Seal of Approval and Multidimensionality of Perceived. Trustworthiness in Online Service Adoption

Transcription

1 Seal of Approval and Multidimensionality of Perceived Trustworthiness in Online Service Adoption Abstract This paper examines the concept of perceived trustworthiness and its effect on adoption of online service. Perceived trustworthiness has been argued as a higher-level concept reflected by three distinct beliefs: (1) perceived ability (the extent to which the trustee is perceived as competent), (2) perceived integrity (the extent to which the trustee is perceived as being adherent to a set of dependable and reliable principles), and (3) perceived benevolence (the extent to which the trustee is perceived as caring beyond an egocentric profit). An experiment based on an online service was conducted with 112 subjects at a major mid-west university. Modeled as a second-order factor, perceived trustworthiness was found to have a significant effect on intention to adopt the online service. Consistent with TAM, perceived usefulness and perceived ease of use were found to have significant effects on intention. Furthermore, perceived usefulness was found to have a significant effect on perceived trustworthiness. This paper also examines the effect of seal of approval by TRUSTe on the three beliefs of trustworthiness. It was found that TRUSTe seal improved perceived integrity but not perceived ability and perceived benevolence. The multidimensionality of perceived trustworthiness, and its relations with perceived usefulness and seal of approval, provide new insights on understanding adoption of online service. 1

2 Introduction The Internet has become the fastest growing marketplace on earth. However, while the technological factors favor the growth of e-commerce, human factors seem to hinder the growth to the full potential. Specifically, the fear of online misconduct has become a major inhibitor of e-commerce adoption (Cole 1998, Rose et al. 1999). For example, the lack of trust is by far the major reason that individuals do not purchase online (Hoffman et al. 1999), as demonstrated by the fact that only 29% of people in the United States who use the Internet trust Web sites that sell products or services (Hansen and Borland 2002). The Better Business Bureau asserts that trust is the critical enabling element for understanding consumer behaviors online. Trust is also a major concern in the business community (Legard 1999). According to VISA, only 5% of its member sellers trust e-commerce. Also, some recent dot.com failures have been attributed to the seller s inability to create a strong trusting relationship with customers (DiSabatino 2000). The Better Business Bureau realizes the need to promote online trust in order to facilitate e-commerce (Cole 1998), and places a great importance on creating a trustworthy relationship with consumers (Bodoff 1999). Understanding the acceptance of new technology has long been an important topic in information systems research, with one of the premier works being the Technology Acceptance Model (TAM). The model has been empirically tested with highly validity in explaining and predicting user adoption of information technology. However, online services are different from traditional offline technologies in the sense that online services expose consumers to additional risks such as credit card fraud and misuse of confidential information. Recent research has suggested that trust be incorporated into TAM for further understanding the adoption of e-commerce (e.g. Pavlou 2001). As a result, this paper examines the concept 2

3 of perceived trustworthiness and its effect on the adoption of online service. In addition, this paper also examines the effect of seal of approval such as one by TRUSTe on perceived trustworthiness. Trust The term trust has been used in literature in many different ways, and may generally refer to either a behavioral intention of the trustor, or a set of cognitive beliefs about the trustee (Rossiter and Pearce 1975, Lewis and Weigert 1985, McKnight et al. 1998). The behavioral intention aspect of trust deals with a person s willingness to accept vulnerability to others under conditions of inter-dependence. For example, Giffin (1967) defined trust as reliance upon the characteristics of an object, or the occurrence of an event, or the behavior of a person in order to achieve a desired but uncertain objective in a risky situation (p.105). Rotter (1971) defined interpersonal trust as an expectancy held by an individual or a group that the word, promise, verbal, or written statement of another individual or group can be relied on (p.444). Moorman et al. (1992) and Moorman et al. (1993) define trust in a similar manner. Trust is a willingness to rely on an exchange partner in whom one has confidence (Moorman, et al. 1993, p.315). McAllister (1995) defined trust as the extent to which a person is confident in, and willing to act on the basis of the words, actions, and decisions of another (p.25). In a comprehensive review of the management research on trust, Rousseau et al. (1998) conclude that a common element is that trust deals with the intention to accept vulnerability based upon positive expectations of the intentions or behavior of another (p.395). In general, the behavioral intention aspect of trust suggests that the concept plays an important role in determining behavior in situations involving risk, in which the adoption of online service is one since it often involves the providing of personal 3

