Negative Blogs, Positive Outcomes: When should Firms Permit Employees to Blog Honestly?

Rohit Aggarwal (), Ram Gopal () and Ramesh Sankaranarayanan ()
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Rohit Aggarwal: Operations and Information Management, School of Business, University of Connecticut, http://rohitaggarwal.wordpress.com
Ram Gopal: Operations and Information Management, School of Business, University of Connecticut

No 07-32, Working Papers from NET Institute

Abstract: Weblogs or blogs have recently received a lot of attention, especially in the business community, with a number of firms encouraging their employees to publish blogs to reach out and connect to a wider audience. It is beginning to be recognized that employee blogs can cast a firm in either a positive or a negative light, thereby enhancing or harming the firm’s reputation. Paradoxically, under certain conditions negative postings by employees can actually help the overall reputation of the firm. The rationale for this is that negative posts raise the credibility of an employee blog and attract more readers, who then will also be exposed to the positive posts on the blog. Drawing from the literature on customer advocacy and the stage model theory of information processing in cognitive psychology, we develop a model to decipher the relationship between the extent of negative posts and the overall positive Word of Mouth (WOM) generated by the employee blogs for the firm. An empirical model is developed to account for the inherent non-linearities, endogeneity and unobserved heterogeneity concerns, and potential alternative specifications. Our results suggest that negative posts act as a catalyst to increase the readership of an employee blog, with readership increasing exponentially in the initial stages and then stabilizing. The empirical findings are used to generate an analytical framework that firms can use to formulate employee blogging policies. We illustrate the application of the framework using blogging data from Sun Microsystems.

Keywords: blog; employee blogs; bloggers; blogging policies; word-of-mouth; customer advocacy; information processing theory; non-linear models (search for similar items in EconPapers)
JEL-codes: C10 C23 C51 C52 C80 C87 D78 L10 M50 O33 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2007-09, Revised 2007-09
New Economics Papers: this item is included in nep-bec
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