Unethical Pro-Organisational Behaviour from a Consumer’s Perspective

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Unethical Pro-Organisational Behaviour from a

Consumer’s Perspective

Dual Master Dissertation

By

Martijn Stout University of Groningen

MSc Advanced International Business Management Student number: 1918583

Supervisor: Sjoerd Beugelsdijk Newcastle University Business School

MSc Advanced International Business Management & Marketing Student number: 140674624

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Abstract

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Acknowledgements

This paper marks the completion of my academic career. I can gladly look back at this period of my life and look forward to what will come. This accomplishment was not possible without some helping hands, therefore there are some people I would like to thank. Firstly and most importantly, I would like to thank Jonathan Kimmitt, Newcastle University Business School, and Sjoerd Beugelsdijk, Rijksuniversiteit Groningen, for their constant support and feedback. The content and pace of their feedback was of great value to me and for that I am deeply thankful. Then, a big thank you to my family that have supported me in many ways. Finally, I would like to thank all my friends, foreign and domestic, for the amazing time I have had with them. This dissertation was a great challenge, nonetheless I am very pleased with the result. I believe I created something interesting to read and that it will encourage future research of this topic.

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1. Introduction

1.1 Introduction

This first chapter contains the following aspects. Firstly, the background of the research is explained and the reasoning as well as the motivation behind it is discussed. Then, a more extensive elaboration of the research focus follows. This focus is summarized in the research aim and objectives. Finally, the research structure and design further explain how the rest of the paper is constructed.

1.2 Background

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morally wrong, there still is an on-going debate, if this type of behaviour will have more positive or harmful outcomes for the firms in question and its stakeholders. These intertwined mixed feelings of seeking corporate success and doing what is right, is a very interesting process that management have to face these days. The focus of this study is to shed light to this debate by approaching it from a different perspective. It investigates one specific stakeholder, namely the consumer. Vitell (2003) states that only 5% of ethics-related researches have consumers as its primary focus, which shows the importance and necessity of this research.

1.3 Research focus

This research is viewed from a consumer’s perspective by researching their opinion and behaviour towards unethical pro-organisational behaviour. In this study, the consumers’ opinion stands for the perception of harm the consumers experience from unethical pro-organisational behaviour, which is referred to as ethical judgment. Consumers’ behaviour is tantamount to their purchase intention in this study. Existing literature has established a relationship of ethical judgment on purchase intention in unethical situations. This study builds on these findings, but with different boundary conditions, namely unethical pro-organisational behaviour. In addition, this relationship is exposed to the moderating effect of brand attachment. This type of relationship has not yet been tested. The importance of strong brands have been emphasized by many in academic and business communities, therefore it is believed to be of great value for this study. Subsequently, the origin of ethical judgment is explained by studying the effect of consumers’ social responsibility.

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this body of literature. There is still very little research around the differences between foreign and domestic firms in this context. This study is first to explore differences of foreign and domestic corporate social responsiveness and it creates new assumptions. What this means is that corporations that are involved in unethical pro-organisational behaviour should respond to it appropriately in order to decrease collateral damage that comes with it. This is conducted by means of existing response models.

1.4 Overall research aim and individual research objectives

A short summary of the previous part is made to clearly state the aim and objectives of this research. This study provides an answer to how consumers react to unethical firm behaviour in terms of how they perceive this firm’s behaviour and what that means for the actual purchase intention. The independent variables consumers’ social responsibility and brand attachment are analysed. More specifically, an analysis how consumers’ social responsibility affects ethical judgment and how brand attachment moderates the relationship of ethical judgment on purchase intention is conducted. Finally, the differences in foreign and domestic firms are discussed in terms of corporate social responsiveness. As a result , the following research aim can be formulated:

This research wants to establish how consumers react to unethical pro-organisational behaviour.

This is achieved by means of the following research objectives:

1. How does consumers’ ethical judgment affect their purchase intention? 2. How does consumers’ social responsibility affect ethical judgment?

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4. Can corporate social responsiveness positively affect purchase intention after pro-organisational behaviour has taken place?

