When the Algorithm Becomes the Brand Crisis: A Sociotechnical Theory of Distributed Responsibility and Accountable Transparency

Abstract:Artificial intelligence systems increasingly enact market-facing promises through chatbots, recommendation systems, automated decisions, and generative interfaces. Their failures, misuse, and misrepresentation raise a question that conventional brand-crisis models do not fully specify: how do stakeholders assign responsibility when technical causation, customer-facing control, and governance duties are distributed across an AI system, developer, deployer, vendor, and user? This conceptual paper develops a sociotechnical process theory from a structured, federated scoping synthesis of verified academic and primary sources. It distinguishes an AI/algorithmic incident from an AI-related organisational crisis and, in turn, from an AI-related organisational scandal. The framework proposes that incident configuration shapes actor-specific attribution; attribution informs capability, integrity, fairness, and relationship appraisals; and public moralisation may, but need not, escalate an incident into scandal. The theory offers a reconciliation of findings that algorithm involvement can buffer negative brand reactions in some settings while robot and chatbot failures can redirect responsibility to an associated firm in others. It introduces accountable transparency as a proposed response configuration that combines timely notice, an intelligible account, role-responsibility acknowledgement, remedy, evidence of correction, and recourse. The evidence supports conditional, proximal inferences about blame, trust, satisfaction, firm evaluation, and communication credibility more strongly than claims about durable reputation, brand equity, or market performance.

Artificial Intelligence (cs.AI)

arXiv:2609.00510 [cs.AI]

(or arXiv:2609.00510v1 [cs.AI] for this version)

https://doi.org/10.48550/arXiv.2609.00510 Focus to learn more arXiv-issued DOI via DataCite (pending registration)

arXivLabs is a framework that allows collaborators to develop and share new arXiv features directly on our website.

Both individuals and organizations that work with arXivLabs have embraced and accepted our values of openness, community, excellence, and user data privacy. arXiv is committed to these values and only works with partners that adhere to them.

Have an idea for a project that will add value for arXiv's community? Learn more about arXivLabs.