or changes in reputation, may overlook multiple nuances of stakeholder expectations of the firm. For instance, firms from specific industries may be more commonly associated with specific types of irresponsibility, which desensitises stakeholders to news of such behaviour. More specifically, it may be that recalls are generally expected in the pharmaceutical or automotive industries but depart from norms set over time within the aviation industry. Furthermore, environmental harms caused by firms within the petrochemical industry may be largely expected by its stakeholders whereas environmental harms caused by consumer technology organisations may not be expected. Similarly, losses of human life may be considered an integral aspect of some organisations operating within the healthcare industry but are not within the catering industry. Stakeholders may therefore draw upon a host of prior knowledge to gauge the severity of events (Kelley, 1967). Therefore, broad categories of irresponsibility may be more or less relevant based on the industry in which a firm operates. Similarly, an idea that is currently undeveloped in the reputation penalties literature, is that organisations with certain business models may also be associated with different stakeholder expectations around particular behaviours. More specifically, through the lens of attribution theory it might be plausible to assume that firms with low cost business models may be held to lower human rights and social responsibility standards than firms adopting more premium priced models. The logic being that certain corporate behaviours are implicitly written into the contract of service between some stakeholders (such as customers) and low cost providers. Stakeholders of cost-leading organisations may expect a diminished ability of the firm to provide goods and services at low prices whilst also meeting high ethical standards. For instance, the Rana Plaza workplace safety incident seemingly had little effect on Primark’s reputation and did little to blunt its sales growth despite the deaths of factory workers due to unsafe working conditions (The Times, 2013). Wal- Mart continues to be considered one of the world’s most reputable organisations (Fortune, 2016) despite a history of reported abuses within its supply chain. What these examples may imply is that the relationship between broad categories of irresponsibility and reputation is more complex when considered from a more nuanced theoretical perspective. Yet, this method of broadly categorising events remains the status quo in the reputation penalties research to date.
Indeed, human perception has been suggested to be biased towards negative events (Mishina, Block and Mannor, 2012). Thus, broad categories of irresponsibility may potentially provoke stakeholder criticality towards firms. Although I contend that, because the organisation may only be associated with an irresponsibility (and not perceived as culpable for causing it) broad categories of irresponsibility largely neglect the nuances of irresponsibility that impart their distinctiveness to reputational assessors. In light of these points, I argue that broad categories of irresponsibility have a less significant relationship with reputation than previously suggested in the majority of empirical reputation research. Therefore, I hypothesise that:
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H4.2: There is no significant relationship between broad classifications of irresponsibility and changes in corporate reputation.
4.4. Harm Types: Physical, Emotional, Financial, Environmental and Civil Liberties Harms
Another potential - yet broad - method for assessing observed irresponsibility is the nature of the undesirable outcome. One common feature of corporate irresponsibility is that each has, to a greater or lesser extent, some form of economic, social or environmental outcome which has the potential to be perceived as irresponsible in some manner. This outcome may be experienced by an organisation’s stakeholders or by the wider natural environment. Coombs (2007: 164) suggested three key ways in which stakeholders may be harmed, namely “physically, emotionally and/or financially”. Though categorising events on the basis of the type of stakeholder harm may be considered broader still than the previous ‘categories of irresponsibility’ (i.e. product recalls, accounting frauds and so on), research has yet to fully explore whether certain types of harm have general effects on reputation. From an attribution perspective, the merit to exploring broad harm types stems from the potential for some incidents to break widely held social norms and morality, which therefore may elicit a broadly negative response (Donaldson and Dumfee, 1999). To date, the finance and economics perspectives suggests that the market generally penalises events which impacts ‘people’ whilst irresponsibilities towards the environment are not sanctioned by the market (Engelen and Van Essen, 2011). However, preliminary research by Zyglidopoulos (2001) on the effects of physical harm using large-scale survey methods found no significant effects between physical harm and reputations, though harms toward the natural environment were, in fact, sanctioned (Zyglidopoulos, 2001). However, thus far, empirical research remains salient on how significant these harm types are when compared to other forms of outcomes.
Though distinctly stakeholder oriented, financial, physical and emotional harms neglect two broad irresponsibility outcomes; first, environmental harms are missing. Depending on the proximity of the stakeholder group to the environmental impact, stakeholders are often not directly impacted by environmental incidents. Cases such as the British Petroleum oil spill, illustrate the potential for environmental harms to affect stakeholders financially and/or physically as residents and businesses nearby were adversely affected because of their proximity to the spill. This said, environmental harms do not directly affect the lives, lifestyles or livelihoods of the majority of organisational stakeholders in the main. Therefore, this category of outcomes may be seen as distinctive and separate. This distinction to place environmental harms as separate here is an important one, particularly for research such as this which aims to empirically test equivocal research findings of a body of literature, for which, environmental