Moral Deteriorations Sever Firm Identity

62 Pages Posted: 18 Jul 2022

See all articles by Julian De Freitas

Julian De Freitas

Harvard University - Business School (HBS)

Zarema Khon

University of Bath

Pechthida Kim

Harvard University

Samuel Johnson

University of Bath - School of Management

Date Written: June 30, 2022

Abstract

Firms change over time. Which changes are so damaging that consumers believe the firm’s very identity ceases to exist? We explored this question using Twitter data and eight experiments involving nearly 3,000 subjects. Consumers judged that moral deteriorations were particularly disruptive to a firm’s identity—just as or even more so than moral improvements, product changes, and brand personality changes. This effect occurred because consumers thought that morally good traits were essential to a firm’s identity, such that losing these traits seemed to sever the firm’s persisting identity. The effect was not explained by whether the firm was viewed as still being in the same category of industry nor by whether a change was viewed as tainting the firm. Whether a change was identity disrupting also depended on individual moral values: liberals viewed changes toward a conservative direction as severing a firm’s identity, and vice versa for conservatives. Moreover, consumers acted on these feelings when on social media sites, deactivating their Twitter accounts after Twitter underwent a moral deterioration that seemed to sever its existing identity. Together, these findings have marketing implications for brand management, brand activism, and countering negative firm stereotypes.

Keywords: Corporate identity, morality, brand activism, social media, business ethics, firm stereotypes

Suggested Citation

De Freitas, Julian and Khon, Zarema and Kim, Pechthida and Johnson, Samuel, Moral Deteriorations Sever Firm Identity (June 30, 2022). Harvard Business School Strategy Unit Working Paper No. 22-077, Harvard Business Working Paper No. 22-077, Available at SSRN: https://ssrn.com/abstract=4162116 or http://dx.doi.org/10.2139/ssrn.4162116

Julian De Freitas (Contact Author)

Harvard University - Business School (HBS) ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

Zarema Khon

University of Bath ( email )

Claverton Down
Bath, BA2 7AY
United Kingdom

Pechthida Kim

Harvard University

1875 Cambridge Street
Cambridge, MA 02138
United States

Samuel Johnson

University of Bath - School of Management ( email )

Claverton Down
Bath, BA2 7AY
United Kingdom

HOME PAGE: http://www.sgbjohnson.com/

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