Track 9: Social Influence
Aner Sela (University of Florida)

9C. Corporate Morality

Saturday, March 5
2:00pm – 3:30pm EST
Discussant: Amit Bhattacharjee (INSEAD)
MC: Sydney Scott (Washington University in St. Louis)
Calendar Invite: Add to calendar
Student Coordinator: Arnaud Monnier (Cornell University) (apm237@cornell.edu)

Competitive Papers

Do the Ends Justify the Means? Understanding Moral Reactance to “Poverty Porn”
Authors: Shannon Duncan (The Wharton School, University of Pennsylvania), Deborah Small (The Wharton School, University of Pennsylvania), Emma Levine (University of Chicago - Booth School of Business)
Presenting Author: Shannon Duncan (The Wharton School, University of Pennsylvania)
Aid organizations often use graphic depictions of human suffering as a means to elicit sympathy and aid. While effective, critics condemn these practices as exploitative, referring to them as “poverty porn.” We examine lay reactions, finding that consumers generally judge “poverty porn” as morally acceptable, except when it involves deception.
Does Removing an Unethical Founder Improve Brand Evaluations?
Authors: Lan Anh Ton (University of Georgia), Rosanna Smith (University of Georgia)
Presenting Author: Lan Anh Ton (University of Georgia)
When a founder engages in ethical misconduct, the company may fire the founder in hopes of restoring the brand’s reputation. We propose that the company’s decision to remove (vs. retain) the unethical founder may not always improve brand evaluations due to its negative effect on perceived authenticity. We examine this reasoning across three experiments and an event analysis that explores the impact of firing founders (vs. non-founders) involved in the #MeToo movement on firms’ financial performance.
The Moral Suppression of Sensory Consumption
Authors: Shreyans Goenka (Virginia Tech), Manoj Thomas (Cornell University)
Presenting Author: Shreyans Goenka (Virginia Tech)
This research investigates when and why moral values suppress sensory consumption. Five preregistered experiments and country-level archival data show that individuals and societies that adhere to the binding values tend to consume less sensory products (e.g., alcohol, tobacco, soda, sex toys). The effects attenuate after moral licensing. Moreover, binding values only suppress personal sensory consumption; the effects reverse for shared sensory consumption. Further, reframing sensory products as status products can reverse the preferences. Altogether, findings show how the group-oriented moral beliefs prevalent in society can alter the pursuit of pleasure and shift consumption patterns in the economy.
Corporations Are Viewed as Psychopaths with Good True Selves
Authors: Julian De Freitas (Harvard Business School), Samuel G. B. Johnson (Psychology Department, University of Warwick), Zarema Khon (University of Bath, School of Management), Pechthida Kim (Harvard University)
Presenting Author: Julian De Freitas (Harvard Business School)
Firms change over time. Which changes are so disruptive that consumers believe the firm’s very identity ceases to exist? Despite ascribing psychopathic traits to firms, consumers judged that moral deteriorations were particularly disruptive—just as or even more so than product changes—an effect explained by moral essentialism.

Flash Talks

Morality as Market Friction: Product Valuations Reflect Moral Judgments of Counterparts in Market Exchanges
Authors: Camilla Zallot (Rotterdam School of Management, Erasmus University), Gabriele Paolacci (Erasmus University Rotterdam)
Presenting Author: Camilla Zallot (Rotterdam School of Management, Erasmus University)
The extent to which markets increase welfare depends on whether products are allocated to the consumers who value them most. We show that consumers’ product valuations incorporate moral judgments; WTP decreases and WTA increases when in a transaction with an agent perceived to be immoral. We provide evidence that this adjustment in valuation is driven by a desire to actively reduce the amount of value an immoral counterpart would accrue from completing the transaction, versus for example a desire to simply avoid engaging. Consumers may use market exchanges not only to satisfy their needs, but also to sanction actions and beliefs they do not approve of; this makes transactions more or less likely to occur depending on people’s approval of their counterparts, exerting ‘friction’ on the market to the extent that it interferes with its ability to achieve efficient allocations.
Inequality Aversion: Is Being Wrongful to "All" Fairer than Being Wrongful to "Some"?
Authors: Hoori Rafieian (Fordham University), Anubhav Aggarwal (Iona College)
Presenting Author: Hoori Rafieian (Fordham University)
"In this research, we examine people’s aversion to inequality in instances that to treat everyone equally, one would have to be wrongful to all of them. We find that the inequality aversion is so strong in people (particularly among women) that they find systems and decisions that are wrongful to all to be fairer, more moral, and better than systems that are wrongful to some, even though the wrongful to all treatment is potentially one with lower overall welfare. "

