TOO MORAL TO BE TRUE

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TOO MORAL TO BE TRUE

THE EFFECTS OF CORPORATE MORAL HYPOCRISY ON MORAL OUTRAGE AND RETRIBUTIVE BEHAVIOUR IN DIFFERENT INDUSTRIES

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TOO MORAL TO BE TRUE

THE EFFECTS OF CORPORATE MORAL HYPOCRISY ON MORAL OUTRAGE AND RETRIBUTIVE BEHAVIOUR IN DIFFERENT INDUSTRIES

June 2016

TIM BOUWMAN University of Groningen Faculty of Economic & Business

MSc Marketing Master thesis

June 2016 Abel Tasmanstraat 19a

9726 EG Groningen tel.: 06-83792955 e-mail: timbouwman123@hotmail.com Studentnumber: 2346877 1st Supervisor: dr. M.C. Leliveld 2nd Supervisor: dr. J. Wan

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ABSTRACT

This thesis investigated the effects of different kinds of hypocrisy on moral outrage and retributive behaviour on a corporate level. Specifically, we hypothesized that consumers can perceive a company as either component or moral and that inconsistency between the perception (moral vs. competent) and the framing of the company (moral vs. pragmatic) will lead to different kinds of hypocrisy. These different kinds of hypocrisy will have their own and different effects on moral outrage and retributive behaviour. The results showed only a significant effect for moral hypocrisy, a moral framing and a competent perception. Moral hypocrisy leads to an increase in moral outrage and retributive behaviour; behavioural intention, perceived quality, turnover intention and negative word-of-mouth. We also found an indirect effect of moral hypocrisy on retributive behaviour through moral outrage. No differences were found across industries (oil & fashion).

KEYWORDS: moral hypocrisy, retributive behaviour, moral outrage, company perception & company framing.

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1. TABLE OF CONTENT ABSTRACT ... 2 1. TABLE OF CONTENT ... 3 2. INTRODUCTION ... 4 3. LITERATURE REVIEW ... 7 3.1MORAL OUTRAGE ... 7 3.2RETRIBUTIVE BEHAVIOUR ... 8

3.3EFFECTS ACROSS INDUSTRIES ... 9

3.4CONCEPTUAL MODEL ... 10 4. RESEARCH DESIGN ... 11 4.1PROCEDURE ... 11 4.2MORAL OUTRAGE ... 11 4.3RETRIBUTIVE BEHAVIOUR ... 11 4.3.1 Word-of-Mouth ... 12 4.3.2 Behavioural Intention ... 12 4.3.3 Perceived Quality ... 12 4.3.4 Turnover Intention ... 12 5. RESULTS ... 13 5.1SAMPLE ... 13 5.2MANIPULATION CHECK ... 13 5.3CONTROL VARIABLES ... 14 5.3.1 Gender ... 14 5.3.2 Age ... 14 5.3.3 Education ... 15 5.4HYPOTHESIS1 ... 15 5.5HYPOTHESIS2 ... 16 5.6HYPOTHESIS3 ... 19 5.7HYPOTHESIS4 ... 20 6. DISCUSSION ... 21

