Mind the gap: Understanding stakeholder reactions to different types of data security

Abstract

Data security breaches are an increasingly common problem for organizations, yet there are critical gaps in our understanding of how different stakeholders understand and evaluate organizations that have experienced these kinds of security breaches. While organizations have developed relatively standard approaches to responding to security breaches that: (1) acknowledge the situation; (2) highlight how much they value their stakeholders’ privacy and private information; and (3) focus on correcting and preventing the problem in the future, the effectiveness of this response strategy and factors influencing it have not been adequately explored. This experiment focuses on a 2 (type of organization) x 2 (prior knowledge of breach risk) with a control group design. Findings suggest that perceptions of competence is the most important factor influencing outcome variables like behavioral intention and social responsibility evaluations.