1.5 Research design

The research objectives are answered by means of the following methods. The theory is based on a profound evaluation of the existing literature and it is foundation for this research. This evaluation provides clear descriptions of key terms and relationships for related to this research. These relationships were analysed with multiple tests by means of the program SPSS Statistics. The required data was collected by means of an online survey composed of models, items and scenarios from previous research. Based on the outcome of the survey, conclusions were drawn and recommendations made.

1.6 Structure of research

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2. Literature review

In this chapter a profound evaluation of the literature is provided. It thoroughly discussed the meaning of unethical pro-organisational behaviour and how it differs from other business ethics. It then shows how the relationship of ethical judgment and purchase intention is related to pro-organisational behaviour. The use of ethical-consumers brings clarification to this relationship. Then, the variables that are tested on this relationship are elaborated upon. Consumers’ social responsibility brings more light to the origin of ethical judgment. The effects of brand attachment and corporate social responsiveness are discussed as well. Corporate social responsiveness is viewed from domestic and foreign perspective. Based on this literature, hypotheses and a conceptual model were created. These give an orderly view of the aim and objectives of this research.

2.2 Unethical pro-organisational behaviour

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employees who behave unethically towards the company itself and its other employees. This can range from incidents like misuse of working time, sexual harassment, bullying or stealing from the company and can be led by different motives. Employees can behave unethically for their own advantage (Greenberg, 2002), out of spite to damage the firm they work for (Skarlicki & Folger, 1997) or just to harm other employees (Thau et al., 2007). Unethical conducts can range from minor incidents to substantial misconduct that results in complications for the employees and the organization. Probably the most well known unethical conduct is that of mega-companies like Wal-Mart and Nike, which achieved greater profits by contracting with sweatshops to produce some of their products. These sweatshops have inhumane work environments and exploit the poverty of certain parts of the world (Sacco, 2002).

The purpose of this research is to study the external unethical behaviour side of organizations. This type of unethical behaviour is coming from within the company, but stakeholders outside of the company are influenced by it as well. The motivation behind this behaviour can come from negative reasons stated above, which are meant for harmful purposes by those who initiated the unethical conduct. A more reasonable motive to act unethically is that it for benefit of the organisation. Umphress et al. (2010) called this unethical pro-organisational behaviour. This term means that this behaviour violates norms and values that are global standards in terms of justice, law and society (Donaldson & Dunfee, 1994), yet it benefits the company.

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A great amount of research has been conducted on unethical behaviour, but much debate still surrounds this topic. There are a few main streams in the literature of unethical firm behaviour, which are elaborated here to better identify the position of this research. The first stream focuses on how unethical business behaviour can be prevented. This can go all the way back to the roots of management, namely the business schools. Ethics should have a much larger influence in educating the next generation of managers. They should understand ethics in much more detail, because they will have to face making these decisions (Beggs & Dean, 2007; Floyd et al., 2013; Gioia, 2002; Howard et al., 2011; Sims & Sauser, 2011).

The second stream resolves around the origin of unethical behaviour. As an example, Cojuharenco et al. (2012) researched how self-construal dimensions correlate with unethical behaviour. They suggested the types of behaviour that could lead to unethical conduct. Like Cojuharenco et al. (2012), there are many others that try to find an answer to what type of person would get involved in unethical behaviour and what would be the reason behind it(Dubois et al., 2015; Kong, 2016; Pierce & Snyder, 2015; Tang et al., 2008). Some researches argue reasons based on psychology, yet others emphasize financial motivations for unethical behaviour. For instance, Baron et al. (2015) state that moral disengagement can take place as a result of the potential financial gains. The focus of these researches is mostly internal, however, only little research is performed from a consumer perspective (Vitell, 2003). This study puts its focus beyond this point and wants to investigate the opinions of consumers when unethical pro-organisational behaviour already took place, which brings us to the final important literature stream.

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can be advantageous for the company. Management that considers this conduct weigh the potential financial gains against the possible risk of the unethical firm behaviour being discovered by the public. Butner (2010) classifies it as the probability of a risk event to occur and the impact this event will have. For this research the probability of exposure is not very relevant, because it examines the later phase of unethical behaviour. However, impact of the event is researched in this study from a consumers’ perspective. Unethical firm behaviour can also induce responses internally within the company and externally by other stakeholders. Some research is done about corporate responses and some models are created for this decision-making process (Bradford & Garrett, 1995; Davis & Blomstrom, 1975; McAdams, 1973; Wilson, 1975). These models are mostly tested from an internal managerial perspective, however very little research has been done concerning what other external stakeholders think of these decisions when responding to unethical firm conduct. This research wants to fill this gap by considering the consumers’ point of view and study their opinions as new boundary conditions. The literature around unethical behaviour is abundant. To better demonstrate the position of this research and the gaps it wants to fill, the literature around the variables is further explained in the context of unethical pro-organisational behaviour.

