity moderate the effect of social distance to a crisis on (a) perceived crisis responsibility, (b) negative WOM, and (c) anger?

3. Method

3.1. Experimental Design and Procedure

This study employed a 2 (social distance to a crisis: close vs. distant) × 2 (crisis response strategy: accommodating vs. defensive) × 2 (crisis severity: high vs. low) between-subjects experimental design. Participants were randomly assigned to one of the eight experimental conditions. Each participant read two news stories. In the first phase, each participant read a news story about a data incident that happened either in a business-to-business (B2B) or a business-to-consumer (B2C) company. In the second phase, each participant read a news story that provided further information about the data incident: how the company responded to the crisis and how severe the crisis was. After reading the second news story, participants completed items assessing their perceptions of responsibility for the crisis, negative WOM intentions, and anger. Demographic information was collected at the end. All procedures took place on Qualtrics.

3.2. Participants

We recruited a general adult sample using Amazon Mechanical Turk (MTurk), an online marketplace where individuals sign up to participate in online surveys and receive a small amount of monetary compensation. Given that important stakeholders in corporate crises are more often found in the general population than among college students, we assumed that a sample from MTurk would yield greater real-world generalizability than would a college student sample. All participants were given monetary compensation in exchange for their participation.

A total of 192 U.S. adults participated in the online survey. Gender was balanced (male: n = 97, 50.5%; female: n = 95, 49.5%). Participant ages ranged from 24 to 72 years (M_age = 39.83, SD = 10.48). Most participants were Caucasian (n = 150, 78.1%), followed by Asian American (n = 14, 7.2%), African American (n = 11, 5.7%), Hispanic American (n = 8, 4.2%), and other (n = 14, 7.2%).

3.3. Stimuli

News stories were designed to manipulate social distance to a crisis (close vs. distant), crisis response strategy (accommodating vs. defensive), and crisis severity (high vs. low). All stories assumed an online news article format and included a headline, byline, date, and body.

For the close social distance condition, the news story described a business-to-consumer (B2C) company data incident in which the company was accused of disclosing some customers’ confidential information to an unknown third-party agency. For the distant social distance condition, the news story described a business-to-business (B2B) company data incident in which the company was accused of revealing one of its clients’ sensitive data to another client. We used fictitious company names to prevent any confounding effects on participants’ previous experience or knowledge. For the accommodating crisis response strategy, the news story was written such that the company claimed full responsibility and apologized for revealing the sensitive data. For the defensive crisis response strategy, the news story was written such that the respective company denied responsibility for revealing the sensitive data and blamed the leak on a system glitch. For the high crisis severity condition, the story reported “severe financial loss” from the crisis exceeding USD 10 million for the company. For the low crisis severity condition, the story reported “no financial damage” to the company.

3.4. Measures

Social distance to a crisis. Three items assessed whether the manipulation of social distance to a crisis was successful [50]: (1) “The information about the data incident is very important to me,” (2) “The data incident of this company matters a great deal to me,” and (3) “The data incident of this company is very relevant to me” (Cronbach’s α = 0.963). The items utilized a 7-point response scale ranging from 1 (strongly disagree) to 7 (strongly agree).

Crisis response strategy. Five items assessed whether the crisis response strategy manipulation was successful. The first four were newly created, and the last item was adopted from Turk et al. [51]. The newly created items included (1) “The company seems to apologize for the data incident,” (2) “The company seems to take responsibility for the data incident,” (3) “The company seems to blame a system glitch for the data incident (reversed),” and (4) “The company seems to deny responsibility for the data incident (reversed).” The items utilized a 7-point response scale ranging from 1 (strongly disagree) to 7 (strongly agree). The last item asked participants to indicate the extent to which they thought that the company’s response was defensive or accommodative, with this response scale also ranging from 1 (defensive) to 7 (accommodative; Cronbach’s α = 0.90).

Perceptions of crisis severity. Two items [32] assessed whether the crisis severity manipulation was successful. Participants rated the extent to which they thought that the outcome of the data incident was very serious, using a 7-point response scale ranging from 1 (strongly disagree) to 7 (strongly agree); they also indicated how damaging they thought that the data incident was on a scale ranging from 1 (not at all damaging) to 7 (extremely damaging; Cronbach’s α = 0.90).

