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The digitization of corporate processes and activities, accelerated by the COVID-19 pandemic, does not only hold advantages. Rapidly implemented software systems lead to an increased risk of data breaches, inducing adverse effects. As a countermeasure, companies can apply data breach response actions. In this paper, drawing on service failure literature and justice theory, we examine how companies' actual response actions affect customers' justice perceptions. By conducting a scenario-based experiment, we investigate how response action can be differentiated through the perception of the three dimensions of justice theory. The results suggest that for some response actions previous findings from service failure recovery are transferable. Our results indicate that distributive and procedural justice can be influenced by corporate response actions. However, the effects on interactional justice appear to be limited. We discuss the applicability of justice theory in the scope of data breaches. [ABSTRACT FROM AUTHOR]

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. [ABSTRACT FROM AUTHOR]

Companies around the world are faced with challenges in dealing with data breaches. While in Germany companies need to notify the affected and fear to lose their valuable customers, in Bolivia, where rapid digital globalization increases vulnerability, data security overall is not a publicly present topic, and customers are directly exposed to the consequences of security incidents. Our study examines the cultural difference in addressing the digital challenge of recovering from data breaches. We investigate through a scenario-based experiment the effect of compensation and remorse on the customer-company relationship. Our results show that German customers are more likely to demand compensation for a data breach as a recovery action, whereas Bolivian customers are satisfied with an apology. We discuss this finding in the context of crosscultural values and practical implications for countries that are currently undergoing a rapid rise in technology and are therefore exposed to substantial security risks. [ABSTRACT FROM AUTHOR]