The Introduction To Consumer Ethics

Published Date: 02 Nov 2017

1.0 Introduction

Are customers always right and businesses best served by treating their customers well? There are certain precepts about customers that "the customer is not always right". This has led to norms of how organisations treat customers, the notion that marketing activities should fulfil consumer needs and that organisations need to secure consumers’ personal and social well being (Sorell, 1994). Tallontire, Rentsendorj & Blowfiled (2001) found that ethical consumerism is a growing phenomenon that underpins ethical trade activities. Since the late 1970s, there is considerable attention that leads to ethical problems in businesses, which interest both academics and business practitioners (Vitell & Muncy, 2005). The reason that researchers show interest is because millions of dollars have been lost in counterfeiting and piracy; the impact of globalisation and the invention of the internet accelerated and highlighted consumer ethical issues. (Chatzidakis & Mitussis, 2007). For instance, in 2008, consumer theft in retailing was estimated at more than $43 billion worldwide, including $ 14 billion in North America and $18 billion in Europe. More recently, a report by the New Economics Foundation suggested that, despite the rapid growth of ethical consumerism to date, this is only the beginning of a market which has immense future potential (Doane, 2001).

True enough that there is an increasing number of people make their purchase decisions on the basis of ethical values, such as environmentally friendly products and production methods, labour standards (wage rates and working conditions), and human rights (Tallontire, Rentsendorj & Blowfiled, 2001). Recently, consumers appear to exercise their moral principles in a more ethically minded when making purchases. It is being exposed that there is an increase in the sale and demand of fair trade and organic products (for example, ethical consumerism (Shaw, Shiu, & Clarke, 2000) and some consumers’ even attempt to punish ‘unethical’ organizations (for example, boycotting (Shaw, Newholm, & Dickinson, 2006)). However, it is impossible to assume consumers always behave ethically. Consumer attitudes towards ethical marketing reveal changeable, even fickle consumer ethics. The ethics of the consumer can shift quickly. Moreover, looking critically at recent trends, it can be argued that so-called ‘ethical’ consumers are potentially just consuming the status of ‘being ethical’.

1.1 Origin and definition of ethics

Ethics is a branch of philosophy that studies morals and values. Centuries ago, Aristotle referred to character, which he called "ethos", as the strongest means of persuasion (Lane Cooper, 1960). In Roman times, the emperor Justinian was the first to integrate ethics into the legal system and to establish schools to educate lawyers concerning ethics morality, and law. Napoleon established a code of thirty-six statutes based on the concept that all citizens, regardless of circumstances of birth or social stature, should be treated fairly and equally. Indeed, every civilization has recognized the need for establishing laws and codes to guide human relationship and behavior (Metcalfe, 2003). Ethics studies the differences between right and wrong, and through these studies philosophers have developed several theories. Some major ethical theories are egoism, intuitionism, emotivism, rationalism, and utilitarianism.

Over years of research, the term Ethics has been developed into a number of definition and such concept had been proven by many researchers or expertise. Ferrell, Fraedrich and Ferrell (2010), define ethics as the study and philosophy of human’ activities, with a specific purpose of determine whether a particular action or behavior is right or wrong. The existence of the concept of right and wrong was mostly used to govern the behaviors of society members in different perspectives. It act as an important factor during the effort of making a right decision as the intention is based on the level of personal moral, values and beliefs which embrace or passed down generation by generation in their family. In addition, equipped with a strong religious background allow to inject a moral values into every human being. People who possess with more moral values can avoid themselves from behaving unethically in the society. Unfortunately, in today’s society, majority individuals do not behave accordingly and as the effect of selfish and greedy in order to achieve their own ultimate projected interests.

Until now, the word, ethics, has been applied to many different discipline areas such as business, consumer, education, environment as well as the society. In social environment, when someone intents to make an ethical decision, it is advisable that he or she to cope with their cognitive thoughts especially dealing with the values and consequences behind their action as this will lead them to be evaluated by the society members. Individuals need to consider their scope of actions as this may affect other’s welfare if making the wrong decision. In short, ethics play a critical role in every aspect of the society either business, education, marketplace and others. In nature fact, we are living in different culture, situation and background, thus there must be a balance between actions and nature.

1. 2 Consumer Ethics

It could be construed that the term ‘consumer ethics’ simply means looking at ethics from the perspective of consumers. Mintel (1994) used the term ‘ethical consumer’ to describe those consumers who considered environmental issues, animal issues and ethical issues, including oppressive government and weapons, when shopping; this term is now widely used when referring to such a consumer group. Consumer ethics is also defined as to search the factors that have correlation with ethical issues and to determine the attitudes of consumers towards certain ethical behaviours (Muncy & Vitell, 1992). Muncy & Vitell (1992) established a consumer ethics scale that examines the extent to which consumers believe that certain questionable behaviors are either ethical or unethical. Looking into consumer ethics, it is also important to study consumer ethics across culture, in the marketplace and global marketplace as well as the importance of it.

Marylyn (2001) investigates that having a sufficient knowledge on consumer products is a significant factors as it could be useful in gaining more benefits instead of ordinary knowledge enhancement. A scientific proven from Boulstridge & Carrigan (2000) reveal that consumers are mostly concentrate on their own beneficial values in term of price, quality rather than the corporate ethics. In other words, they do not simply put their empathy on the ethical issues toward a certain company, what their main concern is how to get a premium quality product in a lower price. A large scale study by Cowe & Williams (2000) found that more than one third of consumers in the UK described themselves as ‘ethical purchasers’, yet ethically accredited products such as Fair Trade lines only achieved a 1-3% share of their market. Cowe & Williams (2000) named this the "30:3 phenomenon", since approximately 30% of consumers profess to care about ethical standards, but only 3% of purchases reflect these standards.

