Journal of Business Research 63 (2010) 255–262
Contents lists available at ScienceDirect
Journal of Business Research
Exploring origins of ethical company/brand perceptions — A consumer perspective of
corporate ethics
Katja H. Brunk 1
Solvay Brussels School of Economics and Management, Department of Marketing, Université Libre des Bruxelles, Avenue F.D. Roosevelt 21–CP 145/01, 1050 Brussels, Belgium
a r t i c l e
i n f o
Article history:
Received 1 May 2008
Received in revised form 1 February 2009
Accepted 1 March 2009
Keywords:
Corporate ethics
Corporate social responsibility (CSR)
Qualitative research
Ethical consumption
Brand misconduct
Consumer perceived ethicality (CPE)
a b s t r a c t
This research provides a consumer perspective of corporate ethics. The study consists of twenty long interviews
[McCracken, G., 1988. The long interview. Newbury Park, CA: Sage] with general consumers, and conceptualizes
potential sources of consumer perceived ethicality (CPE) of a company/brand by investigating consumers' ethical
perceptions of business behavior. The developed taxonomy delineates six domains and 36 sub-domains of CPE
origin, relating to the impact corporate behavior has on: (1) consumers, (2) employees, (3) the environment, (4)
the overseas community, (5) the local economy and community, and (6) the business community. Findings
demonstrate disparities between the consumer and the business perspective and highlight the fact that sources of
CPE prove considerably more diverse and complex than the literature suggests, therefore presenting a vital
extension to existing research. By providing business managers with a comprehensive assembly of issues which
may evoke un/ethical perceptions, the framework may serve as a code of business conduct to prevent, contain, or
combat negative CPE.
© 2009 Elsevier Inc. All rights reserved.
1. Introduction
Issues of corporate ethics and corporate social responsibility (CSR)
increasingly take centre stage in media reporting. The majority of the
existing research relating to business ethics and CSR focuses on
decision-making processes within companies. Certainly, the business
perspective is of great importance, but, further to recent consumer
behavior research that has established a link between a company's
CSR or ethics and consumer responses (Berens et al., 2005; Biehal and
Sheinin, 2007; De Pelsmacker et al., 2005; Folkes and Kamins, 1999;
Gürhan-Canli and Batra 2004; Lichtenstein et al., 2004; Luo and
Bhattacharya, 2006; Madrigal and Boush, 2008; Mohr and Webb,
2005; Mohr et al., 2001; Sen and Bhattacharya, 2001), researchers
must also investigate the way that corporate decisions are perceived
by the public. Despite a considerable extension of the related research
body over the last 10 years, the consumer side is still in need of indepth exploration (Mohr et al., 2001; Newholm and Shaw, 2007; Sen
and Bhattacharya, 2001).
The business perspective of what does and does not constitute ethical
behavior may not be congruent with consumer perceptions (Galavielle,
2004), and, as Crane (2005) suggests, companies' knowledge about
consumers' ethical beliefs and values is limited. Yet consumers' subjective beliefs and un/ethical perceptions act as sources of attitude
E-mail address: Katja.Brunk@ulb.ac.be.
Katja H. Brunk is the holder of a research fellowship from the Communauté
Française de Belgique.
1
0148-2963/$ – see front matter © 2009 Elsevier Inc. All rights reserved.
doi:10.1016/j.jbusres.2009.03.011
formation and may consequently steer buying behavior, to the detriment
of some companies.
Among the high profile examples are Gap and Nike (sweat-shop
and child labor at manufacturing firms in Asia); Nestlé (aggressive
marketing of baby-milk formula in Africa); Shell Oil (Brent Spar and
the Niger Delta controversy). Subsequent consumer boycotts not only
caused severe damage to sales revenues but also–more detrimentally
in the long run–harmed the companies' reputations, brand images and,
in the case of Nestlé, triggered a spill-over effect to other unrelated
product categories and brands in their portfolio (i.e. Nescafé). Yet little
is known about the types of behavior that lead to un/ethical perceptions. As Cowe and Williams (2000) point out, it is crucial to
understand the kind of corporate behavior that consumers demand.
Next to prototypical transgressions such as environmental pollution,
child labor and sweat-shop working conditions, what are the business
practices and transactions that are judged to be right or wrong and act
as sources of un/favorable consumer perceived ethicality (CPE)? The
following research set out to address this fundamental question.
2. Literature review
2.1. The concepts of ethics and CSR
In a general sense, the term ethics refers to a set of moral norms,
principles or values that guide people's behavior (Sherwin, 1983). Moral
sentiments can be either neutral, or negatively/positively valenced.
The terms unethical or ethical describe an individual's subjective
moral judgment of right/wrong or good/bad. Philosophy offers two
256
K.H. Brunk / Journal of Business Research 63 (2010) 255–262
fundamental types of moral principles that guide evaluations: deontological and teleological (Barnett et al., 2005; Forsyth, 1992; Frankena,
1973; Shanahan and Hyman, 2003). When deontological principles are
applied, the judgment is rules based: An individual evaluates an action
as right or wrong by referring to higher moral duty, norms, or the law.
Teleological evaluation, on the other hand, considers the possible outcomes of following a particular rule or action or of taking an alternative
route, and tries to predict how much good or bad will come in either
event. The teleological perspective entails taking into account perceived
consequences, their probability, desirability and the severity of positive
or negative impact. Scholarly support exists for the notion that an
individual's ethical judgment can be a function of both deontological
norms and teleological considerations (i.e. Shanahan and Hyman, 2003;
Vitell et al., 2001).
