This article is a within- and cross-country examination of the impact of fair trade certification on consumers’ evaluations and attitudes toward ethically certified products. Across three experimental studies, the authors analyze how different levels of brand familiarity and fair trade expertise impact consumer decisions. The authors study this phenomenon across markets with different social orientation cultures to analyze potential dissimilarities in the way consumers evaluate and behave toward ethically certified products. Findings suggest that fair trade certifications enhance product valuations. However, (...) this effect is especially observed for low familiar brands, once the level of fair trade expertise increases. Findings also suggest that there are individual cultural differences with respect to social and environmental labeling expertise that may account for some of the unexplained variation in choice behaviors observed across countries. Results indicate that especially in more (mature) individualistic markets (vs. collectivistic) consumer ethical behavior seems to be greatly influenced by consumers’ perceptions about the eligibility of brands using (or not) fair trade. This effect is strengthened by the significant mediating role of consumers’ ethicality perceptions on the relationship between fair trade and the willingness to pay for brands. (shrink)

The organizational trust literature relies strongly on the notion of trust and trustworthiness as a calculative cause-and-effect relationship aimed at assessing the advantages and disadvantages between two actors. This utilitarian notion of trust has been critiqued by studies that highlight _construct inconsistencies_ related to utilitarian trust, which, it is argued, is deficient, incomplete and misleading. Our empirical study of the Dutch insurance sector identifies and categorizes three _process inconsistencies_ that help to explain why the calculation of trust in a utilitarian (...) sense is seemingly impossible in practice and is a barrier to the unambiguous assessment of individual needs and individual utility. These process inconsistencies successively concern insufficient information, complex behavioural dynamics, and a convoluted pattern of stakeholder influence to assess utility in trust relationships, specifically within complex socio-economic systems. Our findings contribute to the trust literature by proposing a classification of the previous critiques on utilitarian trust, and by showing that in scenarios of systematic rather than dyadic trust, process inconsistencies may be too strong to endure a ‘leap of faith’, at least with regard to suspension and assessing utilitarian trust in these more complex socio-economic systems. (shrink)

In the current socioeconomic environment, brands increasingly need to portray societal and ethical commitments at a corporate level, in order to remain competitive and improve their reputation. However, studies that relate business ethics to corporate brands are either purely conceptual or have been empirically conducted in relation to the field of products/goods. This is surprising because corporate brands are even more relevant in the services sector, due to the different nature of services, and the subsequent need to provide a consistent (...) high-quality customer experience across all the brand–customer interactions and touch-points. Thus, the purpose of this article is to study, at a corporate brand level and in the field of services, the effect of customer perceived ethicality of a brand on brand equity. The model is tested by structural equations, using data collected for eight service categories by means of a panel composed of 2179 customers. The test of measurement equivalence between these categories is conducted using generalizability theory. Confirmatory factor analysis marker technique is applied in order to check for common method variance. The results of the hypothesized model indicate that customer perceived ethicality has a positive, indirect impact on brand equity, through the mediators of brand affect and perceived quality. However, there is no empirical evidence for a direct effect of customer perceived ethicality on brand equity. (shrink)

Ethical consumerism has been dramatically increasing in recent decades, but in service sector, fewer research has been conducted especially in the fast-food industry. In this paper, we determined empirically the consumer perceived ethicality effects on repurchase intentions as well as on word of mouth through brand image partial mediation and customer expertise moderation in fast-food sector. The data were collected from 307 consumers of the fast-food restaurants through self-administered questionnaires. Common method variance and social desirability bias were measured before testing (...) hypotheses, and the data were investigated by SPSS and AMOS 21st version. The empirical results demonstrated that consumer perceived ethicality effects on repurchase intentions directly and through brand image partial mediation indirectly. Moreover, the direct and positive effects of repurchase intentions on word of mouth were experienced. This study generalized the results of previous studies of consumer perceived ethicality conducted in western culture in Pakistani fast-food sector. This study also proposed that firms should tackle ethical concerns at corporate and operational strategy levels to improve consumers’ behavioral intentions. (shrink)