1.3 Ethical consumption

Cooper-Martin and Holbrook (1993) define ethical consumer behaviour as "decision-making, purchases and other consumption experiences that are affected by the consumer’s ethical concerns". A number of decision-making models have been proposed within business ethics, the majority of which approach the issue from an organizational perspective (Ford and Richardson, 1994). Comparatively little attention has been given to the role that ethics plays in individual purchasing behaviour (Nicholls & Lee, 2006). Despite this, there is a number of common ethical issues emerge, especially Fair Trade principles, the use of organically grown and processed materials, working practices in developing nations and the depletion of natural resources (Sanfilippo, 2007).There are consumers who may be more sympathetic toward ethical issues, and hence more likely to choose ethical products.

Ethical sensitivity is reported to increase with consumers’ age, to be greater in female consumers to increase with affluence and to be greater at lower educational levels (Dickson, 2005). One’s confidence and moral maturity in ethical decision making may also be related to one’s perceived locus of control (Forte, 2004). Individuals with an external locus of control tend to believe that ethical dilemmas are beyond their control whereas those with an internal locus of control are more likely to make ethical decisions in defiance of conflicting social or situational pressures (Singhapakdi & Vitell, 1991). Carrigan & Attalla (2001) suggest that consumers tend to make ethical purchases that do not require them to pay more, suffer loss of quality or make a special effort.

While guilt is commonly assumed to occur post-purchase (Hiller, 2008), Steenhaut & Van Kenhove (2006) found that anticipated guilt acted as a partial mediator between consumers ethical beliefs and intentions. In focusing on the emotional aspects of decision making they have found that thinking about the negative consequences that could result from a decision may trigger negative anticipated emotions, in turn deterring the consumer from a perceived unethical course of action. Alternatively, making choices that are likely to have more positive implications can arouse positive emotions making such decisions more likely (Steenhaut & Kenhove, 2006).

1. 4 Ethical Consumerism

The ethical consumer considers ethical and moral aspects present in production and in the delivery of goods, even if this happens at a long distance. These aspects include both social and environmental issues, for example the use of child labor, suppressing or preventing labor unions and testing on animals (Uusitalo & al 2004). Accordingly, Valor (2007) has defined ethical consumerism as an activity where consumers are demanding that human rights (including the right for a safe environment) are respected in the manufacturing process. Barnett et al. (2005) claim that everyday consumption practices are always shaped by some sort of ethical dispositions; hence they can be regarded as ordinarily ethical. The same authors see shopping not being just an individualistic, self-indulgent and narcissistic act. Instead, involves thoughtfulness about the desires and needs of others and it is in fact based on relationships and love. All in all, important aspect of ethical consumption is explicitly expressed commitment or obligation towards distant or absent others.

The notion of ethical consumer has developed in society that can be referred to as the consumer culture. The growth of consumerism in the affluent Western countries is illustrated in increasing per capita consumption that is paralleled by a constant rise in inflation-adjusted consumer expenditure. Strong (1996) has listed four main reasons for the rise of ethical consumerism: Increased media coverage; increased levels of information; greater availability of alternative products, and the shift in values towards sustainable development. Harrison et al. (2005) add to the list of reasons behind this ethicality boom the globalization of markets, the rise of transnational corporations and brands, and the shift in market power towards consumers.

There are a number of initiatives, cross-national and country-specific, created to propose code of conducts and labels for ethical trade such as Fairtrade Labelling Organizations International, Fair Labor Association (US), Ethical Trading Initiative (UK) and the Clean Clothes Network. For example Clean Clothes Campaign (CCC) is an alliance of organizations of 12 European countries. Its members constitute from trade unions and non-governmental organizations with varying interests that include consumer advocacy, women’s rights and poverty reduction among other things. The CCC exists to support garment workers in their efforts to create substantive, sustainable improvements in working conditions. Studying ethical consumption means stepping out from the economist point of view where individuals are seen as rational beings whose goal is the maximization of utility. When it comes to the decision making process, ethical consumers are still not ignoring price and quality but applying some additional criteria when selecting products (Harrison et al., 2005) Due to the young nature of the discipline there is no one established definition of an ethical consumer. Langeland (1999) defines the ethical consumer segment as follows: A significant group of people are considering the wider impact of their purchasing decisions and are trying to favor the products with improved environmental or social performance. Strong (1996) adds the concern for the developing countries to the definition and states that ethical consumerism refers to buyer behavior that reflects a concern with the problems of the Third World. Strong (1996) also incorporates all the principles of environmental (green) consumerism to the concept of ethical consumption, just adding the "people" element in it. This is in line with the concept of caring at distance that Barnett et al. (2005) discuss. This means that concern for the people who are close to you can be transformed into actively caring for more distant others, which is essential when making ethical choices.

2.0 Content

2. 1 Consumer Ethics in Marketplace

According to Cowe & Williams (2001), shoppers are highly aware of ethical issues and many are ready to put their money where their morals are. A third of consumers are seriously concerned with ethical issues when shopping and a quarter have investigated a company’ social responsibility at least once (Cowe & Williams, 2001). Consumers appear to exercise their moral principles and be more ethically minded when making purchases (Fukukawa, 2010). There is a great increase in the sale and demand of fair trade and organic products and some consumers even attempt to punish "unethical" organizations; for instance boycotting (Shaw, Shiu & Clarke, 2000). There are both sides of ethical purchase behavior which are negative and positive.

