Big Is Bad: Stereotypes About Organizational Size, Profit-Seeking, and Corporate Ethicality

Abstract

Individuals tend to hold a dim view of for-profit corporations, believing that profit-seeking comes at the expense of ethicality. In the present research, we show that this belief is not universal; rather, people associate ethicality with an organization's size. Across nine experiments (N = 4,796), people stereotyped large companies as less ethical than small companies. This size-ethicality stereotype emerged spontaneously (Study 1), implicitly (Study 2), and across industries (Study 3). Moreover, we find this stereotype can be partly explained by perceptions of profit-seeking behavior (Supplementary Studies A and B), and that people construe profit-seeking and its relationship to ethicality differently when considering large and small companies (Study 4). People attribute greater profit-maximizing motives (relative to profit-satisficing motives) to large companies, and these attributions shape their subsequent judgments of ethicality (Study 5; Supplementary Studies C and D).

Keywords: business ethics; morality; organizational size; profit-maximizing; stereotypes.