Blog, Blogger and the Firm: Can Negative Posts by Employees Lead to Positive Outcomes?

Abstract

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. The business world is beginning to realize that employee blogs can cast a firm in either a positive or a negative light, thereby enhancing or harming the firm’s reputation. However, we find that negative posts by employees draw a higher readership, which has the potential to actually help the overall reputation of the firm. The explanation for this is that readers perceive an employee blogger to be honest and helpful when they read negative posts on the blog, and recommend the blog more to their friends, who will then also be exposed to the positive posts on the blog. First, we present a theoretical discussion, explaining why blogs containing negative posts could draw a larger audience. Next, we present empirical evidence that blogs that contain negative posts do draw a larger readership, and we derive a relationship between the extent of negative posts and readership. Our empirical model accounts for inherent non-linearities, serial correlation, issues of endogeneity and unobserved heterogeneity, and potential alternative specifications. Our results suggest that ceteris paribus, negative posts increase the readership of an employee blog asymptotically. Furthermore, we use the derived model to suggest conditions under which negative posts on an employee blog can lead to a greater overall positive influence on readers towards the employee’s firm. We illustrate the application of the framework using a unique blogging data from employees at a Fortune 500 company.

Keywords: blog, employee blogs, bloggers, attribution theory, non-linear models, negative posts, influence