A company's stance on CSR may strongly influence how ethically
the company and its brands are perceived. Since Howard Bowen's
(1953) first contribution to the subject, uncountable definitions and
conceptualizations of CSR have been offered, reflecting the breadth of
the CSR domain and various viewpoints of the respective authors
(Carroll, 1979; Mohr et al., 2001; Sen and Bhattacharya, 2001; Ullman,
1985; Zahra and LaTour, 1987). A lack of universal consensus on what
the concept of social responsibility entails becomes apparent when
reviewing the literature; this is attributable to the concept's broad
nature and the conflicting ideological viewpoints of its scholars. To
illustrate the complexity, Appendix A shows a range of different–nonexhaustive–conceptualizations of CSR, showcasing variations in focus,
level of abstraction and ideology.
Some frameworks embed ethics as a separate CSR sub-domain
alongside the legal, economic, and philanthropic responsibilities of
a company (i.e. Carroll, 1991, 1979). While many conceptualizations
do not explicitly refer to ethical principles, some scholars argue that
ethical considerations should guide any responsible corporate decision, hence be at the very heart of CSR. For example, Eels and Walton
(1961) offer an early perspective of viewing ethics as a foundation of
CSR: “When people talk about corporate social responsibilities they are
thinking in terms of the problems that arise when corporate enterprise
casts its shadow on the social scene, and of the ethical principles that
ought to govern relationships between the corporation and society.”
Petkus and Woodruff's (1992) definition of CSR closely resembles the
basic principles of ethics: “… a company's commitment to minimizing
or eliminating any harmful effects and maximizing its long-run beneficial impact on society.” This conceptualization promotes consideration of the consequences of a company's actions on society, thereby
establishing ethics as a guiding principle of CSR, and acknowledging
that both concepts are irrefutably linked in their nature and objectives.
The dimensions and types of activities the concept of CSR can
comprise are as varied as its definitions. Appendix B provides three
frameworks, differing in breadth and level of abstraction: The Socrates
Social Ratings Monitor by Kinder, Lydenberg, Domini and Co. (cited
from Sen and Bhattacharya, 2001); the CSR framework provided by
the EU in its Green Paper in 2001 (Commission of the European
Communities, 2001); and the CSR dimensions identified by Perrini,
Pogutz, and Tencati (2006) following interviews with top managers.
2.2. The consumer perspective of corporate ethics
The consumer perspective of corporate social responsibility (CSR)
and business ethics requires further in-depth exploration (Mohr et al.,
2001; Newholm and Shaw, 2007; Sen and Bhattacharya, 2001), yet
the majority of the existing literature relating to CSR and business
ethics focuses on decision-making processes in companies, with one
research stream investigating the ethical judgments of marketing
professionals in particular (for an in-depth meta-analysis of marketing ethics see Nill and Schibrowsky, 2007). While an understanding
of how business professionals react when confronted with ethical
dilemmas is important, an investigation of how corporate decisions
are received by the consumer–a major stakeholder group–should be
equally interesting. Crane (2005) suggests that companies lack a clear
understanding of their consumers' ethical beliefs. The consumer's
perspective of what constitutes un/ethical behavior may differ from
a company's definition, and moreover, may not always be in line with
widely held definitions of ethics (Clavin and Lewis, 2005; Clouder and
Harrison, 2005; Galavielle, 2004).
Despite a progressively expanding research body dealing with links
between a company's CSR or ethical image, and consumer responses
(Berens et al., 2005; Biehal and Sheinin, 2007; Brown and Dacin, 1997;
Carrigan and Attalla, 2001; Creyer and Ross, 1997, 1996; De Pelsmacker
et al., 2005; Folkes and Kamins, 1999; Gürhan-Canli and Batra, 2004;
Lichtenstein et al., 2004; Luo and Bhattacharya, 2006; Madrigal and
Boush, 2008; Mohr and Webb, 2005; Mohr et al., 2001; Sen and
Bhattacharya, 2001), and the most recent research on the impact of
brand misconduct on consumer brand-relationships (Huber et al.,
2008), little is known about what types of behavior can actually evoke
un/ethical brand/company perceptions. Creyer and Ross (1997) acknowledge the opportunity to identify the dimensions along which
consumers evaluate the ethicality of corporate behavior — in other
words, which business practices are judged to be right or wrong. Hence
by generating a comprehensive spectrum of issues that matter to
consumers, the objective of this research is to identify and conceptualize potential sources of a company or brand's CPE.
Rust et al. (2000) offer five dimensions of customer perception of
a brand's ethics: Community events, private policy, environmental
record, hiring practices, and guarantees. Given the increasing awareness of ethical issues over the last decade, the dimensions appear
limited in breadth and comprehensiveness today. For example, Nestlé's
unethical brand perceptions were caused by marketing practices the
public deemed immoral. As the number one boycotted brand in the
UK, the company has been challenged over its aggressive marketing
and selling of infant formula products in Africa, which inhibit breastfeeding and can be life-threatening to infants when used with nonpurified water. Yet this type of marketing-related behavior falls outside
the realm of Rust et al.'s (ibid.) framework. Hence the development of
a contemporary, more comprehensive and holistic framework encompassing the multiplicity of corporate behaviors that may act as potential sources of CPE is highly warranted.
3. Method
Qualitative methods of research were a natural choice given the
unexplored nature of the subject and the aim of generating a comprehensive catalog of corporate behavior with ethical content. As part
of a larger study, face-to-face consumer interviews were conducted
and serve as the main source of data collection.
3.1. Sample
Typically, qualitative research focuses on an in-depth exploration
of a small and diverse sample. As McCracken states (1988, p.17): “For
many research projects, eight respondents will be perfectly sufficient.”
