Moral Deteriorations Sever Firm Identity

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.