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  • 2022
  • Working Paper
  • HBS Working Paper Series

Moral Deteriorations Sever Firm Identity

By: Julian De Freitas, Zarema Khon, Pechthida Kim and Samuel G.B. Johnson
  • Format:Print
  • | Language:English
  • | Pages:62
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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; Consumer Behavior; Public Opinion; Moral Sensibility; Brands and Branding; Government and Politics

Citation

De Freitas, Julian, Zarema Khon, Pechthida Kim, and Samuel G.B. Johnson. "Moral Deteriorations Sever Firm Identity." Harvard Business School Working Paper, No. 22-077, June 2022.
  • SSRN
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About The Author

Julian De Freitas

Marketing
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More from the Authors
  • Ethical Risks of Autonomous Products: The Case of Mental Health Crises on AI Companion Applications By: Julian De Freitas, Ahmet Kaan Uğuralp and Zeliha Uğuralp
  • Speedy Activists: Firm Reaction Time to Sociopolitical Events Influences Consumer Behavior By: Jimin Nam, M. Balakrishnan, Julian De Freitas and Alison Wood Brooks
  • Moral Thin-Slicing: How Snap Judgments Affect Online Sharing of Moral Content By: Julian De Freitas and Alon Hafri
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