4 information such as , and subject to risk that involves the misuse of information. Trustworthiness Ability, Integrity and Benevolence The cognitive aspect of trust, or sometimes referred as trustworthiness (e.g. Mayer et al 1995), refers to certain characteristics of the trustee as perceived by the trustor (Morgan and Hunt 1994). Trustworthiness is often argued to be a multidimensional concept that consists of several beliefs (Rossiter and Pearce 1975, Lewis and Weigert 1985, Butler 1991, Ganesan 1994). For example, Rotter (1971) looked at trustworthiness as some beliefs held by an individual or a group that the word, promise, verbal, or written statement of another individual or group can be relied on. The multidimensionality of trustworthiness could be traced far back to Aristotle s Rhetoric, which suggested three characteristics of trustworthiness: intelligence, good character and goodwill (e.g. Giffin 1967). Different aspects of trustworthiness were examined in the study of social relations. For example, Blau (1964) suggested that trustworthiness consisted of three distinct beliefs, namely integrity, benevolence, and ability. Similar distinction between integrity and benevolence was also made by Luhmann (1979). The multidimensional aspects of trust were also examined in the study of business relations. For example, Schurr and Ozanne (1985) looked at trustworthiness as the beliefs that a party s word or promise is reliable and that a party will fulfill his/her obligations. Dwyer et al. (1987) defined trustworthiness as beliefs relating to the exchange partner s ability and willingness to take part in the social exchange. Ganesan (1994) looked at trustworthiness as expectation based on partner s experience, reliability and benevolence. Morgan and Hunt (1994) defined trust as beliefs in another person s reliability and integrity. Hart and Saunders (1997) defined trustworthiness as the perception of the partners competence, openness, 4

5 caring, and reliability. In their comprehensive review of literature, Mayer et al. (1995) argued that, despite the use of different terms, three distinct beliefs, namely ability, integrity and benevolence, appear to reflect a major portion of trustworthiness across different studies. Mayer et al (1995) defined ability as the group of skills that enable a trustee to be perceived competent within some specific domain. Integrity is adherence to a set of principles thought to make the trustee dependable and reliable, according to the trustor. Benevolence is the extent to which a trustee is believed to feel interpersonal care and concern, and the willingness to do good to the trustor beyond an egocentric profit. In other words, ability is related to whether the trustee can do what they claim they are able to do. Integrity is related to whether the trustee will do what they promise or are reasonably expected to do. Benevolence is related to whether the trustee will do what they are not generally expected but do so with the interests of the trustor in mind. These three beliefs seem to be common across many settings and play a central role in management studies of trust. Such framework was used in the studying virtual teams in the Internet environment, in which the three beliefs were found to have significant effects on the member s trusting behavioral intentions (Jarvenpaa et al. 1998). The study applies this framework in the context of online service adoption and suggests that the overall perception of an online service provider (i.e. perceived trustworthiness) reflects on three dimensions. Perceived ability is the extent to which an online service provider is perceived as competent to provide the online service. Perceived integrity is the extent to which an online service provider is perceived as dependable or reliable in terms of honoring what they promise or are reasonably expected to do. Perceived benevolence is the extent to which an online service provider is perceived as caring about the users beyond what they are reasonably expected. Perceived trustworthiness is hypothesized as a second-factor with 5