Posters

The Potential Pitfalls of Firms Communicating Philanthropic CSR on Social Media
Authors: Cory Haltman (The Ohio State University), Grant Donnelly (The Ohio State University), Rebecca Reczek (The Ohio State University)
Presenting Author: Cory Haltman (The Ohio State University)
     Prior work on corporate social responsibility (CSR) has examined how charitable efforts affect consumer perceptions of a firm. This past work has largely overlooked a major variable related to CSR: how the firm communicates their contributions. We address this gap by showing that the way in which firms share messages about their charitable acts on social media can affect the way they are perceived by consumers. Specifically, we demonstrate that firm posts about CSR that are perceived as persuasion attempts result in reduced perceptions of altruism and hence purchase intentions. We also highlight an intervention that reduces this backfire effect.
The Impact of Ethical Company Ratings on Consumer Behavior
Authors: Aaron Nichols (Questrom School of Business, Boston University), Romain Cadario (Rotterdam School of Management, Erasmus University), Nina Mazar (Questrom School of Business, Boston University)
Presenting Author: Aaron Nichols (Questrom School of Business, Boston University)
Consumers are increasingly looking for companies committed to sustainability and ethics. Consequently, third-party organizations have started compiling ethical impact ratings, reflecting companies’ ethical impact internally (i.e., on their employees), and externally (i.e., on the environment and society). This research investigates how consumer judgement and decision-making is affected when an organization’s ethical impact is made salient. Across two pre-registered experiments, evidence indicates that ethical impact ratings not only influence attitudes toward organizations (Experiment 1), but also influence purportedly consequential job-recruitment preferences (Experiment 2, Part 1), and consumers’ subsequent perceptions and reactions to a news article concerning those organizations (Experiment 2, Part 2).
A Brand-New Day: How Commitment and Trust Impact Perceived Motivation of a Firm’s Efforts to Do Good
Authors: Tara-Ann Dugan (DePaul University), Jim Mourey (DePaul University)
Presenting Author: Tara-Ann Dugan (DePaul University)
As consumer expectations for brands to “do good” increase, companies are engaging in more corporate social responsibility (CSR) and Brand Activism (BA). However, these prosocial efforts sometimes backfire as consumers question companies’ motives. Three experiments explore whether perceived commitment and firm transparency predict the intrinsic or extrinsic (i.e., virtual signaling) motivation of a company. Findings suggest firms have little to gain, but much to lose, from engaging in CSR/BA unless perceived commitment is strong. Transparency does not offset low commitment or predict company motivation. Effects are driven by differences in trust, which also predict future engagement with the company.
Corporate activism and the Black Lives Matter movement: Examining customer responses within a social identity context
Authors: Michael Callow (Morgan State University), Omar Khan (Morgan State University)
Presenting Author: Omar Khan (Morgan State University)
This study examines the impact of antecedent variables on customer reactions to corporate activism. We utilize social identity theory to examine moderating effects of in-group favoritism on customers’ responses to corporate activism. The Black Lives Matters (BLM) movement is used to test our proposed model and hypotheses. We compare how Black and White customers responded to a vignette involving a fast-food restaurant supporting the BLM movement. Data was collected using a national consumer panel from a marketing research company. Hierarchical regression was used to examine the results. Our findings suggest that age, education level, political identity, and racial identity impact how respondents viewed this announcement. We found that in-group favoritism moderates the impact that racial identity has on changes in attitude towards the company.
Supererogation: Analyzing the Effects of Fault Revealing on Seller Profits
Authors: Narmin Banu (Carleton University), M. Mahboob Rahman (BRAC University)
Presenting Author: Narmin Banu (Carleton University)
"This investigation examines the effect of a supererogatory act, the revelation of a product’s fault to a buyer by a seller, on seller profits. In a simulated context, the seller proactively points out product defects which may influence a buyer’s eventual decision to purchase. The studies revealed that despite its temporary effect of discouraging sales, the supererogatory act of revealing a product’s faults may lead to higher overall seller profits in repeated games by signaling honesty. "
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