Our moral judgements are not so robust and consistent as we might think. In 2018, a group of managers at the non-profit organization Oxfam were accused of organizing sex parties in Haiti. In 2005, a group of managers of the for-profit organization Volkswagen were also accused of having committed the same deed in Germany. Both in the Oxfam and in the Volkswagen case, the organizations took action and the employees in question were fired.

However, the public response to the same wrongdoing differed substantially between the companies. Oxfam’s products were boycotted by former supporters, donations plummeted and brought the organization to the verge of collapse, while Volkswagen did not face boycotts or decreased sales as a result of the scandal. This shows that even when people obviously act immorally, the public’s moral judgements are not consistent, determining whether we act or let go. In ongoing research we investigate the reason why employees of non-profit societal engaged organizations are judged harsher. Our results suggest that people link the type of organization with moral stereotypes.

Moral Stereotypes

If you think of a person that works for a non-profit organization, would you consider this person to act more morally than someone from a for-profit organisation? Chances are that the answer would be “yes”. Indeed, previous research has shown that non-profit organizations are generally perceived as more moral than for-profit organizations (Aaker, 2010) and, consequently, their employees will be also stereotyped as more moral. Non-profit organizations and their employees enjoy the benefits of this effect, as they are more liked and trusted by others by default. However when things go wrong and they commit a moral transgression as in the example above, the effect backfires and results in sharper reactions from others.

In our research we find that positive moral stereotypes also increase people’s expectations of organizations and individuals. People generally hold employees of non-profit organizations to higher moral standards and expect them to behave according to their expectations. In turn, when employees commit moral transgressions, the difference between what is expected of them and how they actually act is greater for employees of non-profit organizations compared to employees of for-profit organizations, leading to harsher judgments and reactions from the public.

In sum, Oxfam’s employees were stereotyped as moral and therefore expected to also behave morally by default. Expectations regarding their morality and behaviour were higher compared to Volkswagen’s employees. In turn, even though the employees’ behaviours in both companies were similar, the public experienced the Oxfam scandal as more severe and reacted with a sharper response when employees failed to live up to expectations.

Implications

For non-profit organizations these findings are important as they contribute to societal development in multiple ways (Flynn & Hodgkinson, 2002). However, they are more vulnerable in case of scandals compared to for-profit organizations, which do not face increased expectations of morality. In addition, non-profit organizations do not seem to be fully aware which moral standards they and their employees are judged against, resulting in backlash effects that severely damage the organizations ability to benefit society. This, of course, does not alleviate for-profit organisations from guarding their moral behaviour, in particular when they are trusted.

Identifying stereotypes and their following expectations presents a new challenge for reputation management of organizations.

Peer Stiegert (p.stiegert rug.nl) is a PhD candidate at the Department of Human Resource Management & Organizational Behavior, Faculty of Economics and Business, University of Groningen, researching public perception of organizations.

References:

Aaker, J., Vohs, K. D., & Mogilner, C. (2010). Nonprofits are seen as warm and for-profits as competent: Firm stereotypes matter. Journal of Consumer Research, 37(2), 224-237.

Flynn, P., & Hodgkinson, V. A. (2002). Measuring the contributions of the nonprofit sector. In Measuring the impact of the nonprofit sector (pp. 3-16). Springer, Boston, MA