Espoused National Cultural Values and Privacy Assurance

The Moderating Role of Espoused National Cultural Values on Perceptions of Privacy Assurance Mechanisms Emergent Research Forum papers

Dong-Heon (Austin) Kwak Kent State University [email protected] Mirmahdi Darban Hosseini Amirkhiz Kent State University [email protected]

Greta L. Polites Kent State University [email protected] Shuyuan (Lance) Deng Dakota State University [email protected]

Abstract Individuals’ privacy concerns can inhibit their online purchasing behavior. This paper investigates the moderating role of espoused individualism and uncertainty avoidance in the effect of external persuasion cues (e.g., privacy policy statements and third-party assurance seals) on attitude toward a website. This study hypothesizes that individuals scoring high on individualism or uncertainty avoidance are more persuaded by central cues (privacy policy statements) while individuals who score high on collectivism or low on uncertainty avoidance are more persuaded by peripheral cues (third party assurance seals). Keywords Elaboration likelihood model, espoused national cultural values, privacy assurance

Introduction In today’s information society, as the amount of personal information collected in electronic databases increases exponentially, the concept of individual privacy has become crucial (Angst and Agarwal 2009). Privacy concerns are a major barrier to consumer participation in various online activities, and prior research has emphasized the importance of these concerns (Bélanger and Crossler 2011; Culnan and Williams 2009; Dinev and Hart 2006). Indeed, two recent studies examine the moderating role of privacy concerns in the context of persuasion (Angst and Agarwal 2009; Bansal et al. 2015). Rooted in the Elaboration Likelihood Model (ELM), these studies incorporate privacy concerns as a determinant of the route to persuasion in perceptions and attitudes, thereby offering a new theoretical lens into the ELM by integrating privacy concerns. While some studies have explored national culture as a predictor of privacy concerns (Bellman et al. 2004), past research remains limited in examining espoused national culture (Srite and Karahanna 2006) as a determinant of the route to persuasion in the privacy context. As a consequence, the ELM and privacy research may be enriched by drawing on individual behavior applications of national culture to explore how cues such as privacy policy statements (PPS) and thirdparty assurance (TPA) seals are elaborated when website visitors have different espoused cultural values. Hofstede’s framework of national culture has been used to understand both individual privacy concerns and persuasion. However, many prior studies have used Hofstede’s country scores at the individual level of analysis. This can result in ecological fallacy, where a researcher makes inferences about individuals based solely on aggregate statistics collected for a group to which those individuals belong (Robinson 1959). To resolve this problem, many researchers have followed Srite and Karahanna (2006) in investigating espoused national cultural values, in contexts such as eCommerce (Yoon 2009) and privacy (Lowry et al. 2011).

Twenty-first Americas Conference on Information Systems, Puerto Rico, 2015

1

Espoused National Cultural Values and Privacy Assurance

Given the significant role of national culture in affecting privacy concerns and persuasion, espoused national cultural values can be regarded as a determinant of the route to persuasion in websites’ privacy assurance. Thus, our study seeks to answer the following research question: How do espoused cultural values (individualism and uncertainty avoidance) impact perceptions of a website’s privacy assurance mechanisms? Our paper is structured as follows. First, we review relevant literature on the ELM and espoused national cultural values. Next, we develop the research model. Finally, we describe the proposed research method.

Theoretical Background The Elaboration Likelihood Model Dual-process theories assume that information processing can be the outcome of two qualitatively distinct processes. For example, the ELM (Petty and Cacioppo 1986) posits that attitudes can be formed and changed following either a thoughtful consideration of a message argument (i.e., central route) or a less cognitively effortful inference (i.e. peripheral route). According to the ELM, when a message is presented in a different context, message recipients will vary in the extent to which they devote cognitive energy to the message. In the ELM, motivation and ability factors are expected to affect the likelihood that an individual will elaborate persuasive messages (Petty and Cacioppo 1986). In the high elaboration condition, the message recipient is experiencing central route processing, while peripheral route processing is dominant when the elaboration condition is low (Petty and Cacioppo 1986). The former situation requires the individual to carefully process the logic of arguments presented in the message and investigate their relevance prior to forming a judgment about the target behavior. In contrast, the peripheral route requires less cognitive efforts, with simple decision cues and rules of thumb. The ELM suggests that similar persuasion processes can generate widely different responses across individuals and even common persuasion processes may produce different responses for the same person. In particular, the ELM argues that what determines the route to persuasion is the extent of elaboration likelihood (Angst and Agarwal 2009). In the context of privacy, central route processes using PPS and peripheral route processes using TPA seals are determined by the extent of elaboration (e.g., privacy concerns) (Bansal et al. 2015). We investigate two espoused national cultural values (individualism and uncertainty avoidance) as additional possible elaboration likelihood states. We review espoused national cultural values in the following section.