The ethical behavior prevalent in an organization often determines business success or failure. Much research in the business context has scrutinized ethical behavior, but there are still few insights into its roots; this study furthers this line of inquiry. In line with identity work theory, we examine how employees’ identification with a family business shapes internal ethical decision-making processes. Because it is individuals who engage in decision-making—be it ethical or not—our research perspective centers on the individual level. We followed an (...) inductive, qualitative approach and conducted interviews with 19 employees in seven family businesses. We found that individuals engage in identity work when they identify as individual family firm employees and when they identify with the perceived characteristics of the family firm. These processes of identification, in turn, influence how employees cope with ethical situations. Our findings contribute to ethics and family business research, as well as to identity theory. (shrink)

Disparate attempts exist to identify the key components that make an ethics pedagogy more effective and efficient. To integrate these attempts, a review of 408 articles published in leading journals is conducted. The key foci of extant literature are categorized into three domains labeled as approach, content, and delivery, and a comprehensive framework for ethics pedagogy developed. Within each of these domains, binaries that reflect two alternatives are identified. Approach, the philosophical standpoint, can be theory-laden or real-world connected. Content, the (...) constituencies addressed, can have a focus on breadth or depth. Delivery, the execution of the adopted pedagogy, can be traditional or innovative. The review of articles also identifies the lack of pedagogies that comprehensively focus on all the binaries across domains. The other substantive contribution of this article addresses this gap by developing a generic pedagogy—Integrative Live Case—based on the ACD framework. Based on an incident that is currently unfolding, this pedagogy allows integration of binaries across the three domains. It also allows for a modular course plan that can accommodate varied pedagogical preferences. Volkswagen Dieselgate is presented as a stylized example to showcase the significant advantages of using this pedagogy. (shrink)

In the past few decades, a growth in ethical consumerism has led brands to increasingly develop conscientiousness and depict ethical image at a corporate level. However, most of the research studying business ethics in the field of corporate brand management is either conceptual or has been empirically conducted in relation to goods/products contexts. This is surprising because corporate brands are more relevant in services contexts, because of the distinct nature of services and the key role that employees have in the (...) services sector. Accordingly, this article aims at empirically examining the effects of customer perceived ethicality in the context of corporate services brands. Based on data collected for eight service categories using a panel of 2179 customers, the hypothesized structural model is tested using path analysis. The results show that, in addition to a direct effect, customer perceived ethicality has a positive and indirect effect on customer loyalty, through the mediators of customer affective commitment and customer perceived quality. Further, employee empathy positively influences the impact of customer perceived ethicality on customer affective commitment, and customer loyalty positively impacts customer positive word-of-mouth. The first implication of these results is that corporate brand strategy needs to be aligned with human resources policies and practices if brands want to turn ethical strategies into employee behavior. Second, corporate brands should build more authentic communications grounded in their ethical beliefs and supported by evidence from actual employees. (shrink)

Developing trust in a company is a significant part of building the company-consumer relationship. Previous studies have sought to identify the positive consequences of trust such as loyalty and repurchase, but the question of what builds trust remains largely unanswered. To answer the question, we developed a model that depicts the relationships among transparency, social responsibility, trust, attitude, word-of-mouth (WOM) intention, and purchase intention. An online survey was conducted with a US nationwide sample of 303 consumers, and the data were (...) analyzed using the structural equation modeling method. The results indicated that consumers’ perceptions of a corporation’s efforts to be transparent in the production and labor conditions and to be socially responsible by giving back to the local community directly affected these consumers’ trust and attitudes toward the corporation, and indirectly affected their intentions to purchase from and spread positive WOM about the corporation. Theoretical and practical implications are discussed. (shrink)

