Consumer biases in the perception of organizational greed

Abstract

AbstractThis article extends current models of how consumers judge or perceive organizations as greedy using the theoretical framework of motivated moral reasoning. We show that inherent features of an organization (size and ‘black sheep’ status) and its behaviour (relative frequency) bias consumer perceptions of organizational greed. We use an experimental methodology, present subjects with vignettes describing different scenarios, validate our questionnaire using confirmatory factor analysis, and test our hypotheses using a general linear model with covariates. Our findings suggest that consumer perceptions of organizational greed are subject to three effects: the underdog effect (Study 1, n = 496), the black sheep effect (Study 2, n = 229) and the ‘common is moral’ heuristic (Study 3, n = 249). This is the first study to investigate greed under a motivated reasoning paradigm and to show that perceptions of organizational greed are subject to socio‐psychological biases. This study also provides advice on branding and positioning strategies that appeal to the underdog status of an organization or its local origins.