For this research, 20 long interviews (ibid.) were conducted with
general consumers aged between 17 and 83 years. Contrary to existing,
US-dominated research on CSR and business ethics, the focus is on
European consumers in Germany and the UK. Contrasting respondent
profiles are a prerequisite for capturing the variety of prevailing attitudes, evaluations and perceptions, so in order to create a diverse
pool of participants a theoretical sampling approach was employed,
guided by a characteristic on-going comparison process (Strauss and
Corbin, 1990). Interviewees were recruited via convenience and multiplicity (snowball) sampling (Berg, 2006; Bryman, 2004). Appendix C
demonstrates the sample's diversity in terms of age, gender, marital
status, education and employment status/profile.
K.H. Brunk / Journal of Business Research 63 (2010) 255–262
3.2. Data collection
The consideration of consumers' evaluation of ethics or morality is an
inherently personal, subjective, and sensitive topic and therefore prone
to social desirability effects (Crane, 1999; Mohr et al., 2001; Vantomme
et al., 2006; Vermeir and Verbeke, 2006), so one-to-one interviews were
considered the most appropriate method. Interviews were conducted at
the respondents' home, either in English or German. A semi-structured
interview format provided a focused, yet open form of dialog and encouraged discussion. The more informal interview style combined with
the familiar and comfortable surroundings of their home created a
relaxed atmosphere and consequently participants were very willing to
engage and answer openly. This was crucial given the sensitivity of the
subject and the objective of minimizing social desirability bias.
The interview guide was developed following four expert interviews and a review of analytical and cultural categories to facilitate a
process of familiarization and defamiliarization (McCracken, 1988).
Subject to minor refinements after pilot testing, the guide continually
evolved in line with emerging concepts and patterns (Strauss and
Corbin, 1990). The question format was open and all respondents
covered the same topics, starting with more general grand-tour
questions referring to responsibilities of businesses today, and then
becoming increasingly specific, concluding with examples of various
types of perceived un/ethical behavior and a discussion of company/
brand-specific cases. The data-collection phase concluded after 20
interviews, when the last three interviews failed to reveal any new
information, suggesting theoretical saturation. Depending on the level
of active participation and interaction, interviews lasted between 45
and 120 min.
3.3. Data analysis
With the permission of participants, all but one interview–an
83-year-old female feeling intimidated by the presence of the tape
recorder–were recorded and transcribed at full length, yielding a
total of 308 pages of verbatim transcripts and 47 pages of field notes
for analysis.
Data analysis was on-going and gradually evolved throughout
the data-collection process (Strauss and Corbin, 1990). The constant
comparison and subsequent refinement allowed both processes to
intermingle, a strategy particularly useful for exploratory research
purposes (McCracken, 1988).
To extract meaning, transcripts were re-read repeatedly and
analyzed in search of recurring patterns, themes and relationships
between them. In line with Spiggle (1994), analysis proceeded by
employing the recommended procedures of categorization (coding
deductively and inductively), abstraction, comparison, dimensionalization, integration, iteration, and refutation. Following these analytical operations and the subsequent integration of the data, a
dialog and review process was initiated in order to strengthen the
validity of the findings (Kvale, 1996). This confirmation phase included sharing results with six of the interviewees and two experts.
Reviewers were requested to provide feedback on the interpretations and to debate any issues in question.
No significant differences between emerging categories were detected when the data from the UK and Germany was compared. As the
types of corporate actions that participants perceive as un/ethical are
close to identical in both countries, the findings presented hereafter
reflect the views of the combined sample.
4. Findings
4.1. Conceptualizing domains of CPE origin
The research set out to identify and conceptualize potential sources
of CPE origin, namely the kind of corporate activities that evoke
257
favorable or unfavorable ethical perceptions. Interviews resulted in
elicitation of a wide variety of behaviors, confirming that reasons
for un/ethical brand perceptions can be manifold. The large pool of
generated examples had to be conceptualized into distinctive domains
of CPE origin in line with consumer representations.
Before developing a new taxonomy, related frameworks (Appendix B;
Rust et al., 2000) were assessed for potential suitability but either lacked
the breadth and multiplicity of behaviors generated, or inadequately
reflected domains that were relevant to the consumer. None appeared
congruent with consumer representations, highlighting the need for a
new–consumer based–categorization.
The final categorization rests on the scholarly definition of teleological ethics, specifically the consequentialist perspective (Barnett
et al., 2005; Frankena, 1973) and data was clustered in line with
consumers' concern for the consequences of corporate actions. The
emerging domains of CPE origin therefore mirror the question of
whom or what will ultimately be affected by the perceived transgression or virtuous act cited by respondents. Fig. 1 depicts the resulting
six domains of CPE origin which can influence ethical perceptions of
a company or brand: (1) consumer, (2) employees, (3) environment,
(4) local community and economy, (5) business community and (6)
overseas community, together with 36 sub-categories presenting the
most prominent examples generated. Reflecting the proliferation of
ethical issues in the media over the past years, the new framework of
CPE origin underscores the fact that today consumer perceptions of
a brand's ethics are considerably more diverse and complex than
previously assumed. Therefore the developed taxonomy provides a
natural extension to existing research and a valuable prerequisite for
any future investigations in the area of ethical consumption.
