The use of chatbots is becoming widespread as they offer significant economic opportunities. At the same time, however, customers seem to prefer interacting with human operators when making inquiries and as a result are not as cooperative with chatbots when their use is known. This specific situation creates an incentive for organizations to use chatbots without disclosing this to customers. Will this deceptive practice harm the reputation of the organization, and the employees who work for them? Across four experimental studies, we demonstrate that prospective customers, who interact with an organization using chatbots, perceive the organization to be less ethical if the organization does not disclose the information about the chatbot to their customers (Study 1). Moreover, employees that work for an organization which requires them to facilitate the deceptive use of a chatbot exhibit greater turnover intentions (Study 2) and receive worse job opportunities from recruiters in both a hypothetical experimental setting (Study 3) and from professional job recruiters in the field (Study 4). These results highlight that using chatbots deceptively has far reaching negative effects, which begin with the organization and ultimately impact their customers and the employees that work for them.
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