Mediational Role Of Justice Perceptions On The Impact Of Customer Compensation Strategies On Outcomes: A Longitudinal Study Of Target's Data Breach
COM2 Level 4
Executive Classroom, COM2-04-02
Abstract:
Data breaches have become a significant threat to organizations both from financial and customer-relations perspectives. We developed a nomological network linking post-breach compensation strategies to key outcomes, namely continued shopping intentions, positive word-of-mouth, and online complaining, with the effects being mediated by customers' justice perceptions. We conducted a longitudinal field study investigating Target's mega data breach in 2013 that affected more than 110 million customers. We used the theory of counterfactual reasoning to examine customers' expectations toward compensation immediately after the breach was confirmed (survey 1) and their experiences after reparations were made (survey 2). Evidence from polynomial regression and response surface analyses of data collected from 388 affected customers showed that customers' justice perceptions are influenced by the actual compensation provided as well as the type and extent of compensation an organization could and should have provided, i.e., customers' compensation expectations. Interestingly, positive and negative expectation disconfirmation led to less favorable justice perceptions compared to when expectations were confirmed. Justice perceptions were, in turn, associated with key outcomes. We discuss implications for research on data security, information systems, and justice theory.
Biodata:
Sue Brown is the APS Professor and department head of Management Information Systems in the Eller College of the University of Arizona. She completed her PhD at the University of Minnesota. Her research interests include technology implementation, individual motivations and consequences of IT use, and research methods. She has received funding for her research from the National Science Foundation, and other public and private organizations. Her work has appeared in leading journals including MIS Quarterly, Information Systems Research, Organizational Behavior and Human Decision Processes, Journal of Management Information Systems, Journal of the Association for Information Systems, and others. She has served as an AE at MIS Quarterly, Information Systems Research, Journal of the Association for Information Systems, and Decision Sciences, and recently completed two terms as SE at MIS Quarterly. She is currently coeditor-in-chief of AIS Transactions on Replication Research, and was named an AIS Fellow in 2017.