Perceptions of crisis responsibility. We measured perceptions of crisis responsibility with two items using 7-point response scales adopted from Lee [52]. Participants indicated the extent to which the company (a) should bear responsibility for the crisis (1 = not at all responsible, 7 = totally responsible) and (b) should be blamed for the crisis (1 = not at all to be blamed, 7 = absolutely to be blamed; Cronbach’s α = 0.90).

Negative WOM intentions. To assess negative WOM intentions, we adopted three items from Coombs and Holladay [43] and Xiao et al. [53]: (1) “I would say negative things about the company to other individuals,” (2) “I would complain to my friends and relatives about this brand,” and (3) “I would not recommend the company to someone who asked my advice” (Cronbach’s α = 0.72). The items utilized a 7-point response scale ranging from 1 (strongly disagree) to 7 (strongly agree).

Anger. We measured anger using two items adopted from Dillard et al. [54]. Participants rated their agreement with the following statements on a 7-point scale ranging from 1 (strongly disagree) to 7 (strongly agree): (1) “I feel angry toward the company” and (2) “I am resentful at the way the company responded to the data incident” (Cronbach’s α = 0.92).

4. Results

4.1. Manipulation Checks

We conducted three analyses of variance (ANOVAs) to check whether each manipulation was successful. Participants in the socially distant condition rated the crisis as more socially distant compared to those in the socially close condition [F (1, 190) = 58.26, p < 0.001; M_distant = 3.47, SD = 1.36; M_close = 5.04, SD = 1.51]. Participants in the defensive crisis response strategy condition rated the company’s response as more defensive compared to those in the accommodating crisis response strategy condition [F (1, 190) = 510.74, p < 0.001; M_defensive = 1.72, SD = 0.90; M_{accommodating} = 4.80, SD = 1.00]. Participants in the severe crisis condition rated the crisis as more severe compared to those in the less severe crisis condition [F (1, 190) = 55.52, p < 0.001; M_high = 6.23, SD = 0.95; M_low = 4.84, SD = 1.55]. Therefore, all three experimental manipulations were successful.

4.2. Hypothesis Testing

Before examining the proposed hypotheses and RQ, we checked if there was a three-way interaction between social distance, crisis response, and crisis severity. The result revealed no significant three-way interactions on crisis responsibility [F (1, 184) = 0.185; p = 0.668], WOM intentions [F (1, 184) = 0.069; p = 0.793], or anger [F (1, 184) = 0.007; p = 0.932]. Upon the results, we moved to test two-way interaction effects.

H1 predicted a two-way interaction effect between social distance and crisis response strategy on crisis responsibility. However, the results showed no significant interaction effect on crisis responsibility [F (1, 184) = 0.763; p = 0.384]. There was no difference in crisis responsibility perception between defensive and accommodating response strategies for either a socially distant crisis or a socially close crisis. Thus, H1 was not supported.

H2 predicted a two-way interaction effect between social distance and crisis response strategy on negative WOM intentions. As shown in Figure 1, the results did indeed reveal a significant interaction effect on negative WOM intentions [F (1, 184) = 4.10, p = 0.045, par. η² = 0.02]. As

Table 1. Two-way interaction effects between social distance and crisis response strategy on public responses (negative WOM intention and Anger).

	Socially Close		Socially Distant
	Accommodating (n = 47)	Defensive (n = 47)	Accommodating (n = 49)	Defensive (n = 49)	F	df	p	par. η2
Negative WOM	3.62 (1.43)	4.80 (1.40)	3.85 (1.46)	4.20 (1.61)	4.10	1	0.045	0.02
Anger	3.22 (1.73)	4.54 (1.87)	3.63 (1.65)	4.06 (1.90)	2.98	1	0.086	0.02

shows, if a crisis was socially close, participants reported greater negative WOM intentions in response to a defensive response strategy compared to an accommodating response strategy (defensive: M = 4.80, SD = 1.40; accommodating: M = 3.62, SD = 1.43; p < 0.001). There was no difference in negative WOM intentions between defensive and accommodating response strategies if a crisis was socially distant (defensive: M = 4.20, SD = 1.61; accommodating: M = 3.85, SD = 1.46; p = 0.281). Therefore, H2 was supported.