The taxonomy may appear to share some similarity with stakeholder theory (Freeman, 1984), but diverges in various ways: A stakeholder is commonly understood as a party that is either affected by
or affects a company's business conduct. Hence wider constituencies
such as NGOs, unions and governmental regulation agencies, also
count as stakeholders. While they represent the interests of those
directly impacted by corporate decisions, they are not immediately
affected by a company's actions, illustrating that the stakeholder view
developed from a corporate management perspective encompasses
many more interest groups besides employees, consumers and the
local community. Moreover, not all traditional stakeholders matter
to consumers. For example, consumers display indifference towards
shareholders — a key constituent under the stakeholder view. Additionally, while the stakeholder view considers the impact on and
interaction with interest groups–people and organizations–the consumer categorization emerging from the data had to encompass not
only the direct impact on humans, but also indirect effects, such as
the impact on the environment and the local economy.
4.1.1. Consumers
The way a company conducts its business can largely and directly
impact on the end consumer who is the target of a company's products or services. The findings from this study demonstrate that
marketing-related activities are particularly prone to questionable
ethics. Passionate discussions revolved around marketing issues generating a large number of examples of negative CPE.
Immoral advertising practices are a core concern. Consumers
mention that companies target and take advantage of the weak and
vulnerable (i.e., children, the elderly, undereducated or disabled
people) and that ads can be misleading, even false, about product
benefits as the following interviewees illustrate. Mark: “What I am not
happy with is the way some of these companies target the weak to
try and sell their products. For instance McDonald's. I find this unacceptable.” Emily: “The way companies advertise their products is
not always true, they can be misleading and they can encourage
groups of, you know, groups of people to purchase products that can't
258
K.H. Brunk / Journal of Business Research 63 (2010) 255–262
Fig. 1. Consumer perceived ethicality (CPE) — domains of origin.
possibly be so good for them.” Fiona: “They say a product is gonna do
something, but they're lying. That's not ethical. A lot of them will
probably do that in advertising, complete out and right lie.”
Consumers raise concerns about the sale of products of substandard quality as well as poor customer service. The concealment
of important product details, such as hiding technical weaknesses,
side effects, or ingredients by means of insufficient labeling, causes
unethical perceptions. Susan shares a personal example about the
company she used to work for, which she considers unethical. She
describes how the outsourcing of production abroad resulted in a
significant decrease in the quality of the manufactured products, and
the lower quality goods were willfully and knowingly passed on to the
consumer: “You know, that's very unethical. It's wrong towards the
consumers, they (the company) have this produced somewhere else
and pay very little for it. Then they sell it on to the consumers very
expensively and don't even check the quality of the products!”
Price fixing among competitors can instigate negative CPE, as Ina
expresses: “What I find unethical is for instance above average prices
and tariffs, don't know, but for instance the electricity companies or oil
and gas that, without having a well-found reason, purely out of greed
for more profit, increase prices and keep them artificially high, and
that way they take advantage of consumers, exploit them and enrich
themselves on our account.”
Consumers feel they have the right to free choice when purchasing
a product or a service. Therefore, sales strategies resulting in customer
lock-in can result in unethical perceptions. For example, consumers
disapprove of the fact that certain technical devices may only run with
software from the same manufacturer and require regular updates at
additional cost to guarantee full functionality.
The above findings relating to the consumer domain are intriguing
for two reasons. Firstly, results highlight a disparity between the
consumer and the business perspective. While consumers display
strong feelings against these types of transgressions, the high level of
importance is not shared by business professionals. In a study by
Perrini et al. (2006), business managers rate marketing activities as
one of the least important dimensions of CSR, despite the fact that the
sampling frame was highly sensitive to social responsibility issues.
Consumers however, have a converse opinion and this study demonstrates that underestimating the importance of marketing a product
in a responsible way can result in a detrimental effect on a company or
brand's perceived ethicality. Secondly, whereas Rust et al.'s (2000)
‘guarantee’ dimension pertains to the consumer domain, the identified sub-domains in this study's newly developed CPE origin framework extend far beyond to include issues of pricing, labeling,
targeting, advertising practices and freedom of choice.
4.1.2. Employees
The ways in which employees are treated evoke strong feelings
among consumers. This finding is consistent with Cowe and Williams
(2000) and the 2001 IPSOS–Novethic poll (Galavielle, 2004) which
reports that treatment of employees comes top of the list of consumers' ethical choices, but contrary to findings by Carrigan and
Attalla (2001) who demonstrate that participants allocate a low priority to issues like working conditions and human exploitation. In
the latter case, respondents' demographics (ranging between 18 and
25 years of age) could be the cause of these seemingly conflicting
results. Participants may simply lack sensitivity towards issues of
employee treatment because they are relatively young and have little
or no experience of work.
Besides mentioning, on a more general level, their disapproval of
the ill-treatment of staff, respondents expect employers to care, and
are specific about what they consider unacceptable working conditions, such as unsatisfactory safety procedures and unusually long
working hours. By the same token, inappropriate compensation and
the drive for cheap labor generate unethical connotations, while
paying above average wages and offering additional social benefits,
such as pension insurance or providing child care through companyowned kindergartens, can positively affect CPE.
K.H. Brunk / Journal of Business Research 63 (2010) 255–262
“… employing people, they do have to care for young children, they
do have to care for other people, other adults, they are employing
people of all different races hopefully, and ages and abilities and,
you know, their ethics within the company to make sure that nobody
is discriminated against whatsoever, that everybody gets a fair crack
at promotions, wage increases, perks, whatever the perks in the
company might be really, they are ethics.” Further to this quote by
Emily, respondents display an aversion to any kind of discrimination.
Examples include job and wage discrimination based on age, ethnic
origin, religion, and sexual orientation, while female respondents also
refer to gender discrimination. The creation of a work environment
that fosters diversity, integration as well as employing people with
disabilities evokes positive ethical perceptions.
