Doctor of Philosophy
School of Management, Operations and Marketing
Advancing knowledge regarding online privacy protection has never been so critically necessary as in this age of big data. The emergence of data capitalism, along with disruptive technological changes, has induced mass collection and commoditisation of data, giving rise to restricted freedoms, exploitation of consumer data, and threats to privacy. Firms have a vested interest in consumer data, due to the unprecedented value it can generate for business success. However, they must effectively manage their data practices to avoid consumer backlash from burgeoning ethical, legal, and rights-related concerns. It is now imperative to maintain a balance between utilising consumer data for commercial purposes and preserving consumer privacy.
The primary objective of this study is to explore why consumers are increasingly worried about their privacy and why they behave in manners that can be detrimental to the consumer-vendor relationship. By exploring this issue, the study aims to understand how to manage privacy issues effectively in the e-commerce context. To reach this objective, the study employs the power-responsibility equilibrium theory, which advocates a balance between social power and social responsibility. As a secondary objective, this study uses construal level theory to explore the impact of the psychological distance of privacy construct on consumer privacy-related attitudes and behaviour. Integrating these two objectives, the study presents a privacy model in business-to-consumer e-commerce. The proposed model was validated using a quantitative-positivist research design with a cross-sectional survey method. A qualitative-interview study was also conducted prior to the survey with 30 online shopping consumers to develop and validate the research constructs and survey measurements. The respondents for the main survey were recruited via an online research panel. The sample included 363 online shopping consumers in Australia. The data was analysed using the partial least squares structural equation modelling.
The study found that lack of corporate privacy responsibility and regulatory protection can deprive consumers of privacy empowerment, damage consumer trust, and thus trigger privacy concerns and subsequent defensive responses. Consistent with the power-responsibility equilibrium theory, this finding indicates that consumers’ defensive actions or ‘power-balancing operations’ are driven by perceived power imbalances or unfulfilled obligations, wherein power holders fail to ensure protection of privacy. This highlights the importance of firms balancing power and responsibility evenly for maintaining a healthy information exchange environment. The results suggest establishing trust and privacy empowerment through responsible organisational and regulatory mechanisms as key strategies to manage privacy issues and consumer backlash. The study also found that psychological distance of privacy negatively impacts privacy behaviour, and negatively influences the relationship between privacy concerns and privacy behaviour. Psychological distance of privacy did not have any interaction with trust or privacy empowerment.
This study has several contributions for theory and practice. For theory, a key contribution of the study emanates from empirically establishing a theory-based ethical and social responsibility approach to understanding contemporary consumer privacy issues. By ascertaining the impact of power holders (i.e., corporations and governments) on consumer privacy and their resultant behaviour, this study formulates consumer-business and citizengovernment privacy relationships within the same framework. This study makes a vital contribution to privacy and business ethics literature by introducing the concept of perceived corporate privacy responsibility. The study also examines the impact of both trust and privacy empowerment on consumer privacy concerns and defensive privacy behaviour, which to date has received little attention in the privacy literature. This is one of the few studies to apply the construal level theory in the privacy context. It is also the first study to introduce and examine the concept psychological distance of privacy. For practice, the findings provide numerous insights into developing privacy-preserving e-commerce systems and policies for effective management of consumer privacy and wellbeing. Online firms should consider the protection of privacy as a competitive advantage. The study also informs regulators about their role in establishing an environment of trust, and empowering consumers to reduce privacy issues in the online context. For consumers, the findings suggest that they should be aware of the adverse effects of psychological distance of privacy. Consumer behaviour which reflects less consideration for protecting privacy can end up in further exploitation of consumer data and enactment of relaxed privacy protection mechanisms. Individuals, knowingly or unknowingly contribute to a larger data ecosystem of which a few online giants get to reap unprecedented profits to the detriment of the masses. The societal stakeholders should be more mindful about the ripple effects of their online activities and should demand stringent regulations and responsible corporate practices. Overall, the study highlights that ensuring consumer privacy protection can be beneficial for consumers, companies, and to the e-commerce industry.
Bandara, Ruwan, The ethics of online privacy in the data-driven marketplace: A power-responsibility equilibrium and construal level theory perspective, Doctor of Philosophy thesis, School of Management, Operations and Marketing, University of Wollongong, 2020. https://ro.uow.edu.au/theses1/738
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Unless otherwise indicated, the views expressed in this thesis are those of the author and do not necessarily represent the views of the University of Wollongong.