6 perceived ability, perceived integrity and perceived benevolence as first-order factors. In addition, perceived trustworthiness is hypothesized to have a direct effect on intention to adopt an online service. Adoption of Online Service Adoption of information technology has been an important topic in IS research, with the Technology Acceptance Model (TAM) (Davis 1989) being the most widely used theoretical framework. The purpose of TAM was to provide an explanation of the determinants of computer acceptance that is general, capable of explaining user behavior across a broad of end-user computing technologies and user populations, while at the same time being both parsimonious and theoretically justified (p.985). TAM includes two constructs, namely perceived usefulness and perceived ease of use. The former is defined as the degree to which a person believes that using a particular system would enhance his or her job performance and the latter is defined as the degree to which a person believes that using a particular system would be free of effort (Davis 1989, p.15). TAM postulated that these two constructs are two important factors affecting behavioral intention to use a system. In addition, perceived usefulness is influenced by perceived ease of use, and they together are affected by external variables, which could be system features, training, documentation, and user support. As suggested by TAM, we hypothesize that both perceptions (i.e. perceived usefulness and perceived ease of use) of an online service will have direct effects on the intention to adopt the online service. Furthermore, easy site navigation and strong fulfillment of orders and services were suggested as effective ways to communicate trustworthiness (Cheskin 2000). Therefore, we hypothesize that the perceptions of an online service itself (i.e. perceived usefulness and 6

7 perceived ease of use) will also have direct influences on the perceived trustworthiness of the service provider. Seal of Approval Besides focusing on the service itself, another common practice to communicate trustworthiness is having a seal of approval obtained from a credible third party. An example is the TRUSTe program. Founded in 1997, TRUSTe is an individual, non-profit organization dedicated to build trust and confidence on the Internet based on respect for personal identity and information. TRUSTe currently has the largest privacy seal program with 2000 web sites certified throughout the world. It has been rated as the most trust-involving seal online and the most visible symbol on the Internet (Cheskin Research 2000). TRUSTe seal is awarded to sites that adhere to established privacy principles and agree to comply with ongoing TRUSTe oversight and consumer resolution procedures. By displaying the seal of approval, web sites send a clear signal to users that they have openly agreed to disclosure their information gathering and dissemination practices, and that their disclosure is backed by credible third party assurance (Benassi 1999). All Web sites that display the TRUSTe seal must disclose their personal information collection and privacy practices in a straightforward privacy statement, generally a link from the home page. Specifically, the disclosure includes the nature of personal information being gathered; ways information gathered will be used; with whom the information will be shared with; choices available regarding how information collected is used; safeguards in place to protect information from loss, misuse, or alteration; and ways in which inaccuracies in information can be updated and corrected (TRUSTe). This study will look at the effect 7

8 of TRUSTe seal on the three dimensions of perceived trustworthiness. To summarize, this study examines the concept of perceived trustworthiness and its effect on intention to adopt an online service. As suggested by TAM, intention to adopt an online service is influenced by the user s perceived usefulness and perceived ease of use of the service. In addition, perceived trustworthiness of the online service provider is hypothesized as another factor affecting intention, and can be affected by perceived usefulness and perceived ease of use of the online service. Finally, the effects of seal of approval by TRUSTe on the three dimensions of perceived trustworthiness will also be examined. The proposed model is depicted in Figure 1. Data Collection An experiment was conducted based on a free online service that consolidates all personal information at other web sites in one comprehensive view. Users provide their login information (i.e. usernames and passwords) of their accounts at other web sites, such as credit card, banking, shopping, , etc. The service then gathers the information from the other web sites so that the user can access all the information with a single username and password (see Figure 2 for a screenshot of the service). However, given the nature of service, users are highly vulnerable to potential misuse of sensitive personal information. Data was collected from 112 subjects recruited on the campus of a major mid-west university. Subjects were told to evaluate an online service and confirmed that they had no previous experience with this particular service or similar services. Subjects were randomly assigned to one of the two conditions. In the first condition (no TRUSTe seal condition), there is no TRUSTe seal displayed on the online service. In the second condition (TRUSTe seal 8