H3 predicted a two-way interaction effect between social distance and crisis response strategy on anger. As demonstrated in Figure 2, the results showed a marginally significant interaction effect on anger [F (1, 184) = 2.98, p = 0.086, par. η² = 0.02]. As Table 1 shows, if a crisis was socially close, participants reported greater anger in response to a defensive response strategy compared to an accommodating response strategy (defensive: M = 4.54, SD = 1.87; accommodating: M = 3.22, SD = 1.73; p < 0.001). There was no difference in negative WOM intentions between defensive and accommodating response strategies if a crisis was socially distant (defensive: M = 4.06, SD = 1.90; accommodating: M = 3.63, SD = 1.65; p = 0.265). Therefore, H3 was supported.

The RQ asked how crisis severity perception moderates the effect of social distance to a crisis on (a) crisis responsibility, (b) negative WOM intentions, and (c) anger. The results showed no significant interaction effect between social distance and crisis severity on crisis responsibility [F (1, 184) = 0.183, p = 0.669] or on anger [F (1, 184) = 2.18, p = 0.142]. However, as shown in Figure 3, there was a significant interaction effect between social distance and crisis severity on negative WOM intentions [F (1, 184) = 4.66, p = 0.032, par. η² = 0.03]. As

Table 2. Two-way interaction effects between social distance and crisis severity on negative WOM intention.

	Socially Close		Socially Distant
	Low Severity (n = 50)	High Severity (n = 44)	Low Severity (n = 51)	High Severity (n = 47)	F	df	p	par. η2
Negative WOM	4.35 (1.54)	4.08 (1.53)	3.71 (1.45)	4.36 (1.56)	4.66	1	0.032	0.03

shows, if a crisis was socially distant, participants reported greater negative WOM intentions in response to a very severe crisis compared to a less severe crisis (high severity: M = 4.36, SD = 1.56; low severity: M = 3.71, SD = 1.45; p = 0.030). Additionally, in the low crisis severity condition, negative WOM intentions were significantly higher with respect to a socially close crisis (M = 4.35, SD = 1.54) compared to a socially distant crisis (M = 3.71, SD = 1.45; p = 0.031). However, there was no difference in WOM intentions between high and low crisis severity levels if a crisis was socially close (high severity: M = 4.08, SD = 1.53; low severity: M = 4.35, SD = 1.54; p = 0.382).

5. Discussion

Applying CLT to the crisis communication context, we investigated the impact of social distance from a crisis at the cognitive, affective, and behavioral levels. More specifically, the study examined the mechanism underlying the relationships between social distance, crisis response strategy, and crisis severity to determine how the public perceives a company as responsible for a crisis, feels angry toward the company, and intends to spread negative WOM about the crisis. According to CLT, individuals construe the same event in different ways, offering a framework linking construal levels to public interpretations of crises. Moving beyond research that has focused on the strategic stance and messages that companies should adopt, CLT combined with an SCCT framework provides a new perspective to explain how the public’s interpretation of crisis response and severity may be affected by their mental construal of a particular crisis based on social distance.

This study examined two different two-way interaction effects—(1) social distance and crisis response strategy and (2) social distance and crisis severity—on crisis responsibility, anger, and negative WOM intentions. The first two-way interaction effect was significant with respect to anger and negative WOM intentions, while the second effect was significant only for negative WOM intentions. There was no significant interaction effect on attributions of crisis responsibility. When the social distance to a crisis was proximal, a company’s defensive crisis response strategy induced greater anger and stronger negative WOM intentions than did an accommodating strategy; however, this difference disappeared when the crisis was socially distant.

This result reveals that when a crisis is socially closer, people tend to pay closer attention to the situation (crisis response) than to dispositional factors (the company itself) in judging the company’s recovery efforts. In other words, proximal social distance to the crisis-induced low-level construal consists of concrete details that show how the company is managing a given crisis through a particular response strategy.Therefore, individuals seemed to attend to the details of the crisis more when it is proximal compared to when the crisis is distant. For the socially close crisis, the participants were more sensitive and responsive to new information coming from the organization (i.e., crisis response strategies) and the situation (i.e., crisis severity), thus generating stronger negative WOM intentions and greater anger toward a defensive response strategy. Our findings constitute empirical evidence that individuals’ processing styles determined by the social distance to a given situation can extend to the context of crisis communication, both at the affective and the behavioral level.