Espoused National Cultural Values Hofstede defined culture as “the collective programming of the mind which distinguishes the members of one human group from another” (1984, p. 206). In 1980, he proposed four extensively cited dimensions of national culture: individualism/collectivism (IC), masculinity/femininity, power distance, and uncertainty avoidance (UA). Hofstede and Bond (1988) later added long-term orientation (or Confucian dynamism) as a fifth dimension. Hofstede’s national culture has been applied to both privacy and persuasion research to better understand national differences. Traditional research using Hofstede’s index makes several assumptions that national culture is static, cultural groups are homogeneous, and people belong to a single national culture (Gallivan and Srite 2005). These assumptions can lead to inconclusive results, especially at the individual unit of analysis, due to ecological fallacy (Srite and Karahanna 2006). Although Hofstede has conceptualized cultural values at the national level and argued that national culture is a characteristic of the nation, not of an individual, national cultural values have been examined as being espoused at the individual level in much previous research (Rai et al. 2009). Among these five espoused national cultural values, we are specifically interested in IC and UA for two reasons: (1) IC and UA are frequently examined in cross-national cultural research on privacy and security (Dinev et al. 2009), and (2) espoused IC and UA have been proposed/identified as being associated with privacy issues (Cao and Everard 2008; Lowry et al. 2011).

Twenty-first Americas Conference on Information Systems, Puerto Rico, 2015 2

Espoused National Cultural Values and Privacy Assurance

Research Model Our research model (Figure 1) incorporates privacy assurance mechanisms and espoused national cultural values in the ELM framework. Individualistic people emphasize private time, personal achievements, and goals, whereas collectivistic people emphasize group norms and goals (Hofstede 1980). Etzioni (1999; in Dinev and Hart, 2006, p.61) pointed out that “the fact that privacy is a widely coveted and highly privileged value in American society reflects the importance of individualism in the country’s philosophical foundations.” Individuals in the US resist the acceptance of group norms when these norms conflict with their personal interests and infringe on their privacy (Kwak et al. 2011). Given the above reasoning, we argue that people with espoused individualism will be more concerned about privacy issues. In contrast, people with espoused collectivism will be less sensitive to privacy concerns and more inclined to share their private information. People with espoused individualism may diligently search for and cautiously scrutinize the organization’s privacy statements to reduce their privacy concerns (Pan and Zinkhan 2006). Since people with espoused collectivism worry less about their privacy, they rely more on simple decision criteria such as endorsements (Bansal et al. 2015). Espoused Uncertainty Avoidance

Espoused Individualism

H1 +

H3 +

Privacy Policy Statements

H2 -

H4 -

Attitude toward Privacy Assurance in a website

Third Party Assurance Seals

Figure 1. Research Model H1:

The relationship between PPS and attitude toward a website’s privacy assurance is moderated by individualism/collectivism such that the relationship is stronger for individuals with espoused individualism.

H2: The relationship between TPA seals and attitude toward a website’s privacy assurance is moderated by individualism/collectivism such that the relationship is stronger for individuals with espoused collectivism. The impact of uncertainty avoidance on privacy concerns has been well established (Cao and Everard 2008; Lowry et al. 2011). Individuals with higher espoused UA feel threatened by uncertain or risky situations and prefer formal rules and regulations (Srite and Karahanna 2006). Thus, high UA individuals would engage in more systematic information processing. Social psychologists distinguished between two groups of people based on uncertainty-orientation (Sorrentino and Short 1986). Uncertainty-oriented individuals are motivated to resolve uncertainty about the self and the environment and certaintyoriented individuals prefer no uncertainty and are motivated to avoid it (Sorrentino and Short 1986). In the persuasion and information processing literature, Sorrentino et al. (1988) examined the effect of personal relevance on attitude formation and change as a role of an individual’s uncertainty orientation; and found that certainty-oriented individuals rely more on peripheral cues under high personal relevance,