In an ever more transparent, digitalized, and connected environment, customers are increasingly pressuring brands to embrace genuine corporate social responsibility practices and co-creation activities. While both CSR and co-creation are social and collaborative processes, there is still little research examining whether CSR can boost co-creation. In addition, while previous research has mainly related co-creation to emotional outcomes, limited empirical research has related it to rational and behavioral outcomes. To address these shortcomings in the literature, this paper examines the influence of (...) CSR on customer loyalty, considering the mediating roles of co-creation and customer trust. It also investigates the influence of co-creation on customer trust. The data were collected in Spain in late 2017 using an online survey, and the sample contained 1101 customers of health insurance services brands. Structural equation modeling was used to test the hypothesized relationships simultaneously. The results show that CSR influences customer loyalty both directly and indirectly through co-creation and customer trust. However, the indirect impact is the stronger of the two, implying that embracing co-creation activities and developing customer trust can make it easier for CSR practices to enhance customer loyalty. In addition, co-creation has a direct effect on customer trust. (shrink)

In order to be competitive in an era of ethical consumerism, brands are facing an ever-increasing pressure to integrate ethical values into their identities and to display their ethical commitment at a corporate level. Nevertheless, studies that relate business ethics to corporate brands are either theoretical or have predominantly been developed empirically in goods contexts. This is surprising, because corporate brands are more relevant in services settings, given the nature of services, and the fact that services settings comprise a greater (...) number of customer–brand interactions and touch points than goods contexts. Accordingly, the purpose of this article is to empirically examine the effects of customer perceived ethicality of corporate brands that operate in the services sector. Based on data collected for eight service categories using a panel of 2179 customers, the hypothesized structural model is tested using path analysis. The generalizability theory is applied to test for measurement equivalence between these categories. The results of the hypothesized model show that, in addition to a direct impact, customer perceived ethicality has a positive and indirect impact on brand equity, through the mediators of recognition benefits and brand image. Moreover, brand heritage negatively influences the impact of customer perceived ethicality on brand image. The main implication is that managers need to be aware of the need to reinforce brand image and recognition benefits, as this can facilitate the translation of customer perceived ethicality into brand equity. (shrink)

Incivility among employees in frontline encounters is prevalent, but little is known about its impact on customers’ ethics-related perceptions and behaviors. Drawing upon the stimulus–organism–response paradigm, this study examines how witnessing incivility among employees can serve as a social atmospheric cue to influence customers’ perceived ethicality of an organization and their subsequent behaviors. According to our results, in response to employee-to-employee incivility witnessed during frontline encounters, customers perceive the uncivil employees’ organization to have a lower level of ethicality. In turn, (...) customers engage more in unethical behavior and less in customer citizenship behavior. We further demonstrate that the negative effect of uncivil employee-to-employee interactions on customers’ perception of the ethicality of an organization is amplified when customers have an a priori perception that the organization is competent. The findings hold theoretical and practical implications for the management of employee-to-employee incivility and unethical customer behavior during frontline encounters. (shrink)

Consumers have shown increasing interest in products that reflect social and environmental concerns—so-called “sustainable products.” Although consumers typically view sustainability positively, the ethical attributes of products do not always drive their preferences, which implies a trade-off between ethical attributes and other valued attributes. In the current research, we examine how consumers implicitly judge products and services that are more or less congruent with social and environmental concerns and how incongruity between ethical claims and a product’s nature may influence consumers to (...) behave responsibly. The results from two experimental studies show that increasing the strength of ethical claims impairs sophisticated products’ evaluation but enhances simple products’ evaluation. Additionally, the findings reveal that the strength of ethicality on sophisticated products may impair perceptions of product enjoyment to a point at which products are evaluated more favorably when less-ethical claims are used to promote them. For managers, the results highlight an important business consideration, as they reveal the circumstances under which it is worth emphasizing the strength of the sustainability appeal of products or services. Results show that not all consumers are willing to sacrifice taste or quality in their leisure time preferring to seize the day rather than saving the world. (shrink)