4.1.3. Environment
Universal agreement prevails over the high priority of environmental issues. This finding is contrary to conclusions drawn from the
IPSOS–Novethic poll which states that environmental concerns are
only of secondary nature, far behind issues relating to the treatment of
employees (cited from Galavielle, 2004). James illustrates the significance of environmental issues: “If I read a story in the paper about
a company that was polluting the river, you know, a petroleum company and the refining was leaking, I would absolutely boycott them.
Absolutely.” Not only do consumers find a firm causes pollution and
damages the environment to be unethical, they also expect a preventative and pro-active approach, particularly from companies that
by the very nature of their business are greater polluters than others
(i.e., car companies and airlines). Therefore, under such circumstances, failing to comply with consumer expectations of a pro-active
rather than re-active approach may also result in an unfavorable CPE.
Comments not only center on the prevention of pollution and
environmental damage as a direct result of a company's core operation
and production processes. Consumers also acknowledge that unnecessarily frequent airline travel can lead to environmental damage and
disagree with the travel policies of many companies, calling for
increased use of advanced telecommunication technology (e.g. videoconferencing). Peter explains “… you've got to reduce your carbon
emissions for instance, and you know all these companies that are
churning out, you know, tons of carbon emissions through their, for
instance through their travel, the travel of their people, cause I work
for the travel industry really, so you know the flight to get someone
from New York here to London and backwards and forwards, and
these companies are flying people backwards and forwards
constantly.”
Issues relating to animal protection are polarizing. While most
interviewees recognize the necessity of animal testing under certain
circumstances (i.e. medical trials), others categorically reject such
practices.
4.1.4. Overseas community
Despite the fact that overseas operations take place out of the
consumers' sight, the perception of how irresponsibly a company
conducts its foreign business can initiate strong unethical connotations. Such negative perception is not always due to the company's
own misconduct but can have roots in the transgressions of a business
partner several steps back in the supply chain. According to consumers, companies have an obligation to be knowledgeable about
anyone they engage with and are therefore accountable for the actions
of firms linked to their supply chain.
High on respondents' hierarchy of transgressions is the exploitation of labor in overseas countries. Engaging in, or tolerating child
labor is a prototype of unethical behavior. Additionally, many comments center on working conditions in overseas production facilities,
particularly sweat-shop-like conditions and other dangerous work
259
environments such as the scenario Susan describes: “Dangerous
working conditions are very unethical. When they don't care that
perhaps in 2 years or whenever, people die of cancer or something
like that. Sometimes you see people in Africa or Asia, when they are
standing in the vats of fabric dye, such highly poisonous stuff, that's
very shocking, how can they expect people to do that? Dreadful.”
But concern reaches beyond issues relating to the foreign workforce. Consumers also condemn the exploitation of natural resources
abroad, particularly when companies take advantage of underdeveloped nations without appropriate financial compensation, as
Rachel explains: “… Shell in the Niger Delta, just taking the oil without
any form of remuneration to the people who are living there and they
also, they build up real camps which are patrolled by people with
guns, and people who live there are killed if they get in the way, that's
certainly unethical.”
Investing in and trading with countries under questionable political regimes emerges as a source of negative CPE. Interviewees do not
approve of companies doing business with countries under dictatorships or those that are known for their violation of human rights.
Furthermore, human trafficking and illegal trade, such as arms dealing, were cited as unacceptable business practices.
At first sight this domain of CPE origin does not appear mutually
exclusive from other domains. For example, attributing exploitation of
natural resources abroad to the Environment domain, while assigning
child labor to the Employee domain, would make sense conceptually.
However, interestingly, such categorization is not in line with consumer representations. Consumers appear to categorize operations
outside the company's perceived home base (which may be defined as
broadly as the entire developed world) separately and mentally distinguish between what happens locally and overseas. As Simon explains, “It's strange but, for me what they (companies) do over here is
a different story versus what they do abroad. How shall I put it?
[pauses] You know, it's not that I don't consider, that I don't think
workers in Asia are not employees, but anything they do over there,
even polluting a river or so, you know, for me it's how they behave
outside their home ground kind of.”
4.1.5. Local community and economy
Community involvement is at the core of many CSR programs and
therefore considered prototypical for socially responsible behavior
and ethicality by consumers. Several virtuous examples emerge, as
Peter illustrates: “… investing in sort of charities or investing back into
the community really is what I think is important and certainly
companies really demonstrate that.” For respondents, an ethical firm
channels a share of its profit into social responsibility projects:
creating foundations, contributing to charity organizations, and supporting local institutions such as libraries or schools.
But the impact of a company's behavior on the local community
reaches far beyond community events. According to a sizeable segment of respondents, a company ought to feel obligated towards its
home country and local economy. Outsourcing or moving the production line to low-wage countries, particularly during times of healthy
company profit, represents irresponsible behavior. Interviewees
disapprove of a predominantly financially-driven corporate decision
to move abroad, which is seen to create unemployment at home and
to diminish the local community's income from corporate taxes,
which in turn finances welfare and social systems. Hence, a company
should not make a decision to close down production facilities at
home or relocate abroad without careful consideration of the impact
on the local community. Ina expresses her feelings the following way:
“For instance companies that move abroad for cost advantages, they
don't realize how they damage the country in which they were based,
because people become unemployed and so forth.” While Susan goes
one step further and demands the government's involvement in
preventing large-scale outsourcing: “If they outsource everything and
260
K.H. Brunk / Journal of Business Research 63 (2010) 255–262
leave nothing here, I personally would charge them high customs
duties and tax them so much that it's not worth for them doing this
kind of thing… I believe a certain percentage should stay here in
Germany so that people here have work too. I have nothing against
outsourcing, but not everything! I find that greedy. Yes, that really
does upset me, always has upset me.”