Previous literature on perceived crisis severity has focused mainly on this variable’s effect on attributions of crisis responsibility and organizational reputation (e.g., [12,49,55]). Additionally, past research has yielded inconsistent findings regarding the effects of crisis severity perceptions on different crisis outcomes [56]. In the present study, we uncovered an interaction effect of social distance and crisis severity perceptions at the behavioral level (i.e., negative WOM intentions). Our research showed that different levels of crisis severity perceptions affected negative WOM intentions only in the distant crisis condition. As we manipulated the level of crisis severity in the experiment by varying the amount of financial damage inflicted on the company, it is possible that participants used these monetary indicators as heuristic cues [57], which should match with high-level construals activated in the distant crisis condition. Therefore, crisis severity seems to affect individuals’ reliance on high-level construals only with socially distant crises. This aligns with previous research suggesting that when individuals are less involved in a given situation, they are more likely to rely on heuristic processing and are more susceptible to peripheral cues [57,58,59]. This may also explain why the interaction between social distance and crisis response strategy occurred only in the proximal crisis condition. When individuals construe events at a high level, they tend to ignore the information that is detailed and requires cognitive effort to process.

Despite their intuitively important role in crisis communication, we found no statistically significant results of crisis responsibility perceptions in this research. A study by Ham and Kim [60] found a similar result: a crisis response strategy can effectively influence behavioral intentions (e.g., WOM intentions and purchase intentions) while not necessarily shaping perceptions of crisis responsibility. Additionally, according to SCCT [43], although situational factors such as crisis history and prior reputation can affect individuals’ perceptions of crisis responsibility, the crisis type itself (i.e., how the crisis is being framed) is the key determinant of these perceptions. As such, individuals’ attributions of responsibility depend on the context of a crisis, regardless of the company’s response strategy.

5.1. Theoretical Implications

This study builds on current crisis communication research that focuses on audience-oriented crisis interpretation (e.g., [4,5,60,61,62,63]) by investigating how the psychological mechanism of perceived social distance affects public reactions to an organization’s crisis response strategies and different levels of crisis severity. Furthermore, as one of the few crisis communication studies applying CLT as a framework [50,63], this study shows how the public perceives available crisis information differently depending on the construal match between social distance and crisis-related variables (i.e., crisis response strategy and crisis severity).

Notably, the two situational variables—crisis response and crisis severity—interacted with social distance in opposite directions. Crisis response strategies mattered in evaluating a socially close crisis, but crisis severity did not impact the evaluations. The level of crisis severity mattered only for a socially distant crisis. The fact that different types of crisis information matched with different levels of social distance to the crisis illustrate the dynamics of public perceptions in crises. By expanding on the public-centered approach in crisis communication research, this research contributes to forming a “construal fit” between social distance, crisis response strategy, and crisis severity for effective crisis communication. We hope that such a fit can offer fresh insights into the potential outcomes of social distance along with situational factors in the context of corporate crises.

Any type of crisis information can be construed at a high or low level, presumably depending on the way in which this information is conveyed. Previous CLT-related research has examined the feasibility vs. desirability effect, showing that information on how to reach the end goal (i.e., feasibility) is a low-level construal feature and information on the value of the end goal (i.e., desirability) is a high-level construal feature (e.g., [23,64,65]). Relatedly, some studies have shown that how someone is behaving is construed at a low level, whereas information as to why someone is behaving a certain way is construed at a high level (e.g., [66]). We can speculate that crisis responses explaining how the company is proceeding with the situation could be construed at a low level, whereas crisis responses that explain why the company is doing so could be construed at a high level. Future tests of these speculations will strengthen the legitimacy of construal level theory’s application to crisis communication research.

This study assumed that public attributions of crisis responsibility could be affected by correspondence bias, individuals’ tendency to attribute a crisis to internal factors (i.e., dispositional traits) rather than contextual information (i.e., situational factors). Individuals’ interpretations and judgments are frequently influenced by the information that they receive and evaluate. In the context of corporate crises, the public attempts to make sense of the situation based on the limited information available in the media, while companies manage to identify the crisis type and their burden of responsibility with all resources at hand. Given this discrepancy between available resources and information, as well as different ways of approaching the same event between a company and its stakeholders in a crisis, we have demonstrated how individuals experience different thought processes due to the correspondence bias in their evaluation of the crisis.

