Vicarious shame and psychological distancing following organizational misbehavior

When organizations are engaging in publicly visible misbehavior, organizational members’ emotional responses may affect the organization’s ability to react effectively. If members respond with shame, they have a high tendency to distance themselves from the organization, a phenomenon termed cutting off reflected failure. Further, for those who identify more closely with the organization at the time of the misbehavior, this effect is stronger. We report two studies that tested the above predictions—a field study of a real industry-wide crisis in Taiwan’s fast-food industry and a university accounting scandal. We found that shame responses enhanced intentions to distance from the organization, and that organizational identification boosted the shame response.