For many years the main form of ethical consumerism was "negative ethical purchase behavior", or the boycott. Some boycotts are organized by campaign groups, for instance; Baby Milk Action’s boycott of Nestle (Tallontire, Rentsendorj & Blowfield, 2001). These cause consumers to choose to avoid purchasing certain products or avoid goods and services that are associated with these issues. In some surveys such issues generate high response rates. For example, in the Mintel special report (1990), 50% stated that they would not buy a product if it was tested on animals, and 21% stated that they would not buy a product if it was from a factory farm (as cited by Tallontire, Rentsendorj & Blowfield, 2001).

Alternatively, there appears to be a positive trend towards attempts to purchase goods with positive ethical attributes as well (Tallontire, Rentsendorj & Blowfield, 2001). Many consumers have attempted to include purchasing ethical products in their positive purchasing strategies. For a clear example, consumers purchase organic products and demand for fair trade. Consumers’ reasons for purchasing organic produce are many and varied. A survey by the Consumers Association in 1998 suggests 83% buy organic food to avoid pesticides, 75% because they believe it to be kinder to the environment, 70% are concerned about intensive rearing of animals, 68% because it tastes better, 40% because they want to support local farmers and 36% because they are worried about Bovine spongiform encephalopathy (BSE) also known as the mad cow disease (cited in Tallontire, Rentsendorj & Blowfield, 2001).

Furthermore, consumers demand for fair trade is increasing, which shows positive purchasing behaviour in consumers nowadays. For example, sales of Fairtrade Mark coffee were worth £6.6 million in 1996, with volume sales increasing by 39% (Mintel, 1997). However, some people on low incomes may have a higher percentage of "ethical" purchases in relation to overall expenditure than better-off people (Newholm, 1999).There are two more factors that appear to be important in consumers’ willingness to pay a premium, which are the awareness of the ethical issue related to the product and market characteristics of the product. For instance, despite Nike’s "ethically questionable" engagement with child labour in developing countries, consumers still continue purchasing Nike’s products (Caarrigan & Attala, 2001). Ethics become just one of the many values consumers may "purchase" in pursuit of consumer satisfaction (Holbrook, 1999).

Some many assume or believe that consumers are controllable and therefore they are responsive to marketing inputs. Consumers also consistently proved themselves unpredictable and unmanageable in which they show different images and faces in purchasing (Gabriel & Lang, 2006). In the aspect of pricing, products with ethical characteristics tend to be more expensive than normal products.

2.2 Behavior of Consumer Ethics

Ethical or unethical consumer practices can be explained as the rightness or the wrongness of certain actions on the part of the buyer or potential buyer in consumer situations (Dodge, Edwards, & Fullerton, 1996). In the consumer behavior literature, very little attention has been focused on the psychological mechanisms that enable consumers to propagate a system that implicates harm (Devinney, Eckhardt, & Belk 2007). It is an attempt to fill the gaps specifically with aim understands the cognitive biases and motivated that prevent consumers from making consistent and ethical judgement in purchase contexts. According the review in Dittmar (1992), past research has shown that people choose and use possessions and brands that reflect their actual and/or desired identities.

In particular, sustainable, ethical or socially conscious consumerism can refer to the purchase of products considered more ethical than other alternatives, the boycott of companies involved in unethical practices, post consumption behaviours such as recycling and the reduction of consumption itself (Newholm & Shaw, 2007). Consumer researchers have so far failed to make a substantial contribution to the tackling of pressing problems related to sustainability (Mick, 2008). For this to happen, however, it is necessary to develop theories of consumer behaviour able to explain ethical and altruistic purchases in contrast with the traditional marketing theory that is focused on self-interested consumption motives (Thogersen, 1996).

Consumer research in this area has produced largely inconclusive results (Cotte & Trudel, 2009). Some of the reasons for these unsatisfactory outcomes can be related to (Cotte & Trudel, 2009). The focus on many different behavioural domains without discriminating across behavioural instances (Webster, 1975); the excessive reliance on self-reported measures of ethical behaviour that are significantly affected by social desirability biases (Auger & Devinney, 2007); and a superficial understanding of the philosophical assumptions of different definition of ethics and how this might translate into consumer behaviours (Caruana, 2007).

Johnstone (1975) defined religion as a system of beliefs and practices by which a group of people interpret and respond to what they feel is mystical and revered. Religion affects individual behavior through two sources. First, religion stipulates rules and obligations as well as sanctions that directly control and influence individual’s behavior (Harell, 1986). Second, as an influential social institution, religion has an indirect role in shaping culture, norms, attitudes, and values in society (AI Habshi & Syed-Agil, 1994). Some prior studies in religiosity and consumer ethics classified religiosity into two categories which is extrinsic and intrinsic. The extrinsically motivated people use his religion whereas the intrinsically motivated live his religion (Allport & Ross, 1967). However, Donahue (1985) argued that intrinsic religiosity correlated more highly than extrinsic religiosity with religious commitment. Hence, intrinsic religiosity and extrinsic tended to have relationship with consumer ethical behavior.

2.3 Factors that affect consumer ethical consumption

Below are a few general factors that would affect individual ethical consumption and their perception on the importance to ethics and social responsibility.