7 LIMITATIONS & IMPLICATIONS ... 24

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2. INTRODUCTION

More and more companies are using Cooperate Social Responsibility (CSR) to enhance financial and reputational benefits (Skarmeas & Leonidou, 2013); increase brand loyalty (Moon, Lee & Oh, 2015), enhance behavioural intention (Chatzoudes, Papadopoulos, & Dimitriadis, 2015), increase firm value and decrease cost of capital and volatility of stock return (Harjoto & Jo, 2015). However, media are at the same time increasingly informing consumers about corporate misfeasance, misconduct and wrongdoing. Examples are the big oil spill in the Gulf of Mexico by BP in 20101_{and more recent (2015) the “Dieselgate” at} Volkswagen where Volkswagen deliberately altered the exhaust emissions tests2_{. This is all} leading to an increase in scepticism about CSR (Skarmeas & Leonidou, 2013). We define scepticism as the tendency to disbelief and to doubt a marketing communication claim (Obermiller & Spangenberg, 1998). Scepticism can hurt the company in multiple ways and will lead to retributive actions (Guapta & Pirsch, 2006); decreasing equity, negative word-of-mouth and enhance sensitivity for negative information (Skarmeas & Leonidou, 2013). The effects of scepticism are clear and can hurt a company even when the company has good intentions, but what would be the effect of hypocrisy? The effects of scepticism will always be there, because consumers are even sceptical about the truth. With hypocrisy, consumers observe the inconsistency between what a company says they will do and what they are actually doing. We define hypocrisy as the inconsistency between the assertion and the execution of a claim (Wagner, Lutz & Weitz, 2009). Imagine a company saying that they want to help the farmers in the third world by giving them work, education and fair pay. However, in fact they use child labour and pay as little as possible. Or, in the case of Volkswagen, claiming to have an environmental friendly engine when in reality, this is not the case. In these situations the companies are hypocritical by claiming they are moral, but in reality displaying the opposite. To conclude, hypocrisy is all about the perceived inconsistency about what is said and what is done and scepticism is only the distrust in what is claimed. The situations mentioned above are examples what we refer to as moral hypocrisy: claiming to be moral but in reality only pretending to be, i.e. moral window-dressing. Of course the opposite could also occur: a company claiming to be competent and focused on cost and sales, but in reality are mainly moral. This will lead to non-moral hypocrisy as further explained below. We propose that hypocrisy arises when there is perceived

1_{http://ocean.si.edu/gulf-oil-spill}

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inconsistency between the perception that the consumer has about the company and the way a company positions itself and their campaigns. There is no prior research in this field about the effects of the different kinds of hypocrisy, therefore this paper will start examine this phenomenon.

As stated above we believe the different kinds of hypocrisy arise when there is inconsistency between the perception and the framing of a company. At first we will focus on the perception of the company: companies are judged the same way as people, alongside the dimensions of competence and warmth i.e. morality (Aaker et al., 2010, 2012; Fiske et al., 2002). In this case competence stands for the effective capacity to reach goals. People who display morality, and are consequently seen and perceived as moral, conform to moral codes and are motivated to help others (Aaker et al., 2010). Companies are judged the same way as people and therefore we argue that companies are seen and perceived as either moral or competent.

The company framing also contains of 2 dimensions. A company can frame their campaigns and actions alongside the dimensions of moral and pragmatic i.e. competent. From this moment on we will only use the term competent. A moral company will act in the best interest of the society and the environment. While a competent company acts in best interest of their stakeholders according to Kreps & Monin (2011). Competent companies will try to increase profit and value for the traditional stakeholders (shareholders, customers, employees and suppliers). Moral companies will go beyond traditional stakeholders and act in best interest of all the environment and society. However, research showed that companies are trying to let consumers think they are operating in best interest of the environment and society. They frame their actions in moral terms, but in reality these companies are only acting in their own best interest and focussing on profit (Bronn & Vrioni, 2001). Furthermore, even when a company is behaving charitable i.e. moral but also benefits from behaving this way will result in a decrease in behavioural intention (e.g. purchase intention) (Newman & Cain, 2014). Newman & Cain (2014) call this tainted altruism; benefiting personally from behaving moral. In our research companies are not really acting moral, however they are trying to convince the consumer they are moral in order to benefit personally from it.

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hypocrisy (see table 1). Moral hypocrisy will arise when a company frames their actions as moral, but are seen as competent (c.f. Volkswagen case discussed earlier) and non-moral hypocrisy will show when a company frames themselves as competent, but is perceived as moral. What will be the consequences of these inconsistencies? And how different will moral hypocrisy be related to non-moral hypocrisy?

