The corporate social responsibility literature recognizes that firms’ existing CSR reputation can serve as a safeguard from the impact of reputation-damaging events on a firm’s social legitimacy. However, the literature has yet to focus on the extent to which CSR activities can help mitigate such damage, post-event. This article examines how a firm’s social actions following a product recall facilitate the recovery of its diminished social legitimacy. We test our predictions using a sample of 197 product recalls involving 168 publicly (...) traded corporations from 1999 to 2009 and demonstrate that the speed of the CSR response, the frequency of CSR activities, and the intensity of CSR activities have a significant effect on firm recovery following crisis. The effects were most pronounced in instances where the magnitude of the recall was most severe. The visibility of the recall has a limited impact on post-event recovery. We discuss our contributions to research on strategic CSR and recovery. (shrink)

Much research has examined the positive effects of legitimacy spillover. However, negative events may reduce the extent of legitimacy, which may in turn spillover to affect the legitimacy of important stakeholders including alliance partners. This study examines incidents of regulative legitimacy violation and focuses on the effect such incidents have on the alliance partners of the perpetrating organizations. We specifically examine three types of such violations—administrative law, criminal law, and civil law—to show that the loss of regulative legitimacy negatively influences (...) the stock market performance of alliance partners. More interestingly, not all corrective actions and repair efforts are equally impactful. We show that the effect of repair efforts by the perpetrating firm on the alliance partner differ depending on the nature of those violating incidents. (shrink)