Twenty-first Americas Conference on Information Systems, Puerto Rico, 2015

3

Espoused National Cultural Values and Privacy Assurance

suggesting that high personal relevance would make certainty-oriented individuals less thoughtful and systematic in their information processing than would low personal relevance. In the privacy context, we argue that UA (certainty-orientation) plays a motivational role similar to individualism. Milne and Culnan (2004) noted that reading PPS is only one element for consumers to manage the concerns and risks of disclosing private information online. As such, individuals with high espoused UA are more disposed to carefully and systematically examine PPS on websites to identify how the organizations practice privacy protection for web visitors. These individuals will rely less on external endorsements such as TPA seals, because they tend to be more aware of inaccuracy of such cues (Bhattacherjee and Sanford 2006). In contrast, low UA individuals are more persuaded by TPA seals in forming beliefs and attitudes, rather than PPS. H3: The relationship between PPS and attitude toward a website’s privacy assurance is moderated by UA such that the relationship is stronger for high UA individuals. H4: The relationship between TPA seals and attitude toward a website’s privacy assurance is moderated by UA such that the relationship is stronger for low UA individuals.

Proposed Methodology and Data Analysis We plan to conduct a controlled experiment to test our hypotheses. This experiment employs a 2 (quality of PPS: low vs. high) × 2 (TPA Seals: control vs. many) × 2 (IC/UA: high vs. low) between-subjects design. We will use student subjects at a large public university. About 200 subjects (8×25) will be voluntarily recruited. For the experiment, fictitious company websites will be created to avoid possible compounding effects due to familiarity of the company. Four website stimuli will be developed to provide variations in PPS and TPA seals. PPS will be manipulated by varying the amount, extent, and detail associated with the organization’s privacy policy such as notice and disclosure, choice/consent, data security, among others. TPA seals will be manipulated through the omission/inclusion of privacy related TPA seals such as Truste®, BBBOnline, and WebTrust. Before participating in the experiment, subjects will be asked to provide their espoused IC and UA (Srite and Karahanna 2006), and other demographic information. They will be randomly assigned one of four stimuli and will be asked to examine PPS and TPA seals of the website. At the conclusion of the experiment, subjects will be asked to answer questions regarding their perceptions of PPS quality, the presence of TPA seals, and attitude toward the website’s privacy assurance. Manipulation checks for PPS and TPA seals will be conducted using previously validated scales (Bansal et al. 2015; Bhattacherjee and Sanford 2006). Espoused IC and UA will be divided into two groups based on median split half. Assignment bias will be checked using gender and age to make sure there are no significant differences across groups. For the main analysis, ANOVA will be used to test for group differences, including the interaction effect of espoused national culture.

Implications and Conclusion ELM research has exerted great efforts to examine elaboration states including motivational and ability factors. While espoused national cultural values are important in research on privacy and persuasion, they have not been investigated as elaboration states. Thus, we contribute to the literature by extending the ELM to incorporate espoused individualism and uncertainty avoidance as elaboration states in information processing. This further suggests that other individual dispositional traits may play moderating roles in persuasion as well. From a practical perspective, since utilizing PPA does not require much monetary cost, website managers and designers can strategically utilize PPS and TPA seals based on the different levels of elaboration states. For people with high elaboration (e.g., high uncertainty avoidance, privacy concerns, or knowledge of privacy policy), companies can focus on utilizing PPS rather than TPA seals. We expect our findings to enrich our knowledge on persuasion in the context of Internet privacy.