TABLE 1

Different Types of Hypocrisy

Existing literature stresses the importance of scepticism because it can hurt the company: increasing negative affective behaviour i.e. moral outrage (Kleef et al. 2015; Müller & Guas, 2015) and increasing retributive behaviour (Gupta & Pirsch, 2006; Laurent et al. 2014). Consumers want to get back at companies that treat them wrong (Fu et al. 2004; Henning-Thurau et al. 2004). In this study we will research which effects will arise with the different kinds of hypocrisy. We will also investigate if there are differences between pragmatic and moral companies when there is no hypocrisy in place (competent & pragmatic and moral & moral). At last we will look whether our results are generalizable between industries. Are the effects and the consequences of hypocrisy the same across industries? Companies in environmental sensitive industries are feeling more pressure regarding CSR compared to other industries (Bertels & Peloza, 2008). In this paper we will see if the same holds for hypocrisy. Will companies competing in the environmental industry face more negative effects for behaving hypocritical? The above-mentioned literature contributed to the following research question:

“What will be the effects of different types of hypocrisy on moral outrage and

retributive behaviour, and how is that different depending on the type of industry?”

Campaign Framing

Pragmatic Moral

Company perception Moral 2. Non-moral hypocrisy 3. No hypocrisy

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3. LITERATURE REVIEW 3.1 Moral Outrage

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2013). Combining these results with the studies of Laurent et al. (2014), Müller & Guas (2015) and Van Kleef et al. (2015) we expect the following to be true:

H1: Inconsistencies between the framing of a company and the perception of a company by consumers (hypocrisy) will lead to moral outrage with a stronger effect for moral hypocrisy than non-moral hypocrisy on moral outrage.

3.2 Retributive Behaviour

Research of Fu et al. (2004) and Henning-Thurau et al. (2004) showed that consumers whom are mistreated by companies want some kind of retaliation i.e. they want to get back at the company that treated them wrong. Consequently, consumers will participate in retributive behaviour after mistreatment. Gupta & Pirsch (2006) found in their research on consumer scepticism the following retributive actions: product switching, participating in negative word-of-mouth (WOM), refusing to work for the company and refusing to invest in the company. Fu et al. (2004) also found that after a negative shopping experience, consumers are more willing to speak out against the company. They will participate in negative word-of-mouth online (eWOM). Other retributive actions are a decrease in perceived quality and a decrease in purchasing intention (Müller & Gaus, 2015). The research of Müller & Gaus (2015), discussed above, found that the first group, which watched the organic food documentary, reported lower perceived quality and a lower behavioural intention (purchase intention) towards organic food compared to the control group. In the experiments of Laurent et al. (2014) the crimes committed in the high hypocrisy conditions were punished significantly harder than the crimes committed in de low hypocrisy condition. Our study will built upon this work by disentangling the effects of the different kinds of hypocrisy, and by mainly focus on retributive actions by consumers rather than punishment by law. Combining the above with the study of Laurent et al. (2014) leads to our second hypothesis: consumers will participate in more retributive behaviour when there is hypocrisy in place. Specifically, we expect that moral hypocrisy will lead to even more retributive behaviour compared to non-moral hypocrisy.

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Concerning our first two hypotheses we believe consumers will appreciate honesty. Therefore no extra effects are expected when there is consistency between the framing and the perception of the company (no hypocrisy).

Interestingly, Laurent et al. (2014) showed that in the high hypocrisy conditions an increase in moral outrage directly lead to an increase in punishment. A study of Galeotti (2015) also found a relation between negative emotions i.e. moral outrage and punishment. Participants can earn income with individual tasks in an economic game setting and take income from other participants. Participants, from whom income was taken, can respond with punishment. By destroying one’s own income, the player punishes the ‘taker’. Galeotti (2015) found that contempt was the only negative emotion that explained punishment with low take rates. However when take rates increased they found that items of moral outrage as anger, irritation and contempt lead to a higher punishment i.e. sacrificing own income. Translated to our study we expect moral outrage will increase when hypocrisy is in place and therefore retributive actions will increase.

H3: Except for the direct effect of hypocrisy on retributive behaviour we also expect an indirect effect of hypocrisy on retributive behaviour through moral outrage

3.3 Effects Across Industries

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pressure regarding CSR than companies in different industries like banking and retailing. The managers of these companies say this is because (1) when a problem occurs at a company the whole industry is blamed, (2) problems in the environmentally sensitive areas are enormous issues for the whole society and (3) the media is heavily reporting about environmental disasters (Bertels & Peloza, 2008). Therefore we argue that consumers of companies competing in the environmental sensitive industries (like oil and gas, power generation and utility) might be more sensitive for moral outrage and retributive behaviour than consumers of companies competing in non-environmental sensitive industries (like fashion, banking and retail) when confronted with hypocrisy.