9 condition), TRUSTe seal is displayed and linked to the description of the privacy policy approved by the seal. Subjects in both conditions were provided a guide to the service for approximately 30 minutes. Subjects in the second condition were also asked to explicitly click on the TRUSTe seal which linked to the seal description. At the end of the experiment, subjects were provided with a questionnaire that consisted of multiple items for each of the six constructs, namely intention, perceived usefulness, perceived ease of use, perceived ability, perceived integrity and perceived benevolence. All items were measured in 7-point scale (see Table 1), with perceived ability, perceived integrity and perceived benevolence adapted from Mayer and Davis (1999), and perceived usefulness, perceived ease of use and intention adapted from Davis (1989). Data Analysis and Results The measurement model was evaluated for reliability and construct validity. Reliability was assessed using the Cronbach s alpha (see Table 1). The alpha values range from 0.85 to 0.95, all above the recommended value of 0.7 (Nunnally 1978). Construct validity was assessed by performing a confirmatory factor analysis. The overall fit of the model was assessed by multiple fit indices (numbers in parentheses indicate the recommended value for a good model fit), including chi-square, RMSEA( 0.08), NNFI( 0.90), CFI( 0.90) and IFI( 0.90) (Bentler and Bonett 1980). The measurement model has chi-square= (d.f.=362, p 0.05), RMSEA=0.068, NNFI=0.90, CFI=0.91 and IFI=0.91. All indices except chi-square suggest a good fit of the measurement model. With satisfactory measurement model overall, the loadings of individual items and the correlations among the factors were evaluated. All the items have significant loadings on their respective factors (see Table 1), hence demonstrating convergent validity. The correlations among the factors are significant 9

10 different from unity (see Table 2), hence demonstrating discriminant validity (Anderson and Gerbing 1988). Given a satisfactory measurement model, the structure model was then evaluated. The structural model has chi-square of (d.f.=368, p<0.05). Other fit indices, such as RMSEA(0.066), NNFI(0.90), CFI(0.91) and IFI(0.91), suggest a good fit of the structural model. The path diagram of the model is depicted in Figure 3. Consistent with TAM, perceived usefulness and perceived ease of use have significant effects on intention, and perceived ease of use has also a significant effect on perceived usefulness. As a second-order factor, perceived trustworthiness is reflected by three first-order factors, namely perceived ability, perceived integrity and perceived benevolence. The highly standardized coefficients ( loadings ) from perceived trustworthiness to the three first-order factors supports the validity of perceived trustworthiness as a higher-order factor with three lower-order factors. In addition, perceived trustworthiness has a significant effect on intention. perceived trustworthiness is significantly affected by perceived usefulness. Furthermore, However, the effect of perceived ease of use on perceived trustworthiness is not significant. In other words, a useful online service does enhance the perceived trustworthiness of the service provider. However, perceived trustworthiness cannot be directly enhanced by improving the ease of use of the online service. The effects of TRUSTe seal on perceived ability, perceived integrity and perceived benevolence were examined using MANOVA that takes into accounts of the correlations among the three variables. The Wilk s Lambda of the MANOVA test is significant (F=4.08, p<0.01), indicating that the two conditions are significantly different in at least one of the dependent variables. To investigate the differences for each of the variables, three separate t- tests were performed and adjusted using Bonferroni method to control for overall type I error (see Table 3). A significant difference was found between the two conditions in perceived 10

