Policy crisis in service ecosystems

Purpose This research introduces the concept of policy crises. Using a service ecosystem lens, it tests how meso-level responses to macro-level political change impact micro-level brand perceptions and intentions, showing downstream implications of public policy. This research aims to answer a call for empirical work that integrates public policy and services marketing. Design/methodology/approach In two online experiments, this research tests whether organizational responses of supporting, stalling or a mixed approach to a policy crisis, as well as actor political affiliation, impact individual brand perceptions and behavioral intentions. Findings Supportive actions, compared to mixed and stalling actions, negatively impact individual perceptions of a service brand’s authenticity, brand trust and behavioral intentions. However, this pattern is reversed for individuals who share a political affiliation with the policy source (e.g. executive branch). These results hold when individual and regional differences are accounted for. Practical implications Based on our findings, we present a tool for service organizations to use in efficient and data-driven decision-making in times of policy change. Recommendations are based on whether a given policy change is a crisis, what types of actions are legally justifiable, and whether a majority of the micro-level members of the service ecosystem are politically affiliated with the party responsible for the policy change. Originality/value This research identifies downstream implications of a recent, highly visible policy crisis and extends theory on service ecosystems, brand management and crisis management at the intersection of public policy and services marketing.