Gender

Gender is generally recognized as an important personal characteristic influencing an individual’s ethical decisions. For example, Gilligan (1982) argued that men and women differ in their moral reasoning. In particular, men are more likely to adhere to the "ethic of justice" by emphasizing rules and individual rights. Women, however, are more likely to adhere to the "ethic of care’’ by emphasizing relationships and compassion. In a recent meta-analysis, Franke(1997) used data from more than 20,000 respondents in 66 samples and revealed that women are more likely than men to perceive business practices as unethical. Although there has been no research directly investigating the effects of gender on perceived important of ethics and social responsibility, it has been incorporated in numerous marketing ethics studies. Taking actions in the interest of the customer would enhance company performance and would contribute to a perception of greater importance of ethics in organizational effectiveness. Thus, women to attach greater importance to ethics and purchase products that are more ethical to them compare to man.

Age

Marketing ethics theories generally recognize personal characteristics as determinants of various aspects of a marketer’s ethical decision-making process. Age could also directly influence an individual’s ethical decision. According to Kohlberg’s (1981) cognitive moral development theory, an individual’s cognition, emotion, and judgment may change as he or her moves through stages of moral development. Given that an individual moves through stages of moral development and the changes are essentially due to life experiences, intuitively one would expect a positive relationship between age and ethical behavior. In fact, Terpstra et al. (1993) have argued that people tend to become more ethical as they grow older. A good explanation is that as people age they tend to become less concerned with wealth and advancement and more interested in personal growth (Hall, 1976). In other words, older marketers are likely to appreciate the long-term benefits (to organizational performance) of acting in an ethical and socially responsible manner. Accordingly, there will be a positive relationship between a marketer’s age and his or her perception about the importance of ethics.

2.4 Culture and Consumer Ethics

Tylor, Sir Edward Burnett defined the term "culture" as that societal member acquire and follow the compounded elements of culture which comprise from a cumulative collections of knowledge, belief, art, morals, law, custom, that provide guidance to behave accordingly in the society. According to Gordon & Ditomaso (1992), support that culture are formed by a combination of practices, values, norms, beliefs, ritual, with an assumption that the societal members are about to obey the law of nature. In modern explanation, culture may be considered as the shared beliefs and values of a group that help to shape and lead to positive organizational climate (Musiime, Ntayi & Musigire, 2009). A view that may help understand culture is to look at its levels (Schein, 1985). Schein (1985) proposed that culture has three levels. The most obvious concerns the works of culture, its artifacts. These are apparent and portray some of the values of the culture. Public works, works of art, museums, hospitals and universities can reveal the value that the culture places on the arts and sciences.

According to Pitta, Fung & Isberg (1999) states that a deeper and less obvious level comprises those things which individuals hold dear and which guide their behavior. They serve as rules of conduct and can be important guidelines for how individuals should or ought to behave (Pitta, Fung & Isberg, 1999). For instance, the Japanese elevation of politeness in behavior may reflect the limited physical space in the island nation. Violations of the norm cause others surprise and anger and sometimes lead to sanctions against the offender. The third and hidden level represents values, and specifically represents the assumptions used to perceive and deal with reality. For example, some cultures perceive people as essentially good while others tend to take a more pessimistic view. It is difficult to separate the lower two levels since attitudes and values tend to overlap (Pitta, Fung & Isberg, 1999).

Culture had been further elaborate into organizational culture, social culture and others. Schein (1997) highlighted that organizational culture is a basic assumption which serves two fundamental purposes which are more to the survivorship as well as the growth of an organization either external adaptation or internal integration. The ethicalness of a particular decision is interdependent with the level of moral development in term of ethical climates and culture of an organization. (Fritzsche, 2000; Sims & Keon, 1999). Kendall and Kendall reveal that there is a connection web between the organizational and consumer ethics. If companies are willing to manage their ethical responsibilities properly, it could be beneficial for both parties including successfully implant a purposeful relationships. However, organizational and consumer ethics are collide frequently especially dealing with own interest issues. Organization must take care of shareholder, employee and any company’ related interest for example to earn adequate profits, to maintain a long term purposeful relationship with their stakeholders. (Kendall & Kendall, 2011) Furthermore, it was stated that in order to encourage people to make an ethical decision, one essential step that must be taken into account is underlying ethical issues awareness of the uncertain environment.

According to John Gardner, high organizational trust can advance in many aspects, like level of consumer ethics; employee’ productivity; product quality; work flexibility but effective as well. In consumer perspectives, their basic goal is to own an assurance for what they spent; good product in term of quality and safety, yet organization might hope in gaining their loyalty in return; long term attractive revenue. Edelman (2012) also found that trust and transparency are one of the key success determinants for any business organization. Customer’ confidence toward the company’ brand name, reputation, product or services will become other competitive advantages for the company such as less price sensitive toward a product. From this situation, it showed obviously that there was a reciprocal relationship between the organization and the consumer group. Culture help to shape an organization and organization has relationship with consumers and affect the consumption of consumers. Therefore, culture has indirect affect on consumer ethics.

