The Conversation: Why we think businesses are out to get us

The Conversation: Why we think businesses are out to get us

Research shows that people often take a dim view of businesses, interpreting many different actions as an attempt to take advantage of consumers.

By Laurence Ashworth, Associate Professor, Smith School of Business

October 18, 2018

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Research shows that people often take a dim view of businesses, interpreting many different actions as an attempt to take advantage of consumers. (Photo by Samson Creative/Unsplash)

Justin Welby, the archbishop of Canterbury, made headlines in the U.K. recently for at the Trades Union Congress conference in Manchester, England.

His remarks were forcefully pro-union and strongly disapproving of corporations, the profit motive and the wealthy.

He singled out Amazon for not paying their fair share of taxes in the U.K. and the gig economy as a 鈥渞eincarnation of an ancient evil.鈥

To the archbishop, capitalism, with its pursuit of profit and inequality of outcomes, is inherently immoral.

Other religious leaders have, over the years, made similar points. In 2015, Pope Francis and the pursuit of money and, in 2008, the then-archbishop of Canterbury, Rowan Williams, wrote an article for a British magazine in the wake of the financial crisis.

Such negative views of business and profit are hardly uncommon.

A recent article in the Journal of Personality and Social Psychology documented widespread .

In my research with some of my graduate students, I have found that people often take a dim view of businesses, interpreting many different actions 鈥攕uch as a or a 鈥 as an attempt to take advantage of consumers.

Viewed as conscious entities

But what underlies these views? Why is business and the pursuit of profit so maligned?

We think the answer lies, in part, in how people view firms and the resulting inferences they draw from the attempts of these firms to make a profit. To the first point, people seem to view companies as conscious entities 鈥 as living, breathing organisms with thoughts, feelings, intentions and motives.

has found that patterns of neural responses when considering other people鈥檚 mental states () are indistinguishable from the pattern of responses when considering the behaviour of organizations.

What this means is that people are likely to attribute distinctly human motives to business actions that are the product of entirely different processes.

In addition to viewing companies as people, consumers often view their transactions with firms as zero-sum 鈥 like sharing a pie, where more for one person means less for the other. This means that when companies are perceived to be making a profit, that profit is viewed as coming at the expense of customers.

Distrust of profitable firms

This is where profiting becomes problematic. Because we mentally view firms as people, this is seen as a wilful act 鈥 a deliberate attempt to take advantage of customers 鈥 and it violates an important norm of interpersonal conduct, a moral norm even, that forbids benefiting at another鈥檚 expense.

We have found that a wide range of actions by businesses appears to be interpreted in this light: price increases, , product recommendations and even advertisements.

Even when people don鈥檛 buy goods or services from a company, and therefore no profit is made, perceptions that a firm tried to profit lead to negative responses.

Even sales clerks are suspect

In one extreme example, we found that even when a salesperson recommended the cheaper of two alternatives, customers still assumed it was to benefit at their expense.

Our research has not yet investigated how firms can mitigate such reactions or whether they even can. If our results are anything to go by, some readers may think that these are legitimate reactions that should not be curtailed.

However, we would point out that a purchase is a consumer decision. No company is forcing consumers to buy their products against their will.

What鈥檚 more, businesses bear the burden of the risk in offering products for consumers鈥 consideration; the products that they make available to us are often a tremendous source of value in our lives; and, ultimately, the only reason companies develop and offer such products is to make a profit. Otherwise, what would be the point of going into business?The Conversation

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Laurence Ashworth is an associate professor in marketing at the Smith School of Business.

This article was originally published on , which provides news and views from the academic and research community. Queen鈥檚 University is a founding partner. Queen's researchers, faculty, and students are regular contributors.

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