11 integrity (t=2.88, p<0.01), but no significant difference in perceived ability (t=0.59, p>0.05) and perceived benevolence (t=1.44, p>0.05). In other words, TRUSTe seal does improve the perceived integrity of the online service provider, but not perceived ability and perceived benevolence. Discussion This study investigates the concept of perceived trustworthiness and its effect on adoption of online service. Perceived trustworthiness has been suggested by past literature as a multidimensional concept, a concept that generally consists of three dimensions, namely perceived ability, perceived integrity and perceived benevolence. Our data is consistent with the covariance structure implied by the proposed model with perceived trustworthiness as a second-order factor. Our results suggest that, when evaluating the trustworthiness of an online service provider, the users will consider whether the service provider can do what it claims it can (i.e. ability); whether the service provider will do what it promises or is reasonably expected (i.e. integrity); and whether the provider will do what is to the best interests of the users even though it is not obligated to. These three considerations together reflect the overall trustworthiness of the service provider and has a direct positive effect on the intention to adopt the online service. Consistent with TAM, perceived usefulness and perceived ease of use have direct positive effects on intention to adopt an online service, and perceived ease of use also has a direct positive effect on perceived usefulness. Similar to the adoption of other technologies, intention to adopt an online service is driven by perceived usefulness and perceived ease of use of the service. In addition, perceived trustworthiness of the service provider is identified 11

12 as another factor affecting the adoption decision. The direct influence of perceived usefulness on perceived trustworthiness suggests that the trustworthy image of the service provider can be enhanced by providing a useful service. For example, having some unique and advanced features may enhance the perceived ability of the provider; having a simple function to allow users to change their privacy preferences easily may enhance the perceived integrity of the provider; and providing a informative help page or a contact page to customer service may enhance the perceived benevolence of the provider. In fact, the direct effect of perceived usefulness to perceived trustworthiness reinforces the importance of perceived usefulness in the adoption of online service. Given the importance of perceived trustworthiness in the adoption of online service, online service providers have been trying to improve their trustworthy images in addition to providing useful services. One common practice is to obtain a seal of approval from a credible third party such as TRUSTe. Our findings suggest that TRUSTe seal has a significant effect on only perceived integrity, but not perceived ability and perceived benevolence. This is reasonable given that the nature of TRUSTe seal is mainly on privacy. The assurance TRUSTe seal provides is that the service provider will collect and use the information the way it is stated in the privacy policy. As long as the service provider collects and uses the information in the way it is stated, the service provider is qualified for the TRUSTe seal. The seal does not assure that the service provider has superior ability in providing data security, or high ethical standard with the interests of the users in mind when sharing information with third parties. Finally, the multidimensionality of perceived trustworthiness suggests that the concept consists of three dimensions, namely perceived ability, perceived integrity and perceived benevolence. Each dimension may be of different importance to different online services. Therefore, different online services may require different or even multiple seals of approval. 12

13 For example, if the ability to provide data security is important, an online service provider may need a seal of approval such as VeriSign instead to TRUSTe, or maybe both. Online service providers need to look at the nature their services, the concerns of the users, and the dimensions of trustworthiness users need to be assured. Different seals provide different kind of assurance, and providers need to make sure the assurance provided to the users cover the important dimensions. Limitations The findings of this study must be considered in light of the study s limitations. As suggested by past literature, trustworthiness is context specific (Lewis and Weigert 1985; Luhmann 1979), depending on the nature, details, and history of the interaction between the parties (Gefen and Silver 1999; Rousseau, et al. 1998). First of all, this study is based on one online service that make use of login information provided by the users to consolidate information from different sources. Hence, it exposes user to potential risks such as misuse of information. However, not all online service involve the same degree of risk. Services such as web-based may involve lower risk, especially if the user can choose to provide fake personal information. Hence the effects of trustworthiness on intention may be different for different online services. Secondly, the study only investigates the seal of approval by TRUSTe, which focus on protecting privacy of the users. There are other seals of approval, such as BBB Online, VeriSign, BizRate, etc. that provide different kind of quality assurance. Future studies are encouraged to investigate the nature of different seals of approval and their effectiveness in providing assurance to users. Thirdly, the meaning of TRUSTe seal was clear to the subjects in this study since they were asked to explicitly click on the TRUSTe seal and provided with details on the nature of the seal. In practice, not all users have the correct 13