2.5 Consumer Ethics across Culture

There is common agreement that a country's culture is directly related to the ethical behavior of its managers (Pitta, Fung & Isberg, 1999). The behavior is exhibited in two main ways: first, by overt actions such as public or corporate statements and actions about ethical behavior; second, by the collection of the group of ethical attitudes and values. One problem in dealing with culture is that it is difficult to define universally. It represents the values and patterns of thinking, feeling and acting in an identifiable group. Ethics is a part of culture in which to study ethical choices without considering the cultural context is not realistic (Pitta, Fung & Isberg, 1999). Differing cultural reactions to consumption practices would be expected to occur, not only because moral values are socially and culturally constructed. This is also because there are cultural differences in social roles, gender roles, institutional structures, welfare expectations, laws, and traditional rights, privileges, and obligations.

For instance, Ger & Belk (1999) studied perceptions of and behaviors regarding materialism in the U.S., Turkey, Romania, and Western Europe. They found that while those in each area condemned materialism as a shallow, asocial, and ultimately unrewarding consumption orientation, most also wanted higher salaries, better housing, a nice car, and other materialistic goods and services. What differed by culture was the manner in which these behaviors were justified in light of their condemnation of materialism. They used various accounts, consisting of justifications or excuses to explain their behavior. Americans felt they deserved more because of their hard work and cleverness. Romanians also felt they deserved more, but based more on their relative deprivation under years of Communism.

Although some older Turks felt they could not realistically desire anything materially, most felt they needed more and justified it as being for their children and family. And Western Europeans condemned gadget-loving Americans as being the real materialists, while they themselves had the good taste to spend their money well on good food, good wine, fine music, and enriching travel. Thus each culture has different consumer behavior and their ethical values differ as well. Due to varying conceptions of what is good for the individual and what is good for society, the judgment of what constitutes an ethical breach in the first place would be expected to vary greatly depending on cultural orientation (Pitta, Fung & Isberg, 1999).

2.6 Consumer Ethics in Decision Making

A fundamental perspective to understanding consumer ethical decision-making can be found in four-component model (Rest’s, 1979). The four-component model that depicts the ethical decision-making process of an individual are recognize the moral issue, make a moral judgment, establish moral intent, and implement moral actions during the ethical decision-making and behavior process. Consumers are making principle choices in greater number each year and that ethical products are forging ahead towards becoming the norm or dominant brand in my industries (MacGillivray, 2000). However, unethical consumer behavior with decision-making, a form of rebel warfare against companies (Tian & Keep, 2002), results in significant damage to business profits and market morale (Steenhaut, 2006). In another type of dishonest consumer behavior, consumers deliberately return goods for reasons other than actual faults in the product (King & Dennis, 2006). For example, a person might decide to buy a high-definition, large screen television set to watch the Olympic Games and then return it afterward.

Within the family home, consumer decision-making is influenced by the structure of the family unit. Family structures have been changing rapidly since the 1970s, with the emergence of blended (Belch & Willis, 2002). Besides, Belch & Willis (2002) claim the changes in family structure to the increased fluidity and uncertainty of relationships; while conversely, McGregor (2000) presents the outcome of these changes as the rise in smaller families, the declining fertility of women and the fact that women are having children later in life. These issues all have an impact on family consumer decision-making. Social psychology research in consumer ethical decision-making suggests that variations in ethical judgment often occur as a function of individual differences in ethical ideologies (Kohlburg 1976). The work of Smith and Cooper-Martin (1997) suggests a process by which consumers integrate perceptions of target vulnerability and product harmfulness when making ethical evaluations of specific selling strategies. This process begins with a marketer developing a targeting strategy based on the key characteristics of the product and the attributes of the target.

Consumers when making ethical decisions, consider not only their personal values, such as their ethical beliefs, but also the relationship that they have developed with retailers. Tian & Keep (2002) find that consumers engage in fraud to retaliate against businesses that commit unethical acts against them. Kenhove et al. (2003), in contrast, reveal that loyal consumers commit less questionable behavior when dealing with retailers. Besides, Consumers who express greater commitment also are likely to forgive unethical business behaviors. (Ingram et al., 2005). Thus, it show that consumer ethics decision making refers to the moral rules, principles, and standards that guide consumers in selecting, purchasing, using, and disposing of goods or services in a socially responsible way (Muncy & Vitell, 1992).

2.7 Business and consumer ethics

"Ethical products" brings together the ethical company and the ethical consumer. The conventional approach to such products is to see the ethical dimensions of a product which can be linked to the product itself, its marketing, the corporation behind it, or even the country it originates from. According to Crane (2001), there are a number of complicating factors relating to how consumers perceive ethical product, and about the marketer’s ability to manage the ethical dimensions of a product. Organization need to realize the reality that many important decisions which shape the perceived ethics of any product offering will occur beyond the organizational boundary. Therefore, firms which need to address ethics as a product or brand issue and look not only at their own activities but also those of their parents and subsidiaries and those of firms throughout the value chain (Crane, 2001). Crane’s conclusion is that there is no such thing as a definitive "ethical product", but only ethical product attributes and augmentations relating to any number of possible ethical dimensions, which the customer must recognise, believe, value and, ultimately, buy into.

Companies are expected to behave more ethically because society grants them certain privileges such as use of economic infrastructure and having a secure legal framework. Therefore, society tends to have expectations about how businesses or firms should behave in return. A key difference in ethical expectations of businesses compared to individuals is probably the expectations of moral behavior go beyond simple social norms. It is to the extent of reflecting the scale and power of large businesses, and the influence that they can wield within society. However, collectively consumers have the potential to exert considerable power, and when mobilized through the power of the internet or other media they can sometimes combine to wield it very effectively through boycotts or other forms of campaign to promote change (Auger et al. 2003; Clouder & Harrison, 2005).

