Information Privacy Concerns, Procedural Fairness, and Impersonal Trust: An Empirical Investigation

• Published in: Organization science (Providence, R.I.) Vol. 10; no. 1; pp. 104 - 115
• Main Authors: Culnan, Mary J, Armstrong, Pamela K
• Format: Journal Article
• Language: English
• Published: Linthicum INFORMS 01-01-1999; Institute for Operations Research and the Management Sciences
• Subjects: Business structures; Competitive advantage; Computer software industry; Consumer attitudes; Consumers; Customer services; Customers; Data collection; Data mining; Direct marketing; Effects; Empirical research; Fairness; Global economy; Health care information privacy; Hypotheses; Information economics; Information Privacy; Information systems; Information technology; Interpersonal relations; Justice; Marketing; Marketing strategies; Organizational Information Processing; Personal information; Privacy; Procedural Justice; Product returns; Quality of service; Right of privacy; Sales; Service Quality; Statistical analysis; Studies; Trust; United States; United States > US
• ISSN: 1047-7039; 1526-5455
• DOI: 10.1287/orsc.10.1.104

This research addresses the tensions that arise between the collection and use of personal information that people provide in the course of most consumer transactions, and privacy. In today's electronic world, the competitive strategies of successful firms increasingly depend on vast amounts of customer data. Ironically, the same information practices that provide value to organizations also raise privacy concerns for individuals. This study hypothesized that organizations can address these privacy concerns and gain business advantage through customer retention by observing procedural fairness: customers will be willing to disclose personal information and have that information subsequently used to create consumer profiles for business use when there are fair procedures in place to protect individual privacy. Because customer relationships are characterized by social distance, customers must depend on strangers to act on their behalf. Procedural fairness serves as an intermediary to build trust when interchangeable organizational agents exercise considerable delegated power on behalf of customers who cannot specify or constrain their behavior. Our hypothesis was supported as we found that when customers are explicitly told that fair information practices are employed, privacy concerns do not distinguish consumers who are willing to be profiled from those who are unwilling to have their personal information used in this way.