Social responsibility is typically examined at the firm level, yet there are instances in which consumers’ social responsibility perceptions of the firm’s product brands differ from social responsibility perceptions with regard to the firm [i.e., corporate social responsibility ]. This article conceptualizes brand social responsibility and delineates it from CSR. Following the development of a BSR scale, this research demonstrates variations in consumers’ social responsibility perceptions across product brands even if they are owned by the same corporation and compete in (...) the same product category. BSR is distinct from CSR, and better predicts consumers’ responses to product brands compared to corporate level measures. Consistent with the conceptual distinction, this research demonstrates the unique contribution of BSR and CSR in predicting product brand and corporate outcomes, respectively. From a theoretical viewpoint, this research is one of the few to examine differences between product brand and CSR. From a managerial viewpoint, the consideration of social responsibility at the product brand level facilitates the assessment of social responsibility perceptions across brands in brand portfolios managed under a mixed-branding or house-of-brands strategy. (shrink)

Although consumers increasingly claim to demand ethical products and state that they are willing to reward firms that are ethical, studies have highlighted that there is a significant gap between consumers’ explicit attitudes toward ethical products and their actual purchase behavior. This has major implications for firm policies revolving around business ethics. This research contributes to the understanding of the attitude–behavior gap in ethical consumption that literature has identified but not explored much. We utilize the model of dual attitudes as (...) a basis for the arguments presented in the paper and test them. We suggest that the gap in ethical consumerism exists because individuals have implicit as well as explicit attitudes, which are impacted differentially by stimuli and elicit dissimilar behavioral responses and thus have different implications for business ethics policies. Two longitudinal studies are conducted to better understand the impact of an individual’s dual attitudes on preferences and choice. Our findings support the presence of dual attitudes in consumers. Explicit attitudes are found to be easily influenced by the nature of the stimuli. On the other hand, implicit attitudes are relatively unaffected by the nature of the stimuli present and remain relatively constant. Based on the findings, implicit attitudes guide behavior and determine an individual’s preferences. Even though explicit attitudes react to the stimuli presented, our findings suggest they have no impact on the choice of consumers. These findings improve the understanding of ethical consumption, provide a reason as to why the attitude–behavior gap exists, provide a foundation for future researchers and help firms better understand the impact of perceived business on creating a behavioral shift in ethical consumption. (shrink)

Companies have a moral responsibility to treat customers fairly. One way for companies to do so is to allow their employees to exercise reasonableness in their interactions with customers. We define reasonableness as a latitude or space that exists around expectations in the delivery of service. In this paper, we explore the concept of reasonableness from a customer’s perspective (i.e., perceived reasonableness) and the role that the morals of service personnel play in customers’ perceptions of reasonableness. First, through an open-ended (...) survey on customers’ unreasonable service experiences, we identify themes of perceived reasonableness. We also discuss the role that the morals of service personnel play within these themes. Second, in order to identify the relationships between these themes, we create a cognitive map and discuss the implications of the identified relationships. Finally, we provide directions for future research on reasonableness. (shrink)

Social distance often motivates consumers to increase their interactions through social networking sites. This study identifies antecedents of consumer brand usage and brand connection of SNSs, under the influence of consumer perceived ethics (CPE), during the COVID pandemic and afterward (N = 308). The proposed model was tested using partial least squares-structural equation modeling with AMOS 23. In both periods, this study shows CPE consistently affects consumer engagement and involvement. The results demonstrate that in social isolation, affective engagement has higher (...) relevance to driving Self-Brand Connection (SBC) among consumers and SNSs. On the other hand, CPE was demonstrated to provide consistent and significant effects in both periods, showing its stable capacity to impact brand involvement, engagement, use, and self-connection. In the context of the pandemic, this study demonstrates the consistent effects of CPE and other impacts of Consumer Brand Engagement (CBE) on brand usage and self-connection of SNSs. (shrink)