5.2. Practical Implications

The current study demonstrated that social distance to a crisis along with related information could influence how individuals react to the crisis. From a practical perspective, we suggest that before deciding which kind of crisis response strategy to implement, the company should consider the public’s social distance due to its potential impact on crisis outcomes such as negative WOM intentions and anger. The results indicate that, on a very basic level, an accommodating crisis response strategy works better than a defensive crisis response strategy, especially when individuals perceive the crisis as socially close to them. This means that determining how to manage public anger during a crisis becomes more critical when the crisis is perceived as proximal. Compared to other negative emotions such as fear and shock, anger is more influential in motivating individuals to act [44,67] because it is the basis of approach-oriented actions [68]. Therefore, when handling a crisis that the public perceives as socially close to them, crisis communication experts should carefully consider how to alleviate public anger with the tone and emotional framing of their messaging.

The practical implications of this study go beyond the power of an accommodating crisis response. The study provides empirical evidence of what triggers different levels of construal when individuals attempt to make sense of crisis information. In other words, whether the public perceives a particular crisis to be socially close or distant can result from a complex interplay of factors in a crisis. Although this study manipulated social distance from a crisis simply by identifying it as a B2B or B2C crisis, there are other factors that can affect perceived social distance, leading to different construal levels. For instance, individuals can perceive similarity to a crisis based on the CEO’s attributes [69] or the company’s size [70]. This expands companies’ strategic options for effective crisis communication. When the company is prepared to implement an accommodating response, it can provide information that can lead the public to perceive it as socially close to them. Social distance can offer strategic guidance for organizations, suggesting that they can tailor their messaging based on the extent to which their stakeholders feel affected by the crisis [50]. Thanks to the ability to share news in real time via social media, today’s public is more likely to engage in active interpretation of a crisis, the parties involved, and the company’s response to the situation. It is therefore pivotal to monitor public engagement on social media because it may point to the public’s perceived social distance, an important psychological factor impacting the quality of the organization–public relationship. Effective crisis management involves addressing the needs of the organization’s stakeholders by managing their reactions and expectations in a given crisis situation.

A strong reputation is a key asset for maintaining a sustainable competitive advantage in business. As extensive negative media coverage tends to skew public perceptions toward the negative end of the sustainability spectrum [71], organizational failure to deal with negative news about a crisis may undermine public trust and even reverse the effects of an organization’s sustainability, ultimately damaging the organization’s reputation. Responses to crises represent a crucial strategic decision for protecting an organization’s reputation. The interactive effect of perceived social distance to a crisis with crisis response strategies and crisis severity on stakeholders’ crisis evaluations suggests the robustness of the construal fit effect. Therefore, understanding the construal fit based on public interpretations of a given crisis when crafting crisis responses can foster ongoing sustainability efforts by minimizing reputational damage. By considering a better construal fit between social distance, crisis response, and crisis severity, a company can establish effective communication strategies that contribute to its business sustainability and resilience in addition to enhancing mitigation of the damage.

5.3. Limitations and Future Directions

This study has several limitations. First, this study examined only one type of crisis (i.e., data scandal). Future studies can employ different types of crisis scenarios to more comprehensively understand the interplay of social distance, crisis response strategy, and crisis severity. Second, regarding effect size, our prior power analysis recommended total sample size of 171 with power (1–β) set at the recommended 0.90 level [72]. Although the study included 192 participants, it is still possible that the modest sample size limited the statistical significance, such as with H3 regarding anger. Third, we implemented a fictitious crisis and company to mitigate the potential for biases about real organizations to affect the results. In order to improve the external validity of our findings, it may be necessary to replicate our study in different crisis contexts and in real-life situations. Lastly, we manipulated social distance to a crisis by designating the companies in the scenarios as B2B or B2C. Individuals’ involvement with companies may affect the results when arguments are based on low-level construals but not when arguments are based on high-level construals [23]. Specifically, low involvement could contribute to individuals’ paying less attention to low-level information about distant objects; however, it has failed to explain results that show the underutilization of high-level information about proximal objects [23,73,74]. The most prominent criticism of construal level theory is that it confounds the level of motivation and involvement with psychological distance, although social psychology research, particularly message effects research, has refuted this claim [75]. Given the potential variables that can affect social distance, such as familiarity and involvement, future research should consider better ways of identifying and manipulating social distance.