Impact of Ethics on Consumer Purchase Behaviour

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TABLE OF CONTENTS

ACKNOWLEDGEMENTii

DECLARATIONiii

CHAPTER # 2: LITERATURE REVIEW5

Introduction5

What is Ethics?6

Reviews of Business Ethics Literature7

Equity Theory9

Parties Involved10

Structural Components10

Consumer Equity and Satisfaction11

Consumer behaviour, morals and business ethics13

The Ethical Decision Process20

Hunt and Vitell Framework21

Ferrell and Gresham Framework22

Variables Influencing Consumers' Ethical Judgments23

The Role of Customer Organizational Commitment26

Summary27

REFERENCES29

BIBLIOGRAPHY36

CHAPTER # 2: LITERATURE REVIEW

Introduction

The issue of satisfaction/dissatisfaction permeates the inquiry into interactions between companies and their consumers. Customer satisfaction is commonly argued as the goal of marketing and a key to long-term success (Kennedy, Leigh, 2003, pp. 785-795). Yet, no research in the marketing ethics literature has studied the link between a consumer's ethical judgment and her subsequent satisfaction/dissatisfaction.

Various social psychology theories exist which explain how individuals perceive and react to social interactions, such as in a marketing exchange. These theories have been widely adopted in the marketing literature to explain consumers' evaluations of product performance and satisfaction, or even salesperson performance and satisfaction (Kehoe, 2003, pp. 13-25). More specifically, two psychology theories offer an explanation of consumers' evaluation of unethical marketing behaviour.

Equity theory examines an exchange relationship based on a ratio of one's perceived inputs and outcomes compared to another's ratio. Bagozzi (2005) suggested that an “equitable exchange" must be present for an ongoing relationship to be maintained and prosper. However, another theoretical explanation, cognitive dissonance theory, offers an alternative prediction when different levels of commitment are considered. Each theory predicts how consumers who experience a level of tension due to uneasy feelings or inequitable situations will evaluate and react to the situation (Gronhaug, Gilly, 2006, pp. 165-183).

What is Ethics?

Ethics as defined by the American Heritage Dictionary is "the study of the general nature of morals and of the specific moral choices to be made by the individual in his relationship with others." Although Ferrell, Gresham and Fraedrich (2009) contend that "the concept and definition of ethics is often vague because of the term's many nuances" most definitions revolve around the determination of right and wrong, good and bad, just and unjust behaviour of humans.

This determination of right and wrong is spread between many different decision situations and includes not only determination of personal behaviour but also standards of behaviour and judgement of the behaviour of others (Gundlach, Patrick, 2003, pp. 35-46).

Sims (2002) in giving the etymological background of the term ethics states that it is from the Greek word ethos meaning character or custom. Many researchers in the business literature have taken the definition of ethics a step farther, determining a definition of business ...