The use of artificial intelligence (AI) in hiring entails vast ethical challenges. As such, using an ethical lens to study this phenomenon is to better understand whether and how AI matters in hiring. In this paper, we examine whether ethical perceptions of using AI in the hiring process influence individuals’ trust in the organizations that use it. Building on the organizational trust model and the unified theory of acceptance and use of technology, we explore whether ethical perceptions are shaped by (...) individual differences in performance expectancy and social influence and how they, in turn, impact organizational trust. We collected primary data from over 300 individuals who were either active job seekers or who had recent hiring experience to capture perceptions across the full range of hiring methods. Our findings indicate that performance expectancy, but not social influence, impacts the ethical perceptions of AI in hiring, which in turn influence organizational trust. Additional analyses indicate that these findings vary depending on the type of hiring methods AI is used for, as well as on whether participants are job seekers or individuals with hiring experience. Our study offers theoretical and practical implications for ethics in HRM and informs policy implementation about when and how to use AI in hiring methods, especially as it pertains to acting ethically and trustworthily. (shrink)

This article uncovers an important yet overlooked antecedent of brand ethicality that lies beyond the predominant focus on environmental and social actions in the literature: perceived brand authenticity. Perceived authenticity and brand ethicality strongly drive consumer decision making, but the link between the two has not been closely scrutinized. This article examines how two types of authenticity cues differently influence consumers’ perceptions of brand ethicality. Across five studies and four different product categories, the findings show that indexical authenticity cues lead (...) to greater perceived brand ethicality than iconic authenticity cues. The underlying mechanism is that indexical authenticity cues prompt people to perceive that a product is made with more effort; this increases their perception that it is crafted with love, which then enhances their perception of brand ethicality. The findings also indicate that lower perceived brand ethicality when using iconic authentic cues can be offset by the notion that developing the product involved intense effort. (shrink)

This study examines the relationships of empathy, moral identity and cynicism with the following dimensions of consumer ethics: the passive dimension (passively benefiting at the expense of the seller), the active/legal dimension (benefiting from questionable but legal actions), the ‘no harm, no foul’ dimension (actions that do not harm anyone directly but are considered unethical by some) and the ‘doing-good’/recycling dimension (pro-social actions). A survey of six hundred Australian consumers revealed that both empathy and moral identity were related to negative (...) beliefs regarding the passive and the active/legal dimensions of consumer ethics and were related to positive beliefs regarding the ‘doing-good’/recycling dimension. Cynicism was related to positive beliefs regarding the passive dimension of consumer ethics and was related to negative beliefs regarding the ‘doing-good’/recycling dimension. The role of moral disengagement in mediating these relationships was examined. Empathy and moral identity were only indirectly negatively related to the ‘no harm, no foul’ dimension of consumer ethics through moral disengagement, while cynicism was indirectly positively related to this dimension through moral disengagement. Theoretical and practical implications of these findings are discussed. (shrink)

Widespread unethical corporate misconduct in an industry triggers industry-wide crises. This research investigates how industry misconduct affects consumers’ trust in the industry, by incorporating insights from a micro-level psychological aspect of institutions. The conceptual framework proposes that consumer legitimacy judgement lies at the core of industry trust, following an industry-wide crisis. The results demonstrate that perception of normalisation of misconduct affects industry trust through consumer legitimacy judgement. Moreover, the PNM-CLJ-industry trust relationship is stronger during industry-wide crises compared with crises that (...) involve only one firm, and this relationship is not dependent on the frequency of crises. This research contributes to the knowledge of product-harm crisis by deepening understanding of the trust erosion mechanism during industry-wide crises, with a focus on legitimacy judgement. The findings have implications for prevention of industry-wide crises and for boosting ethically desirable business activities. (shrink)

