Executive summary of “From trait to state: understanding privacy concerns”

Citation

(2015), "Executive summary of “From trait to state: understanding privacy concerns”", Journal of Consumer Marketing, Vol. 32 No. 2. https://doi.org/10.1108/JCM-01-2015-1304

Executive summary of “From trait to state: understanding privacy concerns”

Article Type: Executive summary and implications for managers and executives From: Journal of Consumer Marketing, Volume 32, Issue 2

This summary has been provided to allow managers and executives a rapid appreciation of the content of the article. Those with a particular interest in the topic covered, may then read the article in toto to take advantage of the more comprehensive description of the research undertaken and its results to get the full benefit of the material present.

Recent years have brought a significant increase in firms seeking to obtain and use customer data. Such information helps businesses to create accurate customer profiles that can be used to personalize product offerings and provide other benefits. Improved cost and operational efficiencies are some of the payoffs companies can expect in return.

It is widely reported that many consumers remain apprehensive about providing personal information as part of their purchase transactions. They effectively carry out “disclosure management” to safeguard their interests. Potential risks and benefits are carefully considered before any commitment is made. The nature of data and its degree of sensitivity will also considerably impact on the decision whether to provide information or not. An individual’s affiliation with the company is another important factor identified by researchers. Related to this are questions about the necessity of data collection and how it might be subsequently used. It is normal to weigh up any perceived risks against whatever benefits are promised by the exchange relationship.

Growing belief exists that anxiety will increase among consumers as data collection becomes even more prevalent. Much of this concern will center on the relinquishing of control and doubts about the ability of organizations to safeguard the information they have given. However, whether or not this will impact on their willingness to participate in future exchange relationships is not clearly indicated in the research.

The different definitions of privacy which exist are classified as either “value-based” or “cognate-based”. Legal and economic notions relate to the value-based approaches, while cognate-based descriptions view privacy in terms of behavior reflected in mind states or claiming control.

One of the core principals of cognate-based definitions in that people are inherently inclined toward privacy. This is proposed to be a trait which endures, yet remains subject to vary between different contexts. The contextual element is claimed by some scholars to at least partially explain why response to privacy issues is somewhat unpredictable.

Internal and external control are cited as determinants of whether someone will allow his or her information to be accessed. According to the literature, internal control relates to personal choice to share information with others. Evidence suggests that people rating highly in this measure place greater emphasis on protecting their information. Taking their details off databases, limiting their use of Web sites and skepticism toward marketing are the likely outcomes. Purchase intention is frequently lower among such individuals, who tend to favor more stringent regulations too.

Regulating how others in possession of their personal details can use it is the premise of external control. Risk pertaining to possible misuse drives people with high external control to set conditions or restrictions.

In the current study, Taylor et al. utilize a hierarchical framework that incorporates personal and contextual traits. The Meta-theoretical Model of Motivation (3M model) has been successfully deployed in the scrutiny of several types of behavior. At its core is the notion that personality traits function to shape behavior in a specific context. The four levels in the model reflect progression of traits from broad to specific. Each level is determined to some extent by previous ones:

1. Elemental traits: Genetics and early experiences shape these eight traits which serve as a conceptual foundation for evaluating and forecasting behaviors.

2. Compound traits: Culture and past learning influence traits here that provide a more precise indication of behaviors.

3. Situational traits are numerous and reflect how behavior in “general situational contexts” emerges as a consequence of individual differences.

4. Surface traits, which determine an individual’s specific disposition to engage in certain behaviors within particular situations.

It is suggested that privacy reflects a combination of the traits information privacy orientation (IPO) and consumer privacy concerns (CPC). The former is deemed a situational trait influenced by compound traits “risk orientation” and “need for privacy”. Propensity to guard personal details is at the core of IPO and influences the surface trait CPC that is “situation-specific”. Those with high IPO are inclined toward data confidentiality.

Another key variable regarding privacy is risk orientation. Research shows that disclosure of personal information is invariably lower among individuals rating high in this “self-protection mechanism”. Various scholars maintain that need for cognition shapes IPO. The premise is that desire for deeper understanding prompts higher valuation of personal details and consequently an increased inclination toward guarding them.

Extant literature notes that CPC is specific to business-to-consumer contexts. It reveals consumers’ desire for controlling the information a firm will reveal to others about them. The three dimensions of CPC are labeled:

1. Information collection concern: Reflecting fear that companies hold an unnecessary amount of data about them.

2. Error concern: This refers to consumer anxiety that protection against deliberate or accidental mistakes is lacking.

3. Unauthorized secondary use: The issue here is that information might be used for undisclosed purposes or passed on to third-parties.

Concerns about privacy have additionally been found to impact on attitudes toward relationship management initiatives and the technology used to gather personal information.

Undergraduates completed an online survey exploring various hypotheses. Of the 965 subjects recruited, 53 per cent were male and the vast majority aged between 20 and 34 years. Several ethnicities were represented in the sample. Participants were first asked to respond to statements measuring their thoughts and actions pertaining to the issues under scrutiny. They were then presented with a description of a store loyalty card program and invited to indicate their attitude toward the data collection conducted as part of it.

Analysis of responses revealed that:

• higher IPO is evident among people with greater risk orientation and need for cognition;

• concern about information collection, errors and authorized secondary use increases when IPO is high; and

• positive correlation exists between CPC and attitude toward information collection.

In the latter case, CPC was predicted to show a similar relationship with errors and secondary usage. That this did not materialize was attributed by the authors to the absence of contextual cues. However, they believe a contextual cue such as the identity of the specific firm involved in the exchange relationship would generate strong negative attitudes.

This study confirms the hierarchical nature of privacy concerns and the significance of both traits and context. Based on this added insight, Taylor et al. urge companies to adopt a more responsible approach to collecting, using and safeguarding consumer information. Efforts that provide additional reassurances to this end are needed. This should include initiatives to lower consumer risk perceptions such as strengthening mutual trust and providing information about organizational practices which determine how information is handled. Adopting the latest technology and rigorous training of employees is also recommended.

Taylor et al. suggest conducting similar work using different samples to test whether findings will apply to other consumer segments. Investigating how trust and other situational variables significant to retailers impact on privacy concerns is another avenue for future research.

To read the full article enter 10.1108/JCM-07-2014-1078 into your search engine.

(A précis of the article “From trait to state: understanding privacy concerns”. Supplied by Marketing Consultants for Emerald.)