Procedural Justice and the Risks of Consumer Voting

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Procedural Justice and the Risks of Consumer Voting This article was downloaded by: [206.253.207.235] On: 21 September 2020, At: 13:29 Publisher: Institute for Operations Research and the Management Sciences (INFORMS) INFORMS is located in Maryland, USA Management Science Publication details, including instructions for authors and subscription information: http://pubsonline.informs.org Procedural Justice and the Risks of Consumer Voting Tami Kim, Leslie K. John, Todd Rogers, Michael I. Norton To cite this article: Tami Kim, Leslie K. John, Todd Rogers, Michael I. Norton (2019) Procedural Justice and the Risks of Consumer Voting. Management Science 65(11):5234-5251. https://doi.org/10.1287/mnsc.2018.3181 Full terms and conditions of use: https://pubsonline.informs.org/Publications/Librarians-Portal/PubsOnLine-Terms-and- Conditions This article may be used only for the purposes of research, teaching, and/or private study. Commercial use or systematic downloading (by robots or other automatic processes) is prohibited without explicit Publisher approval, unless otherwise noted. For more information, contact [email protected]. The Publisher does not warrant or guarantee the article’s accuracy, completeness, merchantability, fitness for a particular purpose, or non-infringement. Descriptions of, or references to, products or publications, or inclusion of an advertisement in this article, neither constitutes nor implies a guarantee, endorsement, or support of claims made of that product, publication, or service. Copyright © 2019, INFORMS Please scroll down for article—it is on subsequent pages With 12,500 members from nearly 90 countries, INFORMS is the largest international association of operations research (O.R.) and analytics professionals and students. INFORMS provides unique networking and learning opportunities for individual professionals, and organizations of all types and sizes, to better understand and use O.R. and analytics tools and methods to transform strategic visions and achieve better outcomes. For more information on INFORMS, its publications, membership, or meetings visit http://www.informs.org MANAGEMENT SCIENCE Vol. 65, No. 11, November 2019, pp. 5234–5251 http://pubsonline.informs.org/journal/mnsc ISSN 0025-1909 (print), ISSN 1526-5501 (online) Procedural Justice and the Risks of Consumer Voting Tami Kim,a Leslie K. John,b Todd Rogers,c Michael I. Nortonb a University of Virginia Darden School of Business, Charlottesville, Virginia 22901; b Harvard Business School, Boston, Massachusetts 02163; c Harvard Kennedy School, Cambridge, Massachusetts 02138 Contact: [email protected], http://orcid.org/0000-0002-4438-5227 (TK); [email protected], http://orcid.org/0000-0002-0928-6493 (LKJ); [email protected] (TR); [email protected] (MIN) Received: December 7, 2016 Abstract. Firms are increasingly giving consumers the vote. Eight studies show that, when Revised: February 28, 2018 firms empower consumers to vote, consumers infer a series of implicit promises—even in the Accepted: July 28, 2018 absence of explicit promises. We identify three implicit promises to which consumers react Published Online in Articles in Advance: negatively when violated: representation (Experiments 1A–1C), consistency (Experiment 2), September 18, 2019 and nonsuppression (Experiment 3). However, when firms honor these implicit promises, https://doi.org/10.1287/mnsc.2018.3181 voting can mitigate the disappointment that arises from receiving an undesired outcome (Experiment 4). Finally, Experiment 5 identifies one instance when suppressing the vote Copyright: © 2019 INFORMS outcome is condoned: when voters believe that the process of voting has resulted in an unacceptable outcome. More generally, we show that procedural justice plays a key mediating role in determining the relative success or failure of various empowerment initiatives—from soliciting feedback to voting. Taken together, we offer insight into how firms can realize the benefits of empowerment strategies while mitigating their risks. History: Accepted by Elke Weber, judgment and decision making. Supplemental Material: The e-companion is available at https://doi.org/10.1287/mnsc.2018.3181. Keywords: consumer empowerment • voting • procedural justice • implicit promises 1. Introduction Voting is a form of consumer empowerment when An increasingly popular strategy used by firms in an firms involve consumers in decision-making processes. attempt to strengthen relationships with their stake- Firms have good reason to believe that empowering holders is to allow customers to vote on decisions once consumers will confer benefits. For example, soliciting made by managers. For example, Audi allowed con- consumer input can help firms to better align prod- sumers to vote on the ending