Antecedents of Consumer Ethical Beliefs and Intention: The Development of Conceptual Framework and Analysis

Authors Avatar

Antecedents of Consumer Ethical Beliefs and Intention:

The Development of Conceptual Framework and Analysis

INTRODUCTION

Background of the Study

Ethics has received increased attention from the private and public sectors as well as from the academics over the past several decades.  In the West, the highly publicized incidents at Enron, Arthur Anderson and WorldCom have brought the topic of ethics particularly business ethics to the public’s attention.  The recent collapse of financial institutions in America notably Lehman Brothers and AIG Group due to the sub-prime mortgage scandals has sent “economic tsunami” across the world. The result of this is an unprecedented financial meltdown dubbed by many as the worst economic crisis since the Great Depression. The devastating impact of the US-led global financial catastrophe is taking a heavy toll on the rest of the world and with it, asset and equity values have taken a severe beating. The wealth destruction has significantly weakened consumers’ confidence.

With any economic crisis, the GDP growth of a nation will be adversely affected. Furthering to this, the rate of unemployment is expected to increase due to the closing down of businesses and spiraling profits. In Malaysia, notwithstanding the fact that the country is experiencing a slower effect of the crisis, Malaysia is not exempted from the impact of the global recession. It was reported that in Malaysia 26,000 jobs were lost since the global financial crisis blew up in September 2008 and nearly twice as many workers could lose their job in 2009 as struggling manufacturers cut output (The Star, 18 March, 2009, p.7). Flagging demand for electronic products, which accounted for 40% of Malaysia’s exports has led several companies such as Flextronics International, Western Digital, Intel Corp and Panasonic Corp to announce job cuts.

Furthering to the deepening of the worldwide calamity, it was also reported that the consumer price index (CPI) for January 2009 shows an upward trend compared to January 2008 due to the increase in food and fuel prices. The CPI recorded a rise of 3.9% with food and non-alcoholic beverages up 9.8% and housing, water, electricity, gas and other fuels up 1.7% (Ng 2009). Together, these two groups accounted for 89.2% of the overall increase recorded for the month of January 2009. The impact of the slowing down of the economy and higher inflation rate on essentials goods will undoubtedly affect consumer purchasing power and habits. With the economic uncertainties coupled with higher cost of living, consumers therefore will be more cautious in their spending. Some might even resorted to unethical behaviour when purchasing goods and services.

The main objective of this research therefore is to examine and analyse consumer ethical beliefs and intention in the Malaysian context. This paper attempts to develop a conceptual framework for identifying antecedents that influence the ethical beliefs and intention of young Malaysian consumers. Although there are many factors influencing consumers’ ethical behaviour, it is still not clear how these factors affect ethical beliefs and intention especially in the Malaysian context. Young consumers will be the focal point of the study as this group is growing rapidly and has been the target of many marketing and promotional efforts. Lewis and Bingham (1991) classified young consumers as youths between the ages of 15 to 24 years old.  With the siege of advertising, direct marketing, e-commerce and recently mobile marketing, it has made decision-making among young consumers more complex. Furthermore advertising, personal selling, pricing, marketing research and international marketing have been subjected to frequent ethical controversy (Murphy & Laczniak 1981), as many questionable practices have been uncovered over the years. Another reason for the emphasis on young consumers is that many of them would one day become future corporate leaders.  Understanding the factors that contributes to the ethical beliefs and intention of this group of consumers would certainly assist policy makers in formulating guidelines that will address the ethical problems.  

Research Problem

In 2004, a US Senate Committee revealed that the World Bank has lost about US$100bil slated for development in the world’s poorest nations to corruption since 1946, nearly 20% of its total lending portfolio (Gnanalingam 2009). Corruption has become a global issue as developing countries; watchdog groups and some economists complain that poor nations lose huge funds from multilateral development banks like the World Bank because of misuse of money. The spread of corruption, incompetence, malpractices, abuse of power, fraud and other unethical behaviour have been attributed to the alarming decline in integrity in the private sector, especially among individuals and organizations at large. The case of Enron in America and Satyam in India are some examples of widespread accounting fraud. The latter is tagged as India’s biggest corporate scandal in history.

The number of young Malaysian consumers has been increasing. In 2003, it was estimated that 43% of the country’s 25 million people falls into the category of less that 20 years old (PricewaterhouseCoopers 2004). As Malaysia moves towards modern economy, the growing affluence and potential declining moral and religious standards, especially in urban areas contributes to the shaping of the ethical orientation of these young consumers.  One issue that would be interesting to explore is the ethical stance of the new generation of consumers on their acceptance of ethical and potentially unethical situations.  Are they more accepting to unethical behaviours or are they less tolerant to unethical behaviours?

The proposed research will look at the category of ‘consumer ethics’ especially among young Malaysian consumers. In their research on consumer behaviours, Cowe and Williams (2001) found that many young consumers are yet to be set in their purchase behavioural patterns. Therefore it is important that consumer ethics research be conducted especially among young consumers as knowing the ethical orientation of this group of consumers will provide researchers and policy makers the means of addressing ethical issues early, while they are still receptive and impressionable.

Importance of the Study

Ethical issues involving consumers are as important as other marketing and advertising practices due to the fact that these issues are major partaker in a market interaction.  Consumers are the major contributors in the business process and not considering them in ethics research may result in an incomplete understanding of this process. An understanding of why some consumers engage in an unethical behaviour may be helpful in ultimately curtailing such practices. As Bernstein (1985, p. 24) pointed out, consumers are ‘out-doing big business and the government at unethical behaviour’. Hence, it is pertinent to study consumer behaviour in ethics research so as to gain a complete understanding of ethical issues in the marketplace (Vitell 2003).  

Join now!

LITERATURE REVIEW

The study of ethical consumer behaviour can be categorised into two groups: ‘ethical consumerism’ and ‘consumer ethics’. According to Harper and Makatouni (2002, p. 289), being an ethical consumer means ‘buying products which are not harmful to the environment and society’. Shaw and Clarke (1998, p. 163) refer to ethical consumption as ‘the degree to which consumers prioritize their own ethical concerns when making product choices’. In the nutshell, ethical consumerism therefore relates to environmental and social concern in consumption-related activities (e.g. recycling, buying fairly traded products, charitable giving and market place activism such as boycotting).

...

This is a preview of the whole essay