No Small Matter: How Company Size Affects Consumer Expectations and Evaluations

Abstract

The emphasis on business size has become more overt in recent years. However, it is not clear how company size influences consumers' evaluations. Five experiments investigate the effect of size on consumers' expectations and evaluations of company behaviors. Consumers expect higher communion from small compared to large companies, and consequently, small relative to large companies garner lower evaluations when they exhibit low communion behaviors. These high communion expectations are driven by the relatively lower marketplace power of small companies. While study 1 provides real-world evidence for the effect of company size on evaluations of company behaviors, studies 2A and 2B demonstrate that perceptions of power underlie the effect of company size on expectations for communion. Studies 3A and 3B indicate that when a company engages in low communion behavior, small relative to large companies garner lower evaluations and this effect is driven by consumers' perceived violation of expectations. Incorporating additional studies, two meta-analyses conducted with four studies for consumer expectations and six studies for consumer evaluations provide confirmatory evidence in support of our hypotheses. This research demonstrates that how companies are perceived in terms of size and power creates meaning for consumers that drives their expectations and subsequent evaluations.

In Times of Trouble: A Framework for Understanding Consumers’ Responses to Threats

“…In addition, many individual difference variables could influence the effects of threat-induced ontological security on how consumers respond. These include agency-communion focus ( Bakan 1966 ; Yang and Aggarwal 2019 ); political ideology ( Jung et al. 2017 ; Ordabayeva and Fernandes 2018 ); religiosity ( Kurt, Inman, and Gino 2018 ; Mathras et al.…”

Should Your Brand Pick a Side? How Market Share Determines the Impact of Corporate Political Advocacy

“…Our primary goal in Experiment 1b was to replicate our previous findings while controlling for brand perceptions (size, market share, familiarity, and quality). In this context, it is possible that the observed effect might stem from consumers responding more favorably to small versus large companies (Paharia, Avery, and Keinan 2014); that is, consumers might view small (large) companies as more (less) communal, leading them to be more (less) amenable to the companies’ political engagement (Yang and Aggarwal 2019). Although we did not provide participants with information about company size in Experiment 1a, it is possible that our manipulations drove such inferences.…”

“…First, future work might seek to understand the factors that operate in tandem with market share and authenticity to influence the outcome of CPA. For example, consumers view purchasing from small brands as a form of "purchase activism" (Paharia, Avery, and Keinan 2014), and such brands are viewed as higher in communion (Yang and Aggarwal 2019). As such, small-share brands may especially benefit due to the high fit between purchase motive and the brands' political engagement.…”

Creating a Comprehensive Method for the Evaluation of a Company

“…Eight financial and seven nonfinancial indicators and their evaluation using the TOPSIS method are included in the comprehensive evaluation of companies by [53]. The size of a company with respect to its evaluation is addressed by Yang et al [54]; the methodology of analysis of dynamic network data packages in order to provide a comprehensive assessment (including the inclusion of CSR factors) for the insurance sector is provided by Kuo et al [55]. Hsu and Lee [56] test the Random Forest method for comprehensive audits.…”