H4: The effects of different kinds of hypocrisy on retributive behaviour and moral outrage will be stronger for companies competing in the environmental sensitive industries compared to companies competing in non-environmental sensitive industries

3.4 Conceptual Model

The examined literature generated the following conceptual model (see figure 1). The inconsistency between company framing and company perception will lead to an increase in moral outrage and retributive behaviour.

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4. RESEARCH DESIGN 4.1 Procedure

To test the effects from different types of hypocrisy on moral outrage and retributive behaviour, participants were required to complete an online survey. The experiment contained of a between-subjects design to avoid carryover effects that could occur with a within-subjects design. Our experiment consisted of a 2x2x2 design, with Campaign Framing (moral vs. pragmatic), Company Perception (moral vs. competent) and Industry (fashion vs. oil). The three dimensions all contain of two conditions, as displayed in the table below (see table 2). Before starting the online survey respondents would first had to read a story about the adjusted mission statement of Company X for the upcoming years (company framing) and the company behaviour of Company X in the past six months (company perception) in either the fashion industry, or the oil industry. Respondents were randomly assigned to one of the eight conditions. For instance a respondent confronted with non-moral hypocrisy in the fashion industry will see a pragmatic mission statement, with moral company behaviour of a company competing in the fashion industry.

TABLE 2 2x2x2 Experiment Mission Statement Pragmatic Moral Company Behaviour Moral Fashion Oil Fashion Oil Competent Fashion Oil Fashion Oil 4.2 Moral Outrage

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4.3 Retributive Behaviour

We measured retributive behaviour using our own created 9-item measure, which included: “I value the way X conducts its business” and “I would invest in shares of X” (1 =

Strongly disagree; 7 = Strongly agree).

Except for a general concept of retributive behaviour, we also measured the concepts that make up retributive behaviour more specifically, like word-of-mouth and turnover intention (discussed below). Afterwards all retributive behaviour variables were transformed, so an increase in score equals an increase in retributive behaviour.

4.3.1 Word-of-Mouth

We measured positive word-of-mouth using the Srinivasan, Anderson & Ponnavolu (2002) 3-item measure, which included: “I would say positive things about X to other people” (1 = Very unlikely; 7 = Very likely).

4.3.2 Behavioural Intention

We measured behavioural intention using the 3-item measure of Fred (1989), including: “I would intent to continue using the products of X” (1 = Strongly disagree; 7 =

Strongly agree).

4.3.3 Perceived Quality

We measured perceived quality using the 4-item measure of Yoo & Donthu (2001), which included: “This product will be of high quality” and “The expected quality of this product is extremely high” (1 = Strongly disagree; 7 = Strongly agree).

4.3.4 Turnover Intention

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TABLE 3 Cronbach’s Alphas

Measured Constructs Number of Items Cronbach's Alpha

Moral Outrage 7 0.971 Retributive Behaviour 9 0.908 Word-of-Mouth 3 0.977 Behavioural Intention 3 0.982 Perceived Quality 4 0.880 Turnover Intention 2 0.703 Total Retributive Actions 21 0.900

5. RESULTS 5.1 Sample

The sample consisted of 422 participants. The respondents were asked to take part in a 3-minute study for which they earned $0.45 for their efforts. 18 participants failed on the attention check and were deleted. Moreover, a pilot study showed it took 14 seconds on average to read the manipulation (N = 16, M = 14.31, SD = 4.29) and therefore 53 participants who took less than 10 seconds to read the manipulation were eliminated, leaving 351, mostly American, adults from MTurk (186 males (53%) and 165 females (47%); M = 38.19, SD = 11.41).

5.2 Manipulation Check

In order to analyse our manipulation check, we performed a 2 (moral mission statement vs. competent mission statement) x 2 (moral company behaviour vs. competent company behaviour) ANOVA on the mission statement manipulation check and a 2 (moral mission statement vs. competent mission statement) x 2 (moral company behaviour vs. competent company behaviour) ANOVA on the company behaviour manipulation check.