Little is known on the appraisal of ethically questionable not- for-profit actions such as social marketing advertising campaigns. The present study evaluates the ethical acceptance by adults of anti-obesity threat appeals targeting children, depending on the claimed effectiveness of the campaign. An experiment conducted among 176 Belgian participants by means of an online survey shows that individuals’ acceptance of social marketing practices increases along with the claimed effectiveness of the campaign. As such it demonstrates that the audience adopts a pragmatic (...) perspective, challenging the non-consequentialist stance of social marketers who refrain themselves from using these ‘questionable’ techniques although highly effective. The trade-off between ethical judgment and claimed effectiveness varies depending on whether the threats focus on the child’s physical integrity or social life. Individual characteristics such as parenthood and age also influence the relationship. All in all, it seems that people with stronger connections to the issue such as parents are more ready to compromise. These findings enrich our insights into consequentialism in social marketing campaigns, how people respond to controversial messages targeted at vulnerable group, and open new venues to social managers and public policy makers. Managerial implications and concrete advice on how to communicate with the various audiences are proposed, as well as suggestions for future studies. (shrink)

This research investigates how consumers’ ethical brand perceptions are affected by differentially valenced information. Drawing on literature from person-perception formation and using a sequential, mixed method design comprising qualitative interviews and two experiments with a national representative population sample, our findings show that only when consumers perceive their judgment of a brand’s ethicality to be pertinent, do they process information holistically and in line with the configural model of impression formation. In this case, negative information functions as a diagnostic cue (...) to form an unethical brand perception, irrespective of other positive information at hand. However, in the case where processing relevance of the un/ethical information provided is low, brand perception formation is algebraic, in which case positive information can counterbalance and neutralize the detrimental impact of brand misbehavior. Our findings extend existing research on consumer perceived ethicality as well as consumer reactions to corporate social responsibility and sustainability initiatives, which has so far assumed the asymmetric impact of negative information on ethical perceptions and consumer attitudes to be prevalent. We derive a range of academic and managerial implications and present a number of important avenues for future research. (shrink)

The impact of socially responsible corporate behavior on economic performance is a major preoccupation of managers today. This article explores the links between narrowly defined constructs: stakeholder orientation, environmental proactivity and profitability, from the perspectives of stakeholder theory and resource-based theory. We collected data on the food and beverage, and household and personal products industries. Using structural equation modeling, this paper makes two contributions. We found a negative link between companies simply having a higher stakeholder orientation and profitability. Importantly, however, (...) environmental proactivity not only had a positive impact on profitability, but also appeared to mediate the relationship between stakeholder orientation and profitability. In other words, if a company is more environmentally proactive, it will be more attentive to a broad array of stakeholders, and this will in turn contribute positively to profitability. (shrink)

The growth in demand for corporate social responsibility information raises the question of how various CSR disclosure items are used by investors, an important stakeholder group driven by instrumental, moral, and relational motives. Prior research examines the instrumental motive to maximize individual shareholder wealth and the moral motive to actualize personal stewardship interests. We contribute to the literature by examining investors’ relational motive to realize positive stakeholder relationships within and between organizations and communities. The relational motive arises when investors look (...) at a company’s treatment of other stakeholder groups as a heuristic to form a perception of how fairly they will also be treated by that company in the future, and thus invest in the company they perceive as fair. Fair treatment in the future matters to the investor who purchases stock from the company or via the capital markets in exchange for becoming a shareholder and thus a residual claimant of the company. As such, the investor expects future cash flows from holding and/or reselling the stock and expects to be treated fairly by the company in the future. We propose that investors, use as a fairness heuristic, CSR disclosure items—CSR investment level or CSR assurance—that represent the company’s commitment to its stakeholders, and that the resulting fairness perception affects the extent to which the CSR disclosure items influence their investment decision. Using responses from 113 investors in an online experiment, we find that fairness perceptions are higher when CSR investment is above the industry average, and that fairness perceptions partially mediate the impact of the CSR investment level on investment amount allocations. We do not find that the presence of CSR assurance is used by investors as a fairness heuristic. Our results are robust to controlling for preferences for financial performance and hence investors’ instrumental motive, and to controlling for individual environmental attitudes, and hence investors’ moral motive. Implications for future research and public policy are discussed. (shrink)