Consumers disapprove of any company relations with dubious
organizations they consider harmful to the community, hence any
business-related contact generates unethical connotations. Examples include Siemens' perceived involvement with the Nazis during
the Second World War, and conducting business with anyone related to Scientology, a particularly strong source of negative CPE in
Germany.
4.1.6. The business community
Overall, fewer spontaneous mentions of unethical behavior refer to
the impact a company has on the business community such as its
suppliers, trade partners, or competitors.
“There is proprietary pricing for one thing where kind of companies, big companies try and basically adjust their pricing below
market price to try and screw over small companies so they get
pushed out of business and then the big companies putting their
prices together and take over the market … that's unethical in my
opinion.” John's remark demonstrates that respondents dislike hostile
corporate behavior. The fact that corporations utilize their purchasing
power and financial strength to their advantage, thereby deliberately
putting smaller businesses and competitors out of business, initiates
unethical connotations. This negative perception also applies to the
poor treatment of suppliers, such as pressing for a deeply discounted
price when sourcing products and materials.
Consumers perceive corruption–for example giving, receiving or
tolerating bribery–as misconduct. Following highly publicized scandals such as that of Enron, consumers oppose incorrect accounting
practices, which is supported by James responding to the question of
how in his opinion a company would have to behave in order to be
considered ethical: “Well clearly, fair accounting practices. So you
know, they have to abide by the laws, the financial laws of the state or
the country… Sometimes you don't hear about the culprits, I mean
you did after Worldcom, you did after, you know, Enron, but that was
only after the loss of billions and billions of dollars. Disgusting.”
5. Conclusions and implications
By conceptualizing potential origins of un/favorable CPE, this research contributes a much needed consumer perspective of corporate
ethics to the existing literature. Emerging from consumer interviews,
the taxonomy delineates six domains and multiple sub-domains
relating to the impact corporate behavior has on: (1) consumers (2)
employees (3) the environment (4) the overseas community (5) the
local economy and community and, (6) the business community.
While some of the domains may appear obvious, an adequate consumer framework encompassing all potential sources of negative or
positive CPE has been missing from the literature so far, hence the
comprehensiveness of the new taxonomy alone constitutes a major
contribution.
The study demonstrates disparities between the consumer and
business perspective and highlights the fact that sources of CPE prove
considerably more diverse than the literature suggests. The observed
complexity is natural, given the media-driven proliferation of ethical
issues over the past few years. Consequently, the developed taxonomy
of CPE origin with its 6 domains and 36 sub-domains presents a
contemporary perspective and a vital extension to the existing literature, which fails to encompass the broad spectrum of behaviors that
may initiate un/ethical perceptions.
Further to Crane (2005), who suggests that companies do not have a
clear understanding of their consumers' ethical beliefs, and in line with
Creyer and Ross' (1997) call for the identification of dimensions along
which consumers evaluate corporate ethics, the presented framework
provides comprehensive guidance to general managers, brand managers and CSR professionals on the types of activities that may arouse
un/ethical perceptions of their company/brand among consumers — a
major stakeholder group. Creating awareness of how consumers think
and realizing what may or may not evoke negative CPE are crucial. Often,
unethical perceptions are at the root of a faltering company/brand image
and reputation, with a potentially detrimental effect on consumer
attitudes and purchase behavior following in its wake. The domains of
CPE origin enable managers to consider key sources of ethical perception
relevant to their specific business context and consequently help to
address consumers' core concerns via various forms of corporate communications. Larger perceptual incongruence between the company
and the consumer may call for more fundamental and strategic steps,
such as a re-prioritization of CSR activities. Moreover, the introduction of
a code of ethics, or, if one is already in place, a review of existing ethical
policies in order to prevent, contain, or combat negative CPE, may be
appropriate measures.
6. Limitations and suggestions for further research
The unexplored nature of the research subject and the objective
of generating a comprehensive spectrum of un/ethical corporate
behavior rendered a qualitative empirical study the most suitable
method. The presented findings must be viewed with the usual drawbacks of the employed qualitative research methodology in mind.
For instance, the objective is to conceptualize and not to generalize
(McCracken, 1988), hence, results are on an abstract level and not
representative of the general population. Further studies should
therefore take a confirmatory approach of the developed taxonomy.
Investigating European versus Asian or US consumer perceptions
would also be an interesting avenue for future research.
The presented framework offers an ideal starting opportunity for
developing a formative measurement tool of CPE, whereby each of the
six domains may be viewed as a facet of the formative construct.
Measuring CPE and its facets would allow companies to identify areas
of perceived underperformance, hence help to direct improvement
efforts efficiently.
Research into the actual CPE formation process is another area in
need of investigation. After addressing the key question of what
influences CPE by identifying its sources–those corporate activities
that can potentially result in positive or negative ethical attribution–
an obvious extension is to turn to the issue of how corporate behavior
influences CPE. For instance, how does consumers' global ethical perception of a brand or company emerge?
Appendix A. CSR conceptualizations
CSR conceptualized by types of corporate responsibilities
Description
Responsibilities
delineated
Author/source
The social responsibility of a company
should be purely economic striving
for maximum profit for its
shareholders while acting within
the law.
Social responsibility should be purely
voluntary only considering acts
above and beyond economic and
legal criteria.
Integrated approach of defining CSR as
including four types of corporate
responsibilities: economic, legal,
ethical and philanthropic.