At first we investigated the mission statement manipulation check. We found only a significant main effect of mission statement on the mission statement manipulation check,

F(1, 347) = 334.439, p = 0.000. A moral mission statement lead to a higher perceived moral

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2.99 SD = 1.79). The main effect of company behaviour was not significant, F(1, 347) = 0.117, p = 0.733. The same holds for the interaction effect, F(1, 347) = 1.668, p = 0.197. Thus we can conclude that the manipulation concerning mission statement is significant and only the mission statement influences how the mission statement is perceived.

Secondly, we studied the company behaviour manipulation check. We found the following results: only the main effect of company behaviour was significant F(1, 347) = 294.291, p = 0.000. Moral company behaviour lead to higher perceived moral behaviour (M = 5.49 SD = 1.49) compared to competent company behaviour (M = 2.71 SD = 1.54). The main effect of mission statement, F(1, 347) = 2.524, p = .113, and the interaction effect, F(1, 347) = 0.703, p = 0.403, both proved to be not significant. Therefore we can conclude that the manipulation concerning company behaviour is significant and only influences how the company behaviour is perceived. Concluding, our manipulations influenced how participants perceived the mission statements and the company behaviours.

5.3 Control Variables

5.3.1 Gender

In order to analyse whether or not the average moral outrage of men is different from the average moral outrage of women, we performed an independent samples t-test with gender and moral outrage. The independent samples t-test was not significant, t(349) = -1.38, p = 0.276. The average moral outrage of men (M = 1.69, SD = 1.12) does not differ from the average moral outrage of women (M = 1.86, SD = 1.23). The same holds for retributive behaviour and gender, t(349) = 1.36, p = 0.068. The average retributive behaviour of men (M = 3.17, SD = 1.11) does not differ from the average retributive behaviour of women (M = 3.00, SD = 1.27).

5.3.2 Age

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5.3.3 Education

In order to analyse whether or not moral outrage differs per education level, we performed a One-way ANOVA of education level on moral outrage. This One-way ANOVA was not significant, F(4, 346) = 0.56, p = 0.695. The education level of the respondents does not influence their moral outrage. The same holds for education level on retributive behaviour, F(4, 246) = 1.11, p = 0.349.

We can conclude that none of our control variables affect our dependent variables and therefore we will not look at the control variables in our further analyses.

5.4 HYPOTHESIS 1

H1: Inconsistencies between the framing of a company and the perception of a company by consumers (hypocrisy) will lead to moral outrage with a stronger effect for moral hypocrisy than non-moral hypocrisy on moral outrage.

To test the first hypothesis and analyse the influence of the company framing and company perception on moral outrage, we performed a 2 (moral mission statement vs. competent mission statement) x 2 (moral company behaviour vs. competent company behaviour) x 2 (fashion industry vs. oil industry) ANOVA on moral outrage. A three-way ANOVA was conducted to filter out the variance that arises due to the industry setting. The main effects of mission statement and company behaviour proved to be significant. A moral statement leads to a higher moral outrage (M = 2.01) than a competent statement (M = 1.46),

F(1, 343) = 25.362, p = 0.000. Also, competent behaviour leads to more moral outrage (M =

2.04) than moral behaviour (M = 1.49), F(1, 343) = 20.578, p = 0.000. The main effect of industry was not significant at all, F(1, 343) = 0.246, p = 0.620. The same holds for the total interaction effect, F(1, 343) = 0.020, p = 0.888. The interaction effect of mission statement and company behaviour did appeared to be significant, F(1, 343) = 14.826, p = 0.000. Specific contrast analyses showed that with a competent mission statement, it does not really matter if there is moral or competent behaviour (M moral behaviour = 1.42 en M competent behaviour =

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(competent mission statement with moral behaviour) people do not experience more moral outrage, however when there is moral hypocrisy (moral mission statement with competent behaviour) there is a strong increase in moral outrage (see figure 2).

FIGURE 2

The Effect of Different Kinds of Hypocrisy on Moral Outrage

H2: Inconsistencies between the framing of a company and the perception of a company by consumers (hypocrisy) will lead to retributive behaviour with a stronger effect for moral hypocrisy than non-moral hypocrisy on retributive behaviour.