2.3 Ethical judgement and purchase intention

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1975), also known as ethical consumerism (Bucic et al., 2012). There are studies stating that this stream is growing (Berry & McEachern, 2005). Carrigan and Attalla (2001) researched that ethical firms attract more consumers and that unethical behaviour will result in consumer boycott. Companies even adjust their marketing strategy showing their ethics to the consumers, with the underlying reason to increase their financial position (Elliott & Freeman 2001). Others that discuss the possible negative effects on consumers by firms that behaves unethically, such as consumer outrage (Lindenmeier et al., 2012; Makarem & Jae, 2016).

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This type of behaviour refers to the probability that a consumer will make a purchase (Dodds et al., 1991). For the purpose of this study, this means that consumers remain willing to buy a product of a company that is involved in unethical conduct. Thus, consumers with a high level of purchase intention are more willing to buy the product or service from a company that is involved in unethical behaviour as opposed to consumers with low level of purchase intention that are less willing to buy a product or services of a firm that behaved unethically than before. Following the model of Jones (1991), this study analyses the effect that the independent variable ethical judgment has on the dependent variable purchase intention. According to the traditional literature (Berry & McEachern, 2005; Bucic et al., 2012; Carrigan & Attalla, 2001; Patrick et al., 2003; Wang, 2008; Webster, 1975), this relationship should have a negative correlation. This means that a higher level of ethical judgment will have a lower level of purchase intention. This is the basic principle for this research as well.

2.4 Consumers’ social responsibility

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before they are introduced to unethical pro-organisational behaviour. This is examined in order to search for a possible correlation between the consumer’s individual social responsibility and their judgement of the unethical pro-organisational behaviour. A high level of consumers’ social responsibility stands for a high degree of moral/ethical principles and standards of an individual. In spite of the doubts of certain researchers (Bray et al., 2011; Carrington et al., 2010; De Pelsmacker et al., 2005), this research expects the following outcome. In line with literature (Muncy & Vitell, 1992), consumers with a high level of social responsibility are correlating with a high level of ethical judgment, thus exemplifying a positive relationship. The variables ethical judgment, purchase intention and consumers’ social responsibility together analyse the existence of the so-called ethical consumers and clear any inconsistencies in the existing literature.

2.5 Brand attachment

Brand attachment is often described as the degree of loyalty the customer has towards a brand (Keller, 2013). Many researchers studied the relationship of brand attachment on consumers and agree that it is an important component of marketing (Fedorikhin et al., 2008; Keller, 2013; Park et al., 2010; Thomson, 2006). If a strong form of attachment is achieved, the consumer’s resistance to change and tolerance of bad news, like product or service failure, can be reduced (Keller, 2013). This is very interesting for the corporate world as many firms, like Apple, profit substantially from this phenomenon. In the literature brand attachment has been researched in many different ways. One stream of brand attachment research focuses on the creation of brand attachment. Yao et al. (2015) researched how similarity of consumers and brand personalities can have on influence on emotional brand attachment. Dunn and Hoegg (2014) incorporated the factor of fear in the creation process of brand attachment.