14 interpretations of the assurance different seals of approval provide. TRUSTe assures that the web sites publicly discloses their privacy policy and comply to it. Unfortunately, the seal is sometimes misinterpreted by some users that web sites displaying a TRUSTe seal will not disclose any of their information to any third party. The fact is as long as web sites explicitly state that information will be shared with third party, it complies with the requirements of TRUSTe. Furthermore, some users may not even notice the seal when visiting a web site, although TRUSTe seal is among the top five seals recognized on the Internet (Cheskin Research 2000). The effects of seal of approval on improving trustworthiness depend on whether the seal is recognized and properly understood. Conclusion The tremendous growth of the Internet has provided a lot of business opportunities. However, as with other technologies, human reluctance has always been one of the biggest challenges. In the context of online service, trustworthiness of the service providers have significant effects on the adoption decision. In addition, trustworthiness is a multidimensional that consists of ability, integrity and benevolence. The three dimensions are conceptually distinct yet highly related, and they maybe of different importance for different online services. Online service providers should look at the nature of their services and understand the kind of assurance users are looking for. Seal of approval is a popular way to improve the trustworthiness of an online service provider, and given the multidimensionality of trustworthiness, online service providers should decide of the kind of seal(s) of approval they desire. However, while trustworthiness is an important factor to the adoption of online service, usefulness remains an extremely important factor and should not be overlooked. 14

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18 Figure 1: The Proposed Model 18

19 Figure 2: Screenshot of the Online Service 19

20 Figure 3: Path Diagram of the Proposed Model 20

21 Table 1: Measurement Items Item Factor Loadings Cronbach s Alpha Ability(1) I would find this company competent in providing the service. Ability(2) The company is very capable of providing this 0.92 Web service. Ability(3) This company has much knowledge about 0.87 providing this Web service. Ability(4) I feel very confident about this company s skills 0.77 in providing this Web service. Ability(5) This company is well qualified in providing the 0.80 service. Integrity(1) The company has a strong sense of justice Integrity(2) I never have to wonder whether this company 0.88 will stick to its word. Integrity(3) This company tries hard to be fair dealings with 0.73 the users. Integrity(4) The company s actions and behaviors are very 0.70 consistent. Integrity(5) Sound principles seem to guide this company s 0.80 behaviors. Benevolence(1) I will find this company caring its customers when providing the service. Benevolence(2) This company is very concerned about users 0.81 welfare. Benevolence(3) Users needs and desires are very important to 0.81 this company. Benevolence(4) This company really looks out for what is 0.80 important to the users. Benevolence(5) This company will go out of it way to help the 0.73 users. Ease of Use(1) Learning to use this Web service would be easy for me. Ease of Use(2) I would find it easy to get this Web service to do 0.90 what I want it to do. Ease of Use(3) My interaction with this Web service would be 0.80 clear and understandable. Ease of Use(4) I would find this Web service to be flexible to 0.87 interact with. Ease of Use(5) It would be easy for me to become skillful at using this Web service

22 Usefulness(1) Using this Web service would enable me to manage my personal information at various Web sites more quickly. Usefulness(2) Using this Web service would improve my 0.76 performance in managing my personal information at various Web sites. Usefulness(3) Using this Web service would increase my 0.89 productivity. Usefulness(4) Using this Web service would enhance my 0.85 effectiveness in managing my personal information at various Web sites. Usefulness(5) Using this Web service would make it easier to 0.79 manage my personal information at various Web sites. Usefulness(6) I will find this Web service useful in managing 0.87 my personal information at various Web sites. Intention(1) I want to sign up this Web service Intention(2) I am likely to sign up for the Web service Intention(3) I intend to sign up for the Web service

23 Table 2: Correlations among Factors Ability Integrity Benevolence Ease of Use Usefulness Intention Ability 1.00 Integrity Benevolence Ease of Use Usefulness Intention

24 Table 3: Results of T-Tests Group 1 Group 2 (No TRUSTe Seal) (TRUSTe Seal) Variable Mean Mean t-test p-value (N=56) (N=56) Ability Integrity Benevolence