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This study aims to analyze the impact of corporate risk taking on the sustainability of firms in USA and Germany. As risk taking is an expensive phenomenon, the firm may shift the resources from stakeholder well-being to profit maximization of shareholders. Ultimately, risk taking results in the reduction of firm’s sustainability.

To capture the impact of corporate risk taking, the corporate-governance variables, i.e. “independent board structure” and “board size,” were used as instrumental variables to control excessive corporate risk taking and restrict it at a healthy level. A sample of 3,387 unbalanced panel observations from USA and Germany, for the period 2004-2015, were assessed.

The results confirm that corporate risk taking has a negative and significant impact on the sustainability of firms.

Government and policymakers in USA and Germany may introduce regulations to curb excessive corporate risk taking for sustainable corporations and sustainable society. This research suggests that corporate risk taking is not in the best interest of stakeholders.

Previous literature only finds the impact of sustainability on corporate risk taking and there is not a single study that examines the impact of corporate risk taking on the sustainability of a firm. Thus, this study contributes to existing literature on corporate risk taking and sustainability. The study further contributes by using the instrumental variable two stage least square.

The purpose of this paper is to examine the asymmetric impact of service failure severity and agreeableness on consumer switchover intention with the mediating role of consumer forgiveness in the aftermath of service failure.

In total, 364 university students were given a hypothetical service failure situation and their response was collected through a standardized questionnaire. Multiple regression and Preacher and Hayes (2004) mediation analysis tests were conducted to analyze data.

The findings reveal that service failure severity has a direct positive impact on switchover intention and it also has an indirect impact on switchover intention through consumer forgiveness which it tends to weaken. On the other side, agreeableness has a direct negative impact on switchover intention, and it inhibits switchover intention indirectly too by stimulating forgiveness.

A cross-sectional study involving convenience sampling has been conducted through self-report measures. Generalization of the research findings shall therefore be done with caution.

Severity of failure hampers forgiveness and therefore service managers should check factors that may challenge the tolerance level of consumers. While gauging satisfaction in post failure scenario, it is equally important to gauge consumer forgiveness.

This study is among the initial endeavors to explore forgiveness in service failures context. Also it is the first validation of a direct positive relationship between agreeableness and forgiveness in a South Asian country.