of its 2013 Super Bowl uct offerings with consumers’ needs and wants, hence advertisement, a $4 million investment. Similarly, the reducing product development costs and increasing movie franchise Sharknado created buzz by allowing speed to market (Prahalad and Ramaswamy 2000, consumers to vote on whether its main character should Ogawa and Piller 2006). In addition, involving con- live or die in its upcoming movie (fans spared her life). sumers in the product development process can in- The Cheesecake Factory and Lay’s allowed customers to crease the perceived value of resulting products (Franke vote on new flavors, resulting in Stefanie’sUltimateRed et al. 2009,Ramaswamy2009,Moreauetal.2011, Velvet Cheesecake in 2010 and Southern Biscuits and Norton et al. 2011, Buechel and Janiszewski 2013). Gravy chips in 2015. Firms have also begun to routinely Beyond these direct economic benefits, recent research let consumers vote on more critical issues: the Seattle also suggests that consumer empowerment initiatives Sounders—a Major League Soccer team—allows its provide psychological benefits that enhance consumer- season ticket holders to vote every four years on firm relationships—whichinturn,cantranslateinto retaining the team’s general manager, and a popular greater economic benefits. For example, when consumers T-shirt company, Threadless, determines most of its are involved in selecting new product offerings, they productofferingsbyconsumervote.Thelistofsuch experience stronger feelings of ownership over those voting initiatives is vast and includes many of the products (Franke et al. 2009). Moreover, voting in par- most recognizable brands: Pepsi allowed consumers ticular has been shown to increase consumers’ loyalty to vote on charitable initiatives in the Pepsi Refresh toward the firm (Fuchs et al. 2010). Project in 2010, and the National Football League Although this previous research suggests that em- (NFL) has been allowing its fans to vote for the most powering consumers leads to positive consequences, we valuable player (MVP) since 2001. Given the in- document the importance of recognizing its potential creasing number of firms that are offering consumers downfalls. Voting comes with (at least) three risks derived opportunities to vote, we seek to offer insight into the from a set of implicit promises—practices that consumers rewards and attendant risks of consumer voting. expect firmstofollowevenintheabsenceofexplicit 5234 Kim et al.: Procedural Justice and the Risks of Consumer Voting Management Science, 2019, vol. 65, no. 11, pp. 5234–5251, © 2019 INFORMS 5235 promises—that voting makes. First, introducing vot- to ignore the clear will of the users will be your ing implies that the firm will not suppress the outcome downfall” (Facebook user 2012). Note critically that the of the popular vote; but what if voters choose options many firms that never offer users the opportunity to that firms do not prefer? Consider, for example, the vote are not criticized by consumers for not offering that negative reactions to the National Environmental Re- opportunity; in contrast, we suggest that offering the search Council (NERC) during the naming of the United vote but then removing it can lead to worse perceptions Kingdom’s new polar research ship. The organization of the firm by consumers than never having offered the allowed the general public to submit name sugges- vote at all, further evidence of consumers’ inferences of tions and vote on them. To the chagrin of the NERC, the implicit promises made by firms that offer voting the winning vote was “Boaty McBoatface,” leading and their rage at those promises being broken. the NERC to promptly override it with the name “Sir These implicit promises engendered by voting make David Attenborough.” Although the NERC likely thought it a source of risk, but at the same time, meeting those it well within its rights to override the vote outcome, the promises may lead to more positive consumer per- “Sir David Attenborough” decision generated a great deal ceptions. How can firms reap the potential consumer of public backlash (Hyatt 2016)—suggesting that it had relationship benefits of voting while mitigating its violated consumers’ expectations of the way that voting risks? We answer this question by developing a the- should be carried out. oretical account that explains when and why con- Second, another risk arises from the manner in which sumers react negatively to firm voting initiatives. We some firms implement voting to insure themselves against argue that allowing consumers to vote elicits a pre- having to honor unwanted outcomes: weighting cus- dictable set of beliefs about the way that the voting tomer votes versus managers’ preferences differently. process should unfold, such that when these beliefs are For instance, in the
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