The question of what happens when companies make mistakes was at the center of Friday’s research colloquium presentation.
The talk, “Ethics, Responsibility, Relationships and Advocacy,” explored how various ethical decisions affect consumers’ overall perception of a company.
“We’ve been thinking about what happens when organizations just make mistakes,” Browning said. “Not when they’re in crisis mode, but when they make everyday mistakes.”
To look at this question, Browning and Yang started with the idea of ethical consumerism: that stakeholders will reward a company for making positive ethical choices.
“What you’re doing is connecting moral behaviors to economic responses,” Browning said.
To test this idea, the two used the American Red Cross as an example. They hypothesized that people would react negatively when the American Red Cross made ethical missteps that went against either its primary values, which are ideals explicitly adopted by a company in ways like mission statements, or its tertiary values, which are values more indirectly perceived to be associated with an organization.
By studying how participants reacted to possible transgressions against the American Red Cross’s primary values, such as mismanaging donor funds, as well as possible violations of tertiary values, the study found that relationships with ethical consumers are vital.
“Who you say you are is critically important,” Browning said. “If you screw that up, people see you as hypocritical, and it hurts your relationships with key stakeholders.”
In addition to this study, Browning and Yang also talked about their interest in researching advocacy communication. This idea has been put into practice recently with Nike’s campaign featuring Colin Kaepernick.
“Are organizations better off taking a stand and alienating part of the public or just keeping their mouths shut?” Browning asked.
These ideas of advocacy communication as well as the cost of this social advocacy to brands are providing the basis for future studies.
Yang said age and political ideology both affect consumer reactions to this kind of communication from companies.
“Probably some people have stronger and weaker relationships with the brand, but their perception is also affected by how strongly people think of the issue,” Yang said. “Basically, how much do I personally support or disagree with this issue?”
Overall, both professors hypothesized that taking a stand would be more beneficial to companies than staying silent.
“When the world is so divided, we want the brands to stand up and speak about an issue,” Yang said. “Although some people may hate the brand at first, eventually there will be a reward.”