Companies are Villains with Good True Selves

Zarema Khon, Julian De Freitas and Samuel G. B. Johnson
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Zarema Khon: Nazarbayev University, Graduate School of Business
Julian De Freitas: Harvard Business School
Samuel G. B. Johnson: University of Waterloo

No 2026/07, Working Papers from Nazarbayev University, Graduate School of Business

Abstract: People hold negative views of companies. Yet, in ten studies (N=4,219), we document an apparent paradox: Despite these negative stereotypes, people believe that at their core, companies are comprised of morally good traits. We explain this apparent contradiction by distinguishing between company behavior versus identity: while people expect companies to behave badly, they view them as essentially good. We document this effect in the context of behavior change - we find that people believe a company's identity is lost more after morally deteriorating (going from good to bad) than after morally improving (going from bad to good). This moral asymmetry is resilient to different types of company industries and company sizes, and is rooted in psychological essentialism rather than loss aversion or social desirability bias. In short, companies are villains-but only in flesh, not bone.

Keywords: psychological essentialism; corporate identity; moral judgment; lay theories of organizations; ethical change; stakeholder perceptions (search for similar items in EconPapers)
Pages: 47 pages
Date: 2026-05
New Economics Papers: this item is included in nep-cbe
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