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Also the total interaction effect was not significant F(1, 343) = 0.103, p = 0.748. The main effects of mission statement and company behaviour were qualified by a significant interaction effect, F(1, 343) = 44.236, p = 0.000. Specific contrast analysis showed the same effect with retributive behaviour as with moral outrage (see figure 3). With a competent mission statement, it does not really matter if there is moral or competent behaviour (M moral behaviour = 2.98 en M competent behaviour = 2.70), F(1, 347) = 3.152, p = 0.077, η2 = 0.009.

Furthermore, with a moral mission statement, company behaviour does make a difference regarding retributive behaviour. Especially with competent behaviour there is increased retributive behaviour (M = 3.92, SD = 1.10) compared to moral behaviour (M = 2.67, SD = 1.01), F(1, 347) = 61.757, p = 0.000, η2 = 0.151.Therefore we come to the same conclusion as with the first hypothesis. Retributive behaviour increases in the case of moral hypocrisy, however there is no effect on non-moral hypocrisy.

FIGURE 3

The Effect of Different Kinds of Hypocrisy on Retributive Behaviour

The simple contrast analyses showed our hypothesis was partially true, therefore we analysed the specific items of retributive behaviour individually to see if we could find any different results than the ones mentioned above. The results can be seen in figure 4. To further investigate the effects of different kinds of hypocrisy on the individual items of retributive behaviour (word-of-mouth, behavioural intention, perceived quality and turnover intention) and to analyse whether or not the individual items of retributive behaviour differ per hypocrisy type we performed a Multivariate Analysis of Variance (MANOVA). The Wilk’s Lambda was used to interpret if the multivariate analyse was significant or not. We used the

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and therefore the multivariate analyse was significant, F(4, 344) = 12.99, p = 0.000. We can thus conclude that there are differences between the individual items of retributive behaviour with different kinds of hypocrisy. The univariate effects of the MANOVA showed that the strongest effects of moral hypocrisy emerges within negative word-of-mouth and the weakest with perceived quality (see table 4 and figure 4). Further, we noticed the same pattern with word-of-mouth, turnover intention and behavioural intention. Moral hypocrisy evokes the highest scores on retributive behaviour, than non-moral hypocrisy, followed by no hypocrisy (competent & competent) and lastly, with the lowest scores, no hypocrisy (moral & moral). However, this pattern does not hold for perceived quality. The no hypocrisy (moral & moral) condition evokes higher retributive behaviour compared to the competent condition with no hypocrisy (competent & competent)3_.

TABLE 4 MANOVA Results

Dependent Variable Hypocrisy Mean Std. Deviation Sig.

Negative Word-of-Mouth

No Hypocrisy MORAL & MORAL 3.25 1.65

0.000 Moral Hypocrisy 5.03 1.53

Non-Moral Hypocrisy 3.71 1.80 No Hypocrisy COMPETENT & COMPETENT 3.39 1.63

Behavioural Intention

Perceived Quality

Turnover Intention

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FIGURE 4

Cell Means for all Individual Retributive Behaviour Items

H3: Except for the direct effect of hypocrisy on retributive behaviour we also expect an indirect effect of hypocrisy on retributive behaviour through moral outrage

To test our third hypotheses and our whole model we conducted a moderated mediation using model 8 of Hayes (2013). Estimating the effect of mission statement on retributive behaviour directly as well as indirectly through moral outrage, with both the direct and indirect effect moderated by company behaviour with a percentile-based 95% bootstrap confidence interval. The conditional direct effect of the mission statement moderated by company behaviour on retributive behaviour was significant for both moral behaviour, t = 2.8412, p = 0.0048, CI [0.1232, 0.6777], as for competent behaviour, t = -4.7123, p = 0.0000,

CI [-0.9711, -0.3991]. The analyses further showed a significant effect for the interaction of

mission statement and company behaviour on our mediator, moral outrage: b = -0.8930,

t(347) = -3.8731, p = 0.0001, CI [-1.3465, -0.4395]. Also, a significant effect of our mediator

(moral outrage) on retributive behaviour showed, b = 0.5173, t(346) = 11.2930, p = 0.0000,

CI [0.4272, 0.6074]. However, the conditional indirect effect (mediated by moral outrage) of

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behaviour, however this is only significant in the competent company behaviour conditions. Thus, moral hypocrisy leads to an indirect increase in retributive behaviour through moral outrage.

