Issue link: https://www.e-digitaleditions.com/i/57338
Research Building Trust In the Virtual World Now that companies are scop- ing out the promotional and community-building potential of the Internet, they're faced with the ques- tion of how to make the most of an online presence. Research from marketing professors Constance Porter and Naveen Danthu suggest that these companies should pay special attention to one thing: building trust. On the Web, too many "encourage firms to be proactive in their role as sponsors of virtual com- munities, rather than remain passive actors in the virtual community environment." Their paper, "Cultivating Trust and Harvesting Value in Virtual Communities," was published in the January issue of Management Science. Constance Porter CFOs Pay Up opment, and demonstrating loyalty to the company. To achieve a sense of companies emphasize style over substance, say Por- ter of University of Notre Dame's Mendoza College of Business in Indiana and Danthu of Georgia State University's Robinson Col- lege of Business in Atlanta. To forge a bond with customers, firms must make sure that customers feel that they are part of the com- pany and have some influence over its products and services. For their study, Porter and Dan- Naveen Danthu trust, companies need to do two things, say the researchers. First, they must provide customers with access to information that is timely, relevant, and important to the company's plans. Second, thu conducted a 12-minute online survey of individuals who reported they were current or past members of company-sponsored virtual com- munities. Participants were asked to rate the site's content and inter- activity, as well as their overall trust in the marketer. The researchers received responses from 663 indi- viduals from more than 60 different virtual communities. The researchers found that if con- sumers perceive a virtual community as well-designed and trustworthy, they'll be more likely to reciprocate by sharing personal information, cooperating in new product devel- 56 BizEd MARCH/APRIL 2008 the information must be credible and transparent. "Consumers have become skeptical of marketer- controlled communications," says Porter. "Our findings suggest that consumers will tolerate a certain degree of opportunistic behavior from firms as long as they are perceived as trustwor- thy in how they provide value via the virtual community." Porter and Danthu note that, while many studies have demon- strated the value of virtual com- munities to consumers, theirs focused on their value to firms. In the future, the researchers plan to look more closely at how a consumer's gender may affect the trust-building pro- cess in a firm-sponsored virtual community. Danthu hopes that the results of this study will Rani Hoitash Karla Johnstone Chief financial officers of public compa- nies are under increased pressure as part of the fallout from corpo- rate scandals. Not only that, their compensation is increasingly tied to their success in promoting cor- porate accountability, according to a study by Rani Hoitash, account- ing professor at Bentley College in Waltham, Massachusetts; Karla Johnstone, accounting professor at the University of Wisconsin- Madison; and Udi Hoitash, a doc- toral student at Rutgers University in Newark, New Jersey. The study looked specifically at 635 CFOs in 2005. The researchers found that CFOs are now as accountable as CEOs when it comes to certi- fying financial reports. The CFOs in this study who reported ineffective internal controls received a reduction in their bonuses. Five percent of this group had prior experience as audit firm partners. This group received higher