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Corporate Digital Responsibility & Consumer Privacy
Digitization, artificial intelligence (AI), and service robots will revolutionize virtually all service industries and have the potential to bring unprecedented improvements in customer experience, service quality, and productivity. However, these technological advances also carry serious ethical, fairness, and privacy risks. To explore these risks, this article builds on recent work on corporate digital responsibility (CDR). First, it uses a life-cycle stage perspective of data and technologies (i.e., their creation, operation, refinement, and retainment) as an organizing frame to better understand these risks. Second, to provide insights on where these risks originate, it examines an organization’s business model and its flows of money, service, data, insights, and technologies with customers at the front-end and the business partner ecosystem at the back-end. Third, this article identifies why CDR issues occur. It shows that trade-offs between good CDR practices and five organizational objectives and motivations are key underlying causes (e.g., incremental sales can be achieved with better data and analytics but carry a gamut of privacy, fairness, discrimination and psychological risks). Finally, this article proposes a set of strategies, tools and practices managers can use to address these trade-offs and build a CDR-strong service organization.
We use the Power-Responsibility Equilibrium (PRE) framework and advance that consumers balance perceived deficits in privacy protection by power holders (businesses and regulators) with defensive actions. In our model, consumer privacy concern is the endogenous mediating entity linking business policy and regulatory perceptions to negative online user responses. The model was empirically tested and confirmed in an experimental setting. In a second study, we added the nature of consumer information involved into a sub-model. Here, we investigated the moderating role of information sensitivity and congruency on the business policy-concern relationship across three industry contexts. Both hypothesized two-way interactions were confirmed, suggesting that a strong business policy is effective in reducing concern when low sensitivity data are gathered, but insufficient in reducing concern for highly sensitive data. Furthermore, concern increased dramatically when sensitive data were collected that were incongruent with the business context.
Purpose – Past research on internet privacy has examined various aspects of privacy regulation and consumer privacy concerns. The purpose of this paper is to develop a conceptual model that links anteceding environmental factors with the resulting consumer responses using the power-responsibility equilibrium perspective. Design/methodology/approach – An online survey of 182 net shoppers was conducted whereby respondents were asked to recall a recent web site registration that required them to provide personal information online. Findings – The results indicate that robust perceived business policies and governmental regulation reduce consumer privacy concern. More interestingly, the data show that a perceived lack of business policy or governmental regulation will result in consumers attempting to regain power balance through a variety of responses. As predicted, increased concern resulted in higher power-enhancing responses such as the fabrication of personal information, use of privacy-enhancing technologies and refusal to purchase. Practical implications – To reduce consumer privacy concern and subsequent negative responses, organizations need to pay close attention to their privacy policies through greater self-regulation, third-party accreditation and to ensure the presence of compliance mechanisms that support and check the marketing and collection activities of their organization and related parties. Regulators can reduce consumer concern by further defining and improving the legal framework for protecting consumer privacy on the internet. In addition, governments should consider overseeing third-party privacy accreditation as well as firm and industry self-regulation. Finally, to improve consumer perceptions of privacy protection, enhanced regulatory privacy protection should be communicated to the public along with a response outlet for privacy concerns so that consumers know that they should report privacy-related complaints to a regulatory agency. Originality/value – The paper examines how business policies and regulation influence consumer online privacy concern, and the resulting consequences on internet user behavior.
ABSTRACT Relationship marketing typically requiresorganizations to continually collect customer information. Two distinct approaches co-exist to encourage customers to disclose information: reducing privacy concern and building trust, which in the past have been examined in isolation. In the present study, Regulatory Focus Theory was used to integrate both approaches and examine their distinct response behaviors concurrently. The findings were robust across two studies with different methods,and contexts. As