H4: The effects of different kinds of hypocrisy on retributive behaviour and moral outrage will be stronger for companies competing in the environmental sensitive industries compared to companies competing in non-environmental sensitive industries

To test our fourth and final hypothesis and analyse the influence of the industry on moral outrage, we performed a 2 (moral mission statement vs. competent mission statement) x 2 (moral company behaviour vs. competent company behaviour) x 2 (fashion industry vs. oil industry) ANOVA on moral outrage. The main effect of industry was not significant F(1, 343) = 0.246, p = 0.620. Both main effects of mission and behaviour proved to be significant. A moral statement leads to a higher moral outrage for both industries (M Fashion = 2.00 and M Oil = 2.14) than a competent statement (M Fashion = 1.45 and M Oil = 1.46), F(1, 343) = 25.36, p

= 0.000. The same holds for competent behaviour (M Fashion = 1.94 and M Oil = 2.15) compared

to moral behaviour (M Fashion = 1.53 and M Oil = 1.45), F(1, 343) = 20.58, p = 0.000. The total

interaction effect was not significant F(1, 343) = 0.20, p = 0.888. The interaction effect of mission and behaviour appeared to be significant, F(1, 343) = 14.83, p = 0.000. However, in the cases with a competent mission statement there are almost no differences (see table 5), for fashion (M moral behaviour = 1.46 and M competent behaviour = 1.43) and the oil industry (M moral behaviour

= 1.38 and M competent behaviour = 1.56). Furthermore, the moral statement condition does make a

difference for fashion (M moral behaviour = 1.58 and M competent behaviour = 2.41) and oil (M moral behaviour = 1.54 and M competent behaviour = 2.65). We can therefore conclude that there are no

absolute differences between industries regarding the effects of mission statement and company behaviour on moral outrage.

The 2x2x2 ANOVA on retributive behaviour showed the same results: the main effect of industry was not significant at all, F(1, 343) = 0.000, p = 0.997. The main effects of behaviour and mission were significant, a moral statement leads to a higher retributive behaviour for both industries (M Fashion = 3.34 and M Oil = 3.29) than a competent statement (M

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behaviour (M Fashion = 3.37 and M Oil = 3.31) compared to moral behaviour (M Fashion = 2.76 and

M Oil = 2.88), F(1, 343) = 17.79, p = 0.000. The total interaction effect between industry,

mission and behaviour was not significant at all, F(1, 343) = 0.103, p = 0.748. The interaction effect of mission on behaviour was significant, F(1, 343) = 44.23, p = 0.000. In the moral and the competent statement conditions we see the same pattern for the industries. In the moral mission statement: fashion (M moral behaviour = 2.68 and M competent behaviour = 3.99) and oil (M moral behaviour = 2.64 and M competent behaviour = 3.85). In the competent statement: fashion (M moral behaviour = 2.87 and M competent behaviour = 2.71) and oil (M moral behaviour = 3.10 and M competent behaviour

= 2.68) as can be seen in figure 5 and table 5.

FIGURE 5 Cell Means per Industry

6. DISCUSSION

Our study was conducted to analyse what effects the different kinds of hypocrisy will have and how different moral hypocrisy is related to non-moral hypocrisy in different industries. Our research gave answer to the following research question:

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TABLE 5 2x2x2 ANOVA Results

Dependent Variable Hypocrisy Fashion Utility (oil) Sig.

Moral Outrage

Retributive Behaviour

Our study expected that consumers can perceive a company as either component or moral and that inconsistency between the perception and the framing of the company will lead to different kinds of hypocrisy. These different kinds of hypocrisy will have their own and different effects on moral outrage and retributive behaviour.

Our first two hypotheses, concerning moral outrage and retributive behaviour, showed the same results. The moral hypocrisy condition (moral company framing & competent company perception) evoked the greatest moral outrage and retributive behaviour. As expected no results were found in the consistent conditions: moral mission statement and moral behaviour does not have effect on moral outrage and retributive behaviour. The same holds for a competent mission statement and competent behaviour.

