Most of you are familar with the side-effect effect (a.k.a., the Knobe Effect), which is the asymmetric attributions of intentionality (among other things) to agents based on the side-effect of their actions. Joshua Knobe originally discovered the affect by presenting people with a vignette in which a corporate chairman initiates a new program to increase profits which also harms or helps the environment. While the side-effect effect has been studied and expanded in a number of subsequent articles, I have long been surprised that there was almost no work done on the effect in relation to business ethics. Knobe's original vignette (and many subsequent versions) was set in a business context, and one side effect was morally permissible while the other was not.
In a new article in the Journal of Business Ethics, Paul Stey, Mark Alfano, and I examine the implications ofthe side-effect effect for business ethics, but with a twists. We wanted to know what role attributions of virtue and vice played as well. As it turns out, while attributions of the virtue of compassion and the vice of callousness don't exhibit the side-effect effect, they do mediate people's willingness to cease doing business with a company, even if it cost more.
Using a 2x2, between-subjects design, of our participants (N=81, Mage=34.4, 40 women), half were presented with a version of the following vignette:
The vice-president of a manufacturing company was talking with the CEO. The vice-president said, “We are thinking of implementing a new policy. If we implement the policy, it will increase profits for our corporation. It will also mean that we have to fire 10% of our employees, many of whom will / increase our workforce by 10%, hiring many people who would have difficulty finding other work.” The CEO said, “I don’t care at all about the employees. I just want to make as much money as possible. Let’s implement the policy.
They implemented the policy. Just as the vice-president had predicted, profits increased, 10% of the employees were fired, and many of them were unable to find other work / the workforce was increased by 10%, and many of the new workers would have been unable to find other work.
This is a standard Knobe case. Our hypothesis, however, was that both virtues and vices are based upon primary (or main) effects. So, we also gave other participants one of the following:
The vice-president of a manufacturing company was talking with the CEO. The vice-president said, “We are thinking of implementing a new policy. If we implement the policy, it will increase profits for our corporation. It will also mean that we have to fire 10% of our employees, many of whom will / increase our workforce by 10%, hiring many people who would have difficulty finding other work.” The CEO said, “I’ve been looking for ways to fire/hire some of our employees, and of course I always want to increase profits. Let’s implement the policy.”
They implemented the policy. Just as the vice-president had predicted, profits increased, vb
We then asked our participants on a seven-point Likert scale how intentional, callous, and compassionate they regarded the hiring/firing, as well how likely they were to avoid purchasing products from this company, even if they had to pay more. Let's start with intentionality:
As you can see, they did not regard hiring as norm-conforming side effect to be intentional; otherwise, intentionality holds (mostly) steady. While perhaps the expected result, it is reassuring to confirm that the side-effect effect doesn't extend to primary effects as well. What of the CEO's callousness or compassion?
Put together, these two graphs tell an interesting story. You might think that the CEO who hires workers either as a side effect might be thought as compassionate as when hiring was the primary effect. Or, a slightly weaker claim, that the CEO in the hire/side-effect case at least won't be callous. But neither the stronger or weaker claim matches the folk view. There is no "neutral" case, where the CEO is neither callous or compassionate. At least of CEO's, callousness appears to be the default, only able to be overridden by a morally good, second primary effect. Being regarded as virtuous takes something special. These graphs also show that attributions of the virtue of compassion and the vice of callousness do not exhibit the side-effect effect. We expect the same would hold true for other virtues and vices as well.
Finally, we asked about participants' willingness to no longer buy products from the CEO's company, even if it costs more. This is significant, since, to our knowledge this is the first study to consider what implications the Knobe Effect has for consumer behavior. Here's what we found:
Participants reported being more willing to avoid purchasing when the CEO fires employees than when he hires employees. And within the fire conditions, they say they're more inclined to avoid purchasing when the firing was a side effect than a primary effect. The really interesting result is that we found that the inclination to avoid purchasing from the company was highly correlated with participants’ ratings of the CEO’s callousness, r = .50, p < .001. This means that a participant's rating of the callousness of the CEO was a predictor of how inclined they were to avoid purchasing from the CEO, F(1, 77) = 9.00, p < .01, ηp2 = .11. In hindsight, we wish we had also asked participants about their inclinations to do business with the CEO's company even if it cost more. We expect that had we done so, participants would have been more willing to do business with the hire/primary effect CEO, and that their attributions of compassion mediated this inclination.
We'll set aside for now the conclusion for business ethics that our findings suggest. (They're in the paper and we encourage you to read them if you're interested.) There is however, one final interesting finding to report. Look back at Figure 1. You'll notice that within the fire condition, participants were significantly more willing to say the firing was intentional in the side effect case than the primary effect case, F(1, 77) = 3.89, p = .05, ηp2 = .05. This is a surprising result. For the time being, we aren't offering a hypothesis to explain this result, instead waiting for future replication first. That said, we are eager to hear any suggestions that readers here might have.