2.8 Importance of consumer ethics

Concerns of ethical problems in business and marketplace have dramatically increased over the past decades and it is important for the researcher to find out the solutions. These studies have focus used mainly on consumer side on their ethical decision making process. According the review by Hunt & vitell (1986), individuals and groups will differ in their ethical behavior and decisions which revealed by studies in marketing ethics. It can be argued that ethical judgments are made by consumers and it might influence the consumer’s acceptance or rejection of the company products. Consumers normally will recognize the organize the organizations that attempt to be responsive to various ethical and social factors in the marketplace over the time (Laczniak & Murphy, 1993).Usually consumer judged the product base on the company reputation and reorganization. Company produces harmful products in the marketplace. However, they also use their company name to organize some donation event for helping necessary people. Because of the ethical responsiveness, consumer will evaluate good rating to this company base on what they see and observed.

It is generally believed that consumer making decisions that involving ethical issues is based on different moral philosophies (Hunt & vitell, 1986). In general, moral philosophies to be important factors influencing a consumer’s ethical decisions. There are account two aspects of personal moral philosophies, idealism and relativism can explained the ethical judgments (Forsyth, 1980). Besides, moral philosophy is also an important determinant of individuals’ response to questionable business practice (Vitell, 1991). The deontological and teleological example was similar to idealism and relativism of the two-dimensional personal moral philosophies concept (Forsyth, 1980).

Furthermore, all the moral standards that related to the culture in which they occurred are the moral relativism (Schlenker & Forsyth, 1977). Relativists is measure the circumstances rather than the ethical principles that are violated (Forsyth, 1992). Some time consumer found problem on the product but they did not report to the relevant department until the government or relevant department disclosure it. They weight the problem base on the circumstances because they might thinking this problem will not affect the great circumstances even it is unethical. Idealism refers to regardless of the consequences of that action individual are focuses on the inherent rightness or wrongness of an action (Swaidan et al., 2003). Consumer has a rightness to know how safety the product their use that can collect those information and proof from the relative company. Companies have a responsibility to provide consumers with whatever it is they pay for and products are assumed to be safe for ordinary use. Nonetheless, some companies still did not fulfill they duty to provide safety product to consumer. Drug are the one example that harmful healthy and many food product contain harmful chemicals such as preservative. Many consumers accredit the rule and regulation might protect themselves on what the product they use but not always.

Product safety policy is a larger effort to protect and enhance the consumer health. This policy normally based on the risk analysis and it consist some components (Jensen & Sandoe, 2002). Consumer ethics will have important contributions to make to one of the risk analysis as well which is risk management. The principles of ethics may help the consumer to measures the risks against the expected benefit of product consumption to avoidance of excessive regulatory burden on individuals (Thompson, 2001). With this principle, the ethics of consumers might able to help them weight up the risk of the product that consumption. Usually it will in term of adverse health effect for the individuals. Therefore, how ethically that consumer’s play on their behaviour on the product safety is important.

2.9 Important of consumer ethics in marketplace

According the review of Alchian & Demsetz (1972) conclude that corporate ethical value is the central dimension of organizational culture influencing various aspects of an organization’s decisions on marketplace. Besides, corporate ethical values (CEV) can be defined as a composite of the individual ethical values of managers and both the formal and informal policies on ethics of the organization (Hunt et al., 1989). Organizational environment, of which corporate ethical values is a part, has generally been recognized as an important determinant of ethical behavior by marketing ethics theories. Thus, CEV is considered an important aspect of organizational environment and marketplace.

Given the emerging relationship in marketing and the recognition that ‘‘trust’’ is a very important antecedent of relationship commitment (Morgan & Hunt, 1994), it has been argued that one of the important trends in current marketing thinking is the emphasis on ethical and socially responsible behavior (Singhapakdi, 1999). In fact, according to a survey of U.S. members of the American Marketing Association, Singhapakdi et al. (1995) reported that, on average, American marketing professionals believe that ethics and social responsibility are important determinants of organizational success in marketplace. In addition, it was reported that American marketers who perceive ethics and social responsibility to be important would generally become more ethical in their intentions than their counterparts (Singhapakdi, 1999).

According to Hunt and Vitell (1986, 1993), how an individual perceives an ethical problem in a situation is an important factor of his or her ethical decision making process. Specifically, they depicted the perception of an ethical problem as the catalyst of the whole ethical decision process. Furthermore, Singhapakdi & Vitell (1991) found positive relationships between perceptions of ethical problems and the consumer of different aspects of feasible alternative solutions to solve an ethical problem. On the other hand, the perceived role of ethics and social responsibility (PRESOR) scale, developed by Singhapakdi et al. (1995), was adapted to measure the respondents’ perceptions about the importance of ethics in marketplace success.

2.10 Generation Myth and Consumer Ethics

Raines (2003) categorized the generations into four distinct categories which are traditionalists, baby boomers, Gen X and Gen Y (Millennial). She defined that traditionalist was those who born between 1925 and 1945, members are predicted to be very loyal and hardworking in nature especially when dealing with the workplace. Baby boomers were born between 1946and1960; comply with strong ethics in their life. Generation X is within 1961-1980 which are more advance in technology area and quite dominant in electronic industries. Meanwhile, member from Generation Y was born from 1981-2001, can be recognize as Internet Generation.

