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The Moral Disillusionment Model of Organizational Transgressions: Ethical Transgressions Trigger More Negative Reactions from Consumers When Committed by Nonprofits

Version 2 2024-06-04, 10:30
Version 1 2020-05-13, 16:52
journal contribution
posted on 2024-06-04, 10:30 authored by MJ Hornsey, CM Chapman, H Mangan, Stephen La MacchiaStephen La Macchia, N Gillespie
© 2020, Springer Nature B.V. We tested whether the impact of an organizational transgression on consumer sentiment differs depending on whether the organization is a nonprofit. Competing hypotheses were tested: (1) that people expect higher ethical standards from a nonprofit than a commercial organization, and so having this expectation violated generates a harsher response (the moral disillusionment hypothesis) and (2) that a nonprofit’s reputation as a moral entity buffers it against the negative consequences of transgressions (the moral insurance hypothesis). In three experiments (collective N = 1372) participants were told that an organization had engaged in fraud (Study 1), exploitation of women (Study 2), or unethical labor practices (Study 3). Consistent with the moral disillusionment hypothesis, decreases in consumer trust post-transgression were greater when the organization was described as nonprofit (compared to a commercial entity), an effect that was mediated by expectancy violations. This drop in trust then flowed through to consumer intentions (Study 1) and consumer word of mouth intentions (Studies 2 and 3). No support was found for the moral insurance hypothesis. Results confirm that nonprofits are penalized more harshly than commercial organizations when they breach consumer trust.

History

Journal

Journal of Business Ethics

Volume

172

Pagination

653-671

Location

Berlin, Germany

ISSN

0167-4544

eISSN

1573-0697

Language

English

Publication classification

C1 Refereed article in a scholarly journal

Issue

4

Publisher

SPRINGER