Can Corrections Repair the Damage to a Corporate Image Caused by Negative Publicity?

Abstract

Negative publicity in newspapers can cause severe and lasting damage to a company's corporate reputation. Judges can order a newspaper to publish a correction if they find the publication to be unjustified or incorrect. The goal of this correction is to repair the damage to the company's reputation. The question may be asked whether corrections achieve this goal. Previous research has shown that people tend to stick to their initial beliefs regardless of whether they are contradicted by new information or not. An experiment was conducted to study whether corrections succeed in repairing such damage. The ratings of a company's reputation were obtained after the subjects had read either an objective newspaper report or a subjective one, or after reading the same subjective report followed by a correction. The results show that reading the correction results in similar corporate reputation ratings as reading the objective version does. Reading the subjective version leads to more negative ratings of the company's corporate reputation. Therefore, the results show that, at least under certain circumstances, a correction can repair the damage caused by unjustified negative publicity.