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Thursday, May 18, 2023

People Construe a Corporation as an Individual to Ascribe Responsibility in Cases of Corporate Wrongdoing

Sharma, N., Flores-Robles, G., & Gantman, A. P.
(2023, April 11). PsyArXiv


In cases of corporate wrongdoing, it is difficult to assign blame across multiple agents who played different roles. We propose that people have dualist ideas of corporate hierarchies: with the boss as “the mind,” and the employee as “the body,” and the employee appears to carry out the will of the boss like the mind appears to will the body (Wegner, 2003). Consistent with this idea, three experiments showed that moral responsibility was significantly higher for the boss, unless the employee acted prior to, inconsistently with, or outside of the boss’s will. People even judge the actions of the employee as mechanistic (“like a billiard ball”) when their actions mirror the will of the boss. This suggests that the same features that tell us our minds cause our actions, also facilitate the sense that a boss has willed the behavior of an employee and is ultimately responsible for bad outcomes in the workplace.

From the General Discussion

Practical Implications

Our findings offer a number of practical implications for organizations. First, our research provides insight into how people currently make judgments of moral responsibility within an organization (and specifically, when a boss gives instructions to an employee). Second, our research provides insight into the decision-making process of whether to fire a boss-figure like a CEO (or other decision-maker) or invest in lasting change in organizational culture following an organizational wrongdoing. From a scapegoating perspective, replacing a CEO is not intended to produce lasting change in underlying organizational problems and signals a desire to maintain the status quo (Boeker, 1992; Shen & Cannella, 2002). Scapegoating may not always be in the best interest of investors. Previous research has shown that following financial misrepresentation, investors react positively only to CEO successions wherein the replacement comes from the outside, which serves as a costly signal of the firm’s understanding of the need for change (Gangloff et al., 2016). And so, by allocating responsibility to the CEO without creating meaningful change, organizations may loseinvestors. Finally, this research has implications for building public trust in organizations. Following the Wells Fargo scandal, two-thirds of Wells Fargo customers (65%) claimed they trusted their bank less, and about half of Wells Fargo customers (51%) were willing to switch to another bank, if they perceived them to be more trustworthy (Business Wire, 2017).Thus, how organizations deal with wrongdoing (e.g., whether they fire individuals, create lasting change or both) can influence public trust. If corporations want to build trust among the general public, and in doing so, create a larger customer base, they can look at how people understand and ascribe responsibility and consequently punish organizational wrongdoings.