Research Papers

Abstract

The increasing number of mobile devices and their interconnection, the amount of shared data and the risk of data loss increases. An example of this is fitness trackers, which collect a large amount of personal data and share it with other devices and platforms. Due to the high-risk potential, data breaches can have far-reaching impacts on the business and the consumer. By applying recovery actions after a data breach, a company can be able to mitigate the negative impact on market conditions and customer outcomes. Previous consumer behavior in the event of a data breach shows that affected parties often terminate their relationship with the company. In an attempt to avoid such adverse customer reactions, organizations increasingly employ recovery strategies such as they apologize to the customers or they offer product-related compensation. The aim is to retain trust, customer loyalty, word of mouth. Our study examines the effectiveness of different recovery strategies through an experimental investigation. The research model is informed by two theoretical lenses, i.e. expectation-confirmation theory and the justice theory. Our results show the impact of data breach recovery actions on customer outcomes. It was found that the selected recovery strategies have a positive influence on the confirmation.

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