The Globe's roundup of research from business schools.
The next time you find yourself turning to online reviews before making a major purchase, a restaurant reservation or booking a trip consider this: Those recommendations may not be as trustworthy as you'd think.
Word of mouth has always played an important role in helping consumers make purchasing decisions. But with the rise of online review sites, blogs and social media, it's more ubiquitous than ever. "We think that the source of this information is always altruistic because [those who post it] don't have a profit motive, but the fact is they have other motives," says Grant Packard, assistant professor of marketing at Wilfrid Laurier University's School of Business and Economics in Waterloo, Ont. "They have their own selfish interests."
A study conducted by Dr. Packard and David Wooten, professor at the University of Michigan's Ross School of Business, found that those who feel less knowledgeable about a product are more likely to share their opinions with others than those who are satisfied with what they know. "It's a signal to themselves and other people that they are more knowledgeable than they think they are," Dr. Packard says. "Rather than having something to share, they have something to prove."
In four experiments, the authors asked participants to write online reviews of music, books and movies. In some cases the participants were encouraged to think about how much they didn't know about a product or how much they wish they knew before writing a review. Participants who felt their product knowledge fell short were inclined to write more reviews and share them with more people. The results of the study were published in the October issue of the Journal of Consumer Psychology.
Consumers should be particularly wary of reviews that contain frequent references to the author – words such as "I" or "me" – according to Dr. Packard. Those who consider themselves to be less knowledgeable also tend to write longer and wordier reviews and use more sophisticated language. And they are more likely to rate a product highly. "To me the real message for consumers is you should take any source [of information] with a grain of salt," he says.
Marketers, too, should exercise caution. While the findings may provide businesses with a tempting means of identifying opinion leaders who are likely to spread the word about their products, the information they share is often biased and inaccurate. Ultimately, that's unlikely to drive repeat business, Dr. Packard says.
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Free online advice also could be one reason why public trust in professional groups such as lawyers and doctors is eroding. For those who practise in these professions, this can be more than just a nuisance; it can affect their job performance and pay.
A study co-authored by Heather Vough, assistant professor of organizational behaviour at McGill University's Desautels Faculty of Management in Montreal, gathered data through one-on-one interviews with members of four professional groups: architects, nurses, lawyers and accountants. The participants were asked detailed questions about how clients view their profession and how these perceptions affect their work. Participants across all four groups reported that many clients don't understand the duties they perform and often underestimate the complexity of their work or overestimate what they can accomplish. The paper was published in the Academy of Management Journal last August.
These wrong perceptions can lead to conflict and hinder the ability of professionals to provide high-quality service to clients, the study concludes. They can also lead to disputes over fees and even loss of employment. To mitigate the problem, the authors recommend that professionals educate clients at the outset about the specific services they provide. However, they caution against using detailed technical information, which may ultimately confuse and alienate new and prospective clients.
Sympathy for cheaters
Is it ever okay to cheat or steal? Most people would be inclined to say no. Yet, those who feel worse off financially compared with their peers are more likely to cheat and judge others who do so more leniently, according to a paper to be published in the journal Organizational Behavior and Human Decision Processes.
The results may be especially relevant in today's tough economic climate. "We live in a time when [financial] inequities are very large," says Nina Mazar, associate professor of marketing at the University of Toronto's Rotman School of Management and one of the study's lead researchers. And various studies suggest the divide is growing wider, she adds.
In a series of computer-based experiments, participants who lost money were more likely to cheat in subsequent games of chance than those who hadn't. In another experiment, participants were asked to play the role of a judge and sentence four people who had committed crimes; two of the offenders were financially disadvantaged and two were not. Participants who had been induced to believe that they themselves were financially worse off assigned more lenient sentences to offenders who had suffered the same fate. Participants in the non-deprived group showed no difference in their sentencing.
"People who feel [financially] deprived tend to cheat for financial gains and judge deprived moral offenders who cheat for financial gains less harshly," the authors write.
The study concludes that these behaviours may explain why workplace theft is so common. "Employees who feel deprived relative to the corporations and executives they work for might perceive their own and their colleagues' willingness to steal through lenient eyes," it says. In such circumstances, workers may be more inclined to engage in workplace sabotage, to steal and to commit other dishonest acts. What's more, regressive tax plans and tax cuts for the wealthy may exacerbate the problem "both within and beyond the workplace," the paper suggests.
The findings also have implications for those who interpret and enforce laws and policies within corporations, the judicial system and the economy at large and whose decisions may be swayed by changes in their own financial positions. "Judges, politicians and people in charge of making decisions are humans just like everybody else," says Dr. Mazar.
Rosanna Tamburri can reached at firstname.lastname@example.org