Further evidence from The Social Work Dictionary had shown that there was an obvious difference between these four generations in term of perceived values, ideas, personal lifestyles within the same society. According to Lynne et al. (2002), they assume these traditionalists are compounded with conformity, patience, duty before pleasure while baby boomers are most dealing with optimistic, personal growth, participation. On the other hand, Generation X cope with critical thinking traits, self-reliance which are different with Generation Y whose focused more on self-confidence, morality, knowledgeable and others. Hence, age group that varies from perceived values, beliefs or attitude may tend to create a misunderstanding due to ineffective communication between each other, a so-called generation gap. (The Concise Oxford English Dictionary)

Peggy (2010) addressed that there were two highest generations that provides absolute value to marketers in the business world in this current century which are Baby Boomers and Gen Y. Her finding was clarify that Gen Y members are high possibility to having such behavior like materialistic, high level of ethical consumption as if compared with Baby Boomers. In this particular circumstance, the result indicates that Gen Y’ were the best consumer group with highest level of ethics amongst the four generations. On another perspectives, LaBarbera et al. further argued that consumer ethics are pervasively dealing with consumer’ religiosity instead of generation issues. Their stands being supported by a set of regression analyses and was concluded that there is a strong relationship in between.

There was numerous set of myths regarding of consumer ethic and consistently reveal by researchers. First, consumer’ ethics come from organizational ethics or consumer themselves. From organization viewpoint, Doane (2001) agreed that the more effort putting on satisfying the customer, the more favorable the situation will be. They found that those ethical consumers expressed their habits of buying products based on the developed behavior of the organization. Meanwhile, Timony et al. (2012) said that there is no longer a change must be initiated by the marketers anymore; its responsibilities are merely switch to consumer perception. However, the result show that the demand of ethical products still unable to represent the actual decision making of consumer. Much of the difficulty in understanding the complexity of ethical consumerism resides in the failure to grasp more clearly and consistently what it is that motivates individuals socio-politically and how it is that the purchasing context operates to reveal or not reveal the wants, desires, values, constraints, beliefs, and mindset of the individual doing the purchasing..

Malinowski’s (1992) more functional definition argues that myths serve as charters for social action and are there to proper activity within a society. According to this interpretation, the ethical consumer is a myth in that it is an idealization of what consumers should be doing to be proper members of society. Unlike the unattainable hero, this represents a level of behavior that is achievable. Second, it is also important to ask whether the notion of an "ethical" consumer’ is the correct specification for what individual really mean when they talk about supposedly "ethical" purchasing behavior. Linking consumerism to ethics, with its moral connotations of absolute right and wrong, is difficult to justify in today’s world, where globalization implies natural convicts between the standards of societies. For example, although consumer activism and pressure from non-governmental organizations (NGOs) led to Starbucks prominently displaying and selling Fairtrade coffee, the sales levels have been much lower than expected and demand has remained at a flat rate since its introduction in 2001. Indeed, our own casual empiricism at local coffee outlets indicated that not a single barista could recall a customer either asking for Fairtrade coffee or complaining that it was not available.

Further lack of ethical behavior in the marketplace can also be seen by the increasingly high levels of counterfeit goods purchased around the world, whether they are pirated DVDs or fake Louis Vuitton handbags. For example, The Economist (2006) has reported that the sale of pirated DVDs in China deprived US film makers of approximately $2.7 billion in 2005, a massive amount compared to the $250 million or so taken in total box office receipts in the country. Also, Hines and Ames (2000) saying that the preference of ethical consumption is currently in the dramatically increasing speed to growing stage. Their assumption toward the studies is that the higher ethical initiatives been generated, the higher the measure for consumer ethics.

2.11 Hunt and Vitell Theory

What will affect consumers in purchasing and acting ethically? According to Hunt and Vitell (1992), cultural norms are one of the constructs that affect one's perceptions in ethical situations. There are at least three major comprehensive theoretical models of decision making process in situations involving ethical issues in marketing and business. But Hunt and Vitell model is the only one that can be readily applied to individual consumer behavior. Therefore, the Hunt-Vitell model is the most appropriate theoretical model for testing research questions involving consumer ethics. The influence of cultural and group norms or values on individual behavior was also noted by Ferrell & Gresham (1985). However, neither these theoretical conceptualizations of ethical decision- making nor subsequent empirical investigations tell us how culture influences ethics and ethical decision-making. How culture influences one's perceptions and ethical decision-making in business. According to the Hunt- Vitell model (1993), the individual decision maker’s perception of an ethical problem in a situation is followed by the perception of various possible alternatives that might be used to resolve the problem. Once the consumer has determined a set of perceived alternatives or courses of action, two major ethical evaluations might take place. First is the deontological evaluation and the other is a teleological evaluation.

The major difference between these two theories is that, deontological theories focus on the specific actions or behaviors of an individual, teleological theories focus on the consequences of those actions or behaviors (Hunt & Vitell, 1986). In other words, deontological theories are concerned with the inherent righteousness of a behavior or action, whereas teleological theories are concerned with the amount of good or bad embodied in the consequences of the behavior or action. Hunt & Vitell proposed that "cultural norms affect perceived ethical situations, perceived alternatives, perceived consequences, deontological norms, probabilities of consequences, desirability of consequences, and importance of stakeholders" (1986). However, Hunt-Vitell (1992) general theory of ethics does not specify how cultural norms influence ethical decision-making either. Nor have empirical tests of the theory examined the influence of cultural norms on ethical decision-making (Singhapakdi & Vitell, 1991).