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Interestingly, results on specific items of retributive showed that moral hypocrisy had the largest effect on negative of-mouth. This could be explained by the fact that word-of-mouth is the most passive retributive behaviour of the four and therefore easier to participate in. The pattern of scores was the same for the individual items of retributive behaviour except for perceived quality. The moral consistent condition showed more retributive behaviour i.e. the quality was perceived poorer compared to the competent consistent condition. Consumers could expect that competent companies are better equipped to deliver higher quality compared to companies that are seen as more moral. We replicated the results of Aaker, et al. (2010), who found higher purchase intention amongst consumers when they rated the company as competent rather than warm i.e. moral. The fact that we replicated the results of Aaker, et al. (2010) indicates validation.

Our third hypothesis was not focused on the direct effects of hypocrisy, but at the indirect effects of hypocrisy on retributive behaviour through moral outrage. The results showed us that an increase in moral outrage does lead to an increase in retributive behaviour, however the previous ANOVA test showed only moral hypocrisy was significantly affecting moral outrage. Our moderated mediation of Hayes (2013) confirmed this. The PROCESS analyses did found an indirect effect of mission statement and company behaviour on retributive behaviour through moral outrage. However, this only holds in the competent company behaviour condition. These results show that when a company is participating in moral window-dressing they will not only suffer from direct negative effects, the company will also hurt from more retributive behaviour because of the indirect effect through moral outrage. We can therefore conclude that a company should only act moral if it comes from true intent. Pretending to be moral, to look good will only harm the company and evoke moral outrage among their consumers

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Finally, our research contributed to the existing literature by showing that firms are perceived differently and therefore can display different kinds of hypocrisy. Current research focused mainly on one type of hypocrisy: moral hypocrisy at a personal level (Watson & Sheikh, 2008; Laurent et al, 2014; Rustichini & Villeval, 2014; Van Kleef et al, 2015) or hypocrisy at a corporate level (Wagner, Lutz & Weitz, 2009; Fassin & Buelens, 2011; Shim & Yang, 2016), our research connects the two by proving companies are perceived differently and can therefore display different kinds of hypocrisy with different effects. Our research transfers results from the personal level on moral outrage (Laurent et al, 2014; Van Kleef et al, 2015) and retributive behaviour (Laurent et al, 2014; Galeotti, 2015) to the corporate level. Concluding, companies that are perceived as competent will not be affected negatively by acting inconsistently with their image. Non-moral hypocrisy will not lead to retributive behaviour or moral outrage towards a competent company. However, a moral company participating in moral hypocrisy will suffer the consequences of behaving inconsistently. Even more so due to the indirect effect of moral hypocrisy on retributive behaviour through moral outrage. As expected, consistency between company perception and company actions will have no effects regarding retributive behaviour and moral outrage. Consumers appreciate and value honesty and openness.

7 LIMITATIONS & IMPLICATIONS

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money to support your family and finding a new job can be difficult. This could be a nice starting point for further research. Will the same results hold when people go from passive, saying they will participate in retributive behaviour, to actively doing.

Our hypothesis about the differences in industries was not significant, however we did find some interesting remarks at the end of our survey. A couple of respondents mentioned at the ending that, however it was stated, they did not believe an oil company could have a moral statement our display moral behaviour. A potential problem of our research design is the absence of an item measuring perceived realism. Some participants stated they simply did not believe in the true intent of an oil company. This is in line with the findings of Bertels & Peloza (2008); managers in industries concerning environmental sensitive operations feel like they are under more pressure regarding CSR than companies in different industries. At first this looked promising, however it did not led to greater outrage or retributive behaviour. This could be because people think it is ‘normal’ for companies in environmental sensitive industries to behave the way they do. Consumers already expect an oil company cannot be moral and therefore they are not outraged by it. The stereotype of an oil company is so bad that consumers are not shocked when they window dress their activities. This would be an interesting starting point for further research. Moral window-dressing conditions can be created in increasing order (small vs. moderate vs. large) to see how far an oil company can go before it will face negative effects like moral outrage and retributive behaviour.

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