Twenty-first Americas Conference on Information Systems, Puerto Rico, 2015 4

Espoused National Cultural Values and Privacy Assurance

References Ajzen, I. 1991. “The Theory of Planned Behavior,” Organizational Behavior and Human Decision Processes (50), pp. 179-211. Angst, C. M., and Agarwal, R. 2009. “Adoption of Electronic Health Records in the Presence of Privacy Concerns: The Elaboration Likelihood Model and Individual Persuasion,” MIS Quarterly (33:2), pp. 339-370. Bansal, G., Zahedi, F. M., and Gefen, D. 2015. “The Moderating Influence of Privacy Concern on the Efficacy of Privacy Assurance Mechanisms for Building Trust: A Multiple-Context Investigation,” European Journal of Information Systems, forthcoming. Bélanger, F., and Crossler, R. E. 2011. “Privacy in the Digital Age: A Review of Information Privacy Research in Information Systems,” MIS Quarterly (35:4), pp. 1017-1041. Bellman, S., Johnson, E. J., Kobrin, S. J., and Lohse, G. L. 2004. “International Differences in Information Privacy Concerns: A Global Survey of Consumers,” The Information Society (20:5), pp. 313-324. Cao, J., and Everard, A. 2008. “User Attitude towards Instant Messaging: The Effect of Espoused National Cultural Values on Awareness and Privacy,” Journal of Global Information Technology Management (11:2), pp. 30-57. Culnan, M. J., and Williams, C. C. 2009. “How Ethics can Enhance Organizational Privacy: Lessons from the ChoicePoint and TJX Data Breaches,” MIS Quarterly (33:4), pp. 673-687. Dinev, T., and Hart, P. 2006. “An Extended Privacy Calculus Model for E-Commerce Transactions,” Information System Research (17:1), pp. 61-80. Dinev, T., Goo, J., Hu, Q., and Nam, K. 2009. “User Behaviour towards Protective Information Technologies: The Role of National Cultural Differences,” Information Systems Journal, (19:4), pp. 391-412. Etzioni, A. 1999. The Limits of Privacy, New York: Basic Books. Gallivan, M., and Srite, M. 2005. “Information Technology and Culture: Identifying Fragmentary and Holistic Perspectives of Culture,” Information and Organization (15), pp. 295-338. Hofstede, G. 1980. Culture’s Consequences: International Differences in Work-Related Values, Beverly Hills, CA: Sage Publications. Hofstede, G. 1984. Culture Consequences, Newbury Park, CA: Sage. Kwak, D.-H., Kizzier, D., Zo, H., and Jung, E. 2011. “Understanding Security Knowledge and National Culture: A Comparative Investigation between Korea and the U.S,” Asia Pacific Journal of Information Systems (21:3), pp. 51-69. Lowry, P. B., Cao, J., and Everard, A. 2011. “Privacy Concerns Versus Desire for Interpersonal Awareness in Driving the Use of Self-Disclosure Technologies: The Case of Instant Messaging in Two Cultures,” Journal of Management Information Systems (27:4), pp. 163-200. Milne, G. R., and Culnan, M. J. 2004. “Strategies for Reducing Online Privacy Risks: Why Consumers Read (or Don't Read) Online Privacy Notices,” Journal of Interactive Marketing (18:3), pp. 15-29. Pan, Y., and Zinkhan, G.M. 2006. “Exploring the Impact of Online Privacy Disclosure on Consumer Trust,” Journal of Retailing (82:4), pp. 331-338. Petty, R. E., and Cacioppo, J. T. 1986. Communication and Persuasion: Central and Peripheral Routes to Attitude Change, New York: Springer-Verlag. Rai, A., Maruping, L. M., and Venkatesh, V. 2009. “Offshore Information Systems Project Success: The Role of Social Embeddedness and Cultural Characteristics,” MIS Quarterly (33:3), pp. 617-641. Sorrentino, R. M., and Short, J. C. 1986. Uncertainty Orientation, Motivation and Cognition: Foundations of Social Behavior, Guilford Press, New York. Sorrentino, R. M., Bobocel, D. R., Gitta, M. Z., Olson, J. M., and Hewitt, H. C. 1988. “Uncertainty Orientation and Persuasion: Individual Differences in the Effects of Personal Relevance on Social Judgments,” Journal of Personality and Social Psychology (55:3), pp. 357-371. Srite, M., and Karahanna, E. 2006. “The Role of Espoused National Cultural Values in Technology Acceptance,” MIS Quarterly (30:3), pp. 679-704. Yoon, C. 2009. “The Effects of National Culture Values on Consumer Acceptance of E-Commerce: Online Shoppers in China,” Information & Management (46), pp. 294-301.

Twenty-first Americas Conference on Information Systems, Puerto Rico, 2015

5