Purely
economic
M. Friedman, 1962
Purely
voluntary
Manne and Wallich,
1972
Economic
Legal
Philanthropic
Ethical
Carroll, 1991 and 1979
K.H. Brunk / Journal of Business Research 63 (2010) 255–262
Appendix A (continued)
Appendix C (continued)
CSR conceptualized by its core objectives
Description
Objectives
delineated
Author/source
CSR as generating profit for
the shareholders while protecting
the environment and improving
the quality of life of those the
company is interacting with.
CSR as open and transparent
business practices based on ethical
values and respect for employees,
communities, and the environment
and designed to deliver sustainable
value to society at large, as well as
to shareholders.
CSP as a company's commitment
to minimising or eliminating any
harmful effects and maximising its
long-run beneficial impact on society.
Generate profit
while protecting
environment and
improve quality
of life
Sustainable value
through business
practices based on
ethical values
Savitz and Weber 2006
Minimising harm
while maximising
beneficial impact
Petkus and Woodruff
(1992)
Prince of Wales
International Business
Leaders Forum in: Perrini
et al. (2006)
CSR dimensions
Socrates: The Social
Ratings Monitor
By Kinder. Lydenberg,
Domini & Co. Inc. cited
from: Sen and
Bhattacharya (2001)
Community support
Environment
Diversity
Non-US operations
Employee support
Product
EU Green Paper
By the Commission of the
European Communities
(2001)
Human resources
management
Occupational health
and safety management
Business restructuring
Management of
environmental
impact and natural resources
Local communities
Business partners
Suppliers
Customers and consumers
Protection of human rights
along the whole supply
chain
Global environmental
concerns
Local community initiatives
Human rights
Equal opportunity
Employee safety
Philanthropy and
donations⁎
Marketing⁎
⁎Identified as least relevant
dimensions
Appendix C. Demographic description and summary of interview
participants
The table lists the interviews in the order in which they were
conducted.
All names have been changed in order to guarantee confidentiality.
1
2
3
Paul
Simon
Anna
4
5
Bruce
Michael
6
7
Andrew
Fiona
Jane
Mark
Sandra
Maria
James
Age 83, married, lower education, retired, British (German born)
Age 34, single, higher education, works in a support function, British
Age 29, single, lower education, free-lance worker, German
Age 56, married, higher education, works in a support function, German
Age 40, married, higher education, works in a management position,
American born, European resident for more than 15 years (UK and
Germany)
13 Elisabeth Age 23, single, higher education, works in a support function, German
14 Ina
Age 35, married, higher education, work in a support function, German
15 Frank
Age 36, single, lower education, works in a support function, German
16 Emily
Age 65, single, lower education, retired, British
17 Peter
Age 41, single, higher education, works in a management function,
British
18 Susan
Age 66, married, lower education, retired, worked in manufacturing,
German
19 John
Age 17, single, lower education, student, British
20 Rachel
Age 31, single, higher education, self-employed, British
References
Source
Respect of ethical
principles
Codes of conduct
Quality of life
Transparency
Environmental
protection
Clients and supplier
selection
Company reputation
8
9
10
11
12
⁎ Higher education = polytechnic or university bachelor degree and above.
Appendix B. CSR dimensions
Perrini et al. (2006)
261
Age 40, single, higher education⁎, works in a support function, British
Age 51, single, lower education, unemployed, British
Age 31, married, lower education, works in a management position,
German
Age 42, married, lower education, free-lance worker, British
Age 57, married, higher education, works in a management position,
German
Age 36, single, higher education, shop owner, British
Age 17, single, lower education, student, British
Barnett C, Cafaro P, Newholm T. Philosophy and ethical consumption. In: Harrison R,
Newholm T, Shaw D, editors. The ethical consumer. London, UK: Sage; 2005. p. 11–24.
Berens G, Van Riel C, Van Bruggen G. Corporate associations and consumer product
responses: the moderating role of corporate brand dominance. J Mark 2005;69
(3):35–48.
Berg LB. Qualitative research methods for the social sciences. 6th edition. Toronto,
Canada: Ally and Bacon; 2006.
Biehal GJ, Sheinin DA. The influence of corporate messages on the product portfolio.
J Mark 2007;71(2):12–25.
Bowen HR. Social responsibility of the businessman. New York, NY: Harper and Brothers;
1953.
Brown TJ, Dacin PA. The company and the product: corporate associations and consumer
product responses. J Mark 1997;61(1):68–84.
Bryman A. Social research methods. 2nd edition. Oxford, UK: Oxford University Press;
2004.
Carrigan M, Attalla A. The myth of the ethical consumer — do ethics matter in purchase
behavior? J Consum Mark 2001;18(7):560–77.
Carroll AB. A three-dimensional model of corporate performance. Acad Manage Rev
1979;4(4):497–505.
Carroll AB. The pyramid of corporate social responsibility: toward the moral management of organizational stakeholders. Bus Horiz 1991;34(4):39–48.
Clavin B, Lewis A. Focus groups on consumers' ethical beliefs. In: Harrison R, Newholm
T, Shaw D, editors. The ethical consumer. London: Sage; 2005. p. 173–87.
Clouder S, Harrison R. The effectiveness of ethical consumer behaviour. In: Harrison R,
Newholm T, Shaw D, editors. The ethical consumer. London: Sage; 2005. p. 89-104.
Commission of the European Communities. Green paper promoting a European
framework for corporate social responsibility. Brussels; 2001.
Cowe R, Williams S. Who are the ethical consumers? UK: The Cooperative Bank; 2000.
Crane A. Meeting the ethical gaze: challenges for orienting to the ethical market. In:
Harrison R, Newholm T, Shaw D, editors. The ethical consumer. London: Sage; 2005.
p. 219–32.
