A recent scandal shook Blizzard Entertainment, an American company best known for video games such as World of Warcraft or Hearthstone. After winning the finals of Blizzard’s official Hearthstone tournament in Taiwan, player Chung Ng Wai openly voiced support for the ongoing protests in Hong Kong in a post-match interview.

Since Blizzard experienced strong sales growth on the Chinese market, the company decided to repair their now damaged relation to China by banning Wai from competitive play and not paying the promised tournament prize. This perceived violation of Wai’s freedom of speech sparked massive outrage from Blizzards stakeholders: consumers called for boycotts on the company’s products, a group of Blizzard employees staged a public walk-out, resigning from their positions. The United States congress sent an open letter to the company, urging them to reconsider their decisions regarding freedom of speech. 

This kind of scandal is not unique. Organisations such as Apple and the National Basketball Association (NBA) experienced similar scandals in which stakeholders perceived violations of freedom of speech due to the organisations’ financial interests in the Chinese market. In both cases, the organisations focused on meeting demands of the Chinese government, prompting moral outrage from their Western stakeholders in the process. In my research I examine how scandals are evaluated by stakeholder groups and propose that scandals involving so-called “sacred values”, such as freedom of speech, pose a dilemma situation for organisations when engaging in markets with diverging sacred values.

Sacred Values & Taboo Trade-Offs

Sacred values can be described as values that are central to one’s identity (Tetlock et al., 2000). For example, being able to freely express opinions can be considered a central part of most Western Europeans’ identity as it is considered as the fundament of civil society. In addition, sacred values are considered as universal by the individuals holding them. For instance, Western communities generally agree on the notion that everyone should be able to express their opinion freely no matter their home country. When asking people to compromise on their sacred values with secular values, for example trading them for money, they perceive the offer as a taboo trade-off and react with high levels of moral outrage, anger and disgust (Tetlock, 2003). In Blizzard’s case the Western community displayed moral outrage as they perceived the company to prioritise financial gains in China over their sacred value freedom of speech.

In line with the dominant neoliberalism, most organisations aim at maximising profits and in turn shareholder revenue. Consequently, organisations become active in the Chinese market and often experience double digit growth rates. However, the Chinese government imposes a degree of censorship on organisations as a requirement for access to the country’s market. Western stakeholders often perceive compliance with censorship as a means to increase profit as a taboo trade-off involving freedom of speech. This poses a dilemma situation for organisations that seems unsolvable. On one hand, shareholders demand revenue from the Chinese market, which requires good relations with the Chinese government. On the other hand compliance with censorship for financial interests is often perceived as a taboo-trade off by their home-country community, prompting moral outrage and severe backlash effects for organisations. 

Implications

In light of several recent scandals involving perceived taboo trade-offs of organisations, such as Blizzard, Apple or the NBA, the phenomenon provides ample opportunity for future research. When, why and how do communities perceive organisations to commit taboo trade-offs? What are the long term consequences of sacred value violations? How do managers decide in dilemma situations involving sacred values given their own cultural backgrounds? Which reaction strategies do organisations pursue in response to scandals involving taboo trade-offs? 

In sum, scandals involving taboo trade-offs highlight the need for organisations to understand their stakeholder groups in terms of their shared values, and will likely remain a matter of public attention in the coming years.  

Peer Stiegert (p.stiegert rug.nl) is a PhD candidate at the Department of Human Resource Management & Organizational Behavior, Faculty of Economics and Business, University of Groningen, researching organizational scandals and the public perception of organizations.

Tags: Ethical Judgement, Ethical Behavior, Sacred Values

Further reading:

Tetlock, P. E. (2003). Thinking the unthinkable: Sacred values and taboo cognitions. Trends in cognitive sciences, 7(7), 320-324.

Tetlock, P. E., Kristel, O. V., Elson, S. B. Lerner, J. S., & Green, M. C. (2000). The psychology of the unthinkable: Taboo trade-offs, forbidden base rates, and heretical counterfactuals. Journal of Personality and Social Psychology, 78, 853–870.