In most situations a consumer’s ethical judgment are likely to be a function of both deontological and teleological evaluations. Ethical judgements determine behaviour through the intentions construct, but ethical judgement might differ from intentions because one’s teleological evaluation also affects intentions directly. Furthermore, the action control construct may cause behaviour to be inconsistent with both intentions and ethical judgements. After consumers choose behaviour, there is an evaluation of the actual consequences resulting from that behaviour. These consequences provide feedback to the individual’s personal experiences when compared to the originally expected consequences. The hunt-Vitell model contains several distinct background factors that impinge upon the entire decision-making process.

2.12 Moral Philosophies

Moral philosophy often divides ethical theories into two types: theories that privilege the right, and theories that privilege the good. Definitions of the good refer to the properties or outcomes that our actions should endeavour to bring about; definitions of the right refer to what people and organizations ought to do in responding to ethical imperatives. Theories of the good therefore focus upon what outcomes to promote, whereas theories of the right focus upon what principles to honour, or on questions of duty (Pettit, 1991). Discussions of moral philosophy inevitably distinguish between these two broad positions, if only for heuristic purposes.

Consequentialism

Theories which privilege questions of the good are often referred to as consequentialist - they are concerned with defining ethical conduct by reference to the consequences or outcomes of actions. These approaches are also sometimes called teleological, because they start by specifying an end (or ‘telos’) independently of moral obligations. They then define the right thing to do as acting to maximize the good. For example, utilitarianism advocates practices that maximize the overall sum happiness. Peter Singer is an important contemporary philosopher who has employed consequentialist arguments. He is well known for his advocacy of animal welfare. Singer opposed to the other main approach to moral philosophy – the deontological approach – because he thinks it defines ethics narrowly in terms of a system of rules. Singer argues that consequentialist approaches are more practical and realistic, in so far as starting with goals means that judgements of actions will always depend on contextual factors (Singer, 1997).

High levels of consumption are a major problem in modern societies, an unjustified "using up the world" (Singer, 1997), and a foolish misallocation of resources. Consumption, from this perspective, is associated with the conspicuous and excessive display of social position. In particular, his argument that there is no good reason to restrict the scope of concern to our nearest and dearest, or indeed only to other people, seems highly appropriate to the field of ethical consumption, in which the fact of being one link in a much wider chain of relationships with strangers in distant locations is often made the basis of appeals to alter one’s consumer behaviour in order to bring about more ‘ethical’ outcomes.

Deontological

In contrast to consequentialist approaches, deontological or duty-based approaches define right action independently of its contribution to human happiness or other favoured goals. Deontological moral theories have gone through a revival since the publication of John Rawls’ (1972) A Theory of Justice. Rawls explicitly set about developing an alternative approach to utilitarian theories of ethics and justice. He argued that teleological theories implied that it is justifiable to exploit some people, or limit their rights, in pursuit of a more general utilitarian benefit. Utilitarian theories did not "take seriously the distinction between persons", tending to assume that collective choices of whole societies were analogous to individual choices. They therefore ignored what Rawls takes to be an inevitable plurality of views as to what constitutes the good. The plurality of values led Rawls to defend the priority of the right over the good, as a means of ensuring that definitions of the collective good do not come at the cost of basic individual liberties. Rawls’ work is important because it highlights the tension between the plurality of personal values and ethical positions on the one hand, and the degree of unity required pursuing collective outcomes and decisions on the other.

The limitations of universal prescriptions

Both consequentialist and deontological approaches are open to two related criticisms that are relevant to ethical consumption. Firstly, both present models of ethical conduct that appear to be far too stringent in the demands they make on the capacities of ordinary people – consequentialist arguments seem to imagine it is possible to collect, collate and calculate all sorts of information and chains of causality prior to action. While utilitarian considerations might be relevant in relation to evaluating collective, public decisions, they seem rather unrealistic as complete models of personal choice. Similarly, deontological approaches seem to present an implausible picture of actors rationally judging the degree to which each of their actions conforms to a very abstract principle of universalization. This criticism – of over stringent or unworkable models of ethical conduct - is related to a second problem with both consequentialist and deontological approaches. They end up presenting models of ethical conduct that are highly abstract and inflexible – they seem not to leave room for the complexities and ambivalences of ethical decision making, and in turn, they therefore present a highly abstracted model of the ways in which people are implicated and involved in their actions.

Virtue Ethics

Consequentialism and deontology do not exhaust the approaches to ethics that are relevant to ethical consumption. A third approach, virtue ethics, has become an increasingly important alternative in recent moral philosophy as an alternative to both outcome-oriented consequentialism and rule-based deontology (Swanton 2003). Virtue ethics makes new sorts of consumption arguments possible. Such virtues include justice, compassion, tolerance, courage, patience, persistence, intelligence, imagination and creativity. Virtue, on this approach, is a synonym for human excellence and goodness (Taylor, 2002).

The limitations of Virtue Ethics

One important distinction between virtue theory and both consequentiality and deontological approaches is that the latter two are both universalistic in their orientation – morality is understood according to notions of universal benevolence, or as acting in accord with principles that can be universalized to all others. In contrast, virtue theory does not argue that either universal benevolence or duty is the best motive for acting. Virtue theory tends to imply a version of partiality in ethics, in which caring for and acting to benefit some people more than others is morally acceptable. This seems to conflict with some basic principles of ethical consumption, to distant others, to non-human animals, and to the environment. The key challenge presented by virtue ethics, then, is that of finding ways of combining intimate caring for particular others with humanitarian caring about others in general (Slote, 2000).