Crane A. Are you ethical? Please tick yes? Or no? On researching ethics in business
organizations. J Bus Ethics 1999;20:237–48.
Creyer EH, Ross Jr WT. The impact of corporate behavior on perceived product value.
Mark Lett 1996;7(2):173–85.
Creyer EH, Ross Jr WT. The influence of firm behavior on purchase intention: do
consumers really care about business ethics? J Consum Mark 1997;14(6):421–32.
De Pelsmacker P, Driesen L, Rayp G. Do consumers care about ethics? Willingness to pay
for fair-traded coffee. J Consum Aff 2005;39:363–87.
Eels R, Walton C. Conceptual foundations of business. Homewood: Richard D. Irwin;
1961.
Folkes VS, Kamins MA. Effects of information about firms' ethical and unethical actions
on consumer attitudes. J Consum Psychol 1999;8(3):243–59.
Forsyth D. Judging morality of business practices: the influence of personal moral
philosophies. J Bus Ethics 1992;11(5/6):461–70.
Frankena WK. Ethics. 2nd edition. Englewood Cliffs, NJ: Prentice-Hall; 1973.
Freeman RE. Strategic management: a stakeholder approach. Boston, MA: Pitman; 1984.
Friedman M. Capitalism and Freedom. Chicago, IL: University of Chicago Press; 1962.
Galavielle JP. Business ethics is a matter of good conduct and of good conscience. J Bus
Ethics 2004;53:9-16.
Gürhan-Canli Z, Batra R. When corporate image affects product evaluations: the moderating
role of perceived risk. J Mark Res 2004;41:197–205.
Huber F, Vollhardt K, Matthes I, Vogel J. Brand behavior patterns: an empirical investigation
of brand misconduct. Proceedings of The Thought Leaders Conference on Brand
Management. Birmingham, UK: The Centre for Research in Brand Marketing; 2008.
Kvale S. Interviews: an introduction to qualitative research interviewing. Thousand Oaks,
CA: Sage; 1996.
Lichtenstein DR, Drumwright ME, Braig BM. The effect of corporate social responsibility on
customer donations to corporate-supported nonprofits. J Mark 2004;68(3):16–32.
262
K.H. Brunk / Journal of Business Research 63 (2010) 255–262
Luo X, Bhattacharya CB. Corporate social responsibility, customer satisfaction, and
market value. J Mark 2006;70(3):1-18.
Madrigal R, Boush DM. Social responsibility as a unique dimension of brand personality
and consumers' willingness to reward. Psychol Mark 2008;25(6):538–64.
Manne HG, Wallich HC. The Modern Corporation and Social Responsibility. Washington,
DC: American Enterprise Institute for Public Policy Research; 1972.
McCracken G. The long interview. Newbury Park, CA: Sage; 1988.
Mohr LA, Webb DJ. The effects of corporate social responsibility and price on consumer
responses. J Consum Aff 2005;39:121–47.
Mohr LA, Webb DJ, Harris KE. Do consumers expect companies to be socially responsible?
The impact of corporate social responsibility on buying behavior. J Consum Aff 2001;35
(1):45–72.
Newholm T, Shaw D. Editorial: studying the ethical consumer: a review of research.
J Consum Behav 2007;6(5):253–70.
Nill A, Schibrowsky JA. Research on marketing ethics: a systematic review of the literature.
J Macromark 2007;27:256–73.
Perrini F, Pogutz S, Tencati A. Corporate social responsibility in Italy: state of the art.
J Bus Strategies 2006;23(1):65–91.
Petkus Jr E, Woodruff RB. A model of the socially responsible decision-making process
in marketing: linking decision makers and stakeholders. In: Proceedings of the
AMA Winter Educators Conference. Chicago: American Marketing Association;
1992. p. 154–61.
Rust TR, Zeithaml VA, Lemon KN. Driving customer equity. New York, NY: The Free
Press; 2000.
Savitz AW, Weber K. The Triple Bottom Line: How Today’s Best-run Companies Are
Achieving Economic, Social and Environmental Success – And How You Can Too.
San Francisco, CA: John Wiley & Sons; 2006.
Sen S, Bhattacharya CB. Does doing good always lead to doing better? Consumer reactions
to corporate social responsibility. J Mark Res 2001;38(2):225–43.
Shanahan KJ, Hyman MR. The development of a virtue ethics scale. J Bus Ethics 2003;42
(2):197–208.
Sherwin DS. The ethical roots of the business system. Harvard Bus Rev 1983:183–92
Nov–Dec.
Spiggle S. Analysis and interpretation of qualitative data in consumer research. J Consum
Res 1994;21(3):491–503.
Strauss A, Corbin J. Basics of qualitative research: grounded theory procedures and
techniques. Newbury Park, CA: Sage; 1990.
Ullman AA. Data in search of a theory: a critical examination of the relationships among
social performance, social disclosure, and economic performance of U.S. firms. Acad
Manage Rev 1985;10(3):540–57.
Vantomme D, Geuens M, De Houwer J, De Pelsmacker P. Explicit and implicit determinants
of ethical consumerism. Adv Consum Res 2006;33:699–703.
Vermeir I, Verbeke W. Sustainable food consumption: exploring the consumer attitude–
behaviour gap. J Agric environ Ethics 2006;19(2):169–94.
Vitell SJ, Singhapakdi A, Thomas J. Consumer ethics: an application and empirical
testing of the Hunt–Vitell theory of ethics. J Consum Mark 2001;18(2):153–78.
Zahra SA, LaTour MS. Corporate social responsibility and organizational effectiveness: a
multivariate approach. J Bus Ethics 1987;6(6):459–67.