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with the brand (Escalas & Bettman, 2005; Lastovicka & Sirianni, 2011; Park et al., 2010; Thomson et al., 2005). This research wants to contribute to this stream, but is taking it a step further. It does not look at the building process of the brand attachment, but it tests the strength of brand attachment that is already established. This study answers the question how brand attachment, as an independent variable, affects the consumers’ thoughts on unethical pro-organisational behaviour. This research builds on the work of Schmalz and Orth (2012). Their research studied how consumers’ judgments of firm ethics can be influenced by brand attachment and the consequences on emotional and behavioural level. They concluded that a higher level of brand attachment correlates with a lower level of consumers’ judgements of unethical behaviour of that brand (Schmalz & Orth, 2012). However, Thomson et al., (2005) state that brand attachment acts as a strong predictor of consumers’ behaviour. They concluded that a higher degree of brand attachment could cause consumers to spend substantially more resources, like money and time for that brand. In other words, brand attachment positively affects purchase intention. This study looks further than the work of Schmalz and Orth (2012) and includes purchase intention in the model. Combining both findings in one study makes an addition to the existing mechanism in the literature. To summarize this, brand attachment affects ethical judgment negatively and purchase intention positively. Therefore, a moderating analyse tests the variable brand attachment as follows. Brand attachment negatively affects the negative relationship of ethical judgment on purchase intention. In other words, brand attachment reduces the effect ethical judgment has on purchase intention.

2.6 Corporate social responsiveness

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long-term societal interests against short-long-term financial goals (Corbett, 2008). With climate change and other world problems societies expect of firms that they become part of the solution, instead of the problem. This research focuses on a similar, yet less known term, namely corporate social responsiveness. This concept refers to the capacity and processes of a firm’s response to social pressures (Frederick, 1994; Norris & O’Dwyer, 2004). The difference in these two concepts is that corporate social responsibility focuses on a corporate approach for future business activities. The main focus of this study is to find an answer to how consumers react to unethical firm behaviour and therefore corporate social responsiveness is more relevant. In terms of unethical pro-organisational behaviour, this research inserts the independent variable how management should respond.

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responsiveness a step further. It compares foreign and domestic corporate social responsiveness with each other. This will now be further explained.

2.7 Foreign and domestic firms

Internationalization and globalisation are two common terms nowadays. Companies from every part of the world are competing with each other in world’s markets for customers, resources, talent and intellectual capital (Hollensen, 2014). Thus, domestic firms and firms from abroad are competing for the same market. This study wants to find if there are differences in corporate social responsiveness model of Davis and Blomstrom (1975) between foreign and domestic firms after unethical behaviour occurs. Much research has been done on how the country of origin may affect consumer’s decision-making process (Elliott & Cameron, 1994; Ghalandari & Norouzi, 2012; Godey et al., 2012; Rezvani et al., 2012). Lantz and Loeb (1996) state that the purchase intention can be affected equally or sometimes to a greater extent by producers’ country of origin than by the level of quality and price. This phenomenon is described as consumer ethnocentrism. Consumer ethnocentrism is the tendency of an individual to prefer products that are made in the home country of that individual compared to products that are made abroad (Huddleston et al., 2001). Yet this stream tells very little about the effect this phenomenon may have on firms that are involved in unethical conduct and this research fills that gap.

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should be done around the business-business relationship and that is where this study wants to pick up.

Combining these findings gives the following research direction. De Bock et al. (2012) state that a closer relationship may cause a higher level of tolerance in their judgment process when a person or company behaves unethically and Huddleston et al. (2001) state that domestic products are being favoured compared to foreign products in the purchase process. Building on the combination of these findings, the expected outcome is that consumers have a higher tolerance level for domestic firms that behave unethically and therefore domestic corporate social responsiveness has a greater positive effect on purchase intention, than foreign corporate social responsiveness.

2.8 Hypotheses and conceptual model

This section provides the hypotheses and conceptual model related to this research. The focus is how consumers respond to unethical pro-organisational behaviour. The main subject of this study is how the consumers’ level of ethical judgment affects the level of purchase intention. According to literature (Berry & McEachern, 2005; Bucic et al., 2012; Carrigan & Attalla, 2001; Patrick et al., 2003; Wang, 2008; Webster, 1975), this will have a negative effect. Thus, this gives the following hypothesis

H1: The independent variable ethical judgement has a negative effect on the dependent variable purchase intention.

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H2. The independent variable consumers’ social responsibility has a positive effect on the dependent variable ethical judgment.

Secondly, the independent variable brand attachment is tested. Based on a combination of previous literature (Schmalz & Orth, 2012; Thomson et al., 2005), the moderating effect of brand attachment is tested on the relationship of hypothesis 1, which is the effect ethical judgment has on purchase intention.

H3. The independent variable brand attachment has a negative moderating effect on the influence ethical judgment has on purchase intention.

Finally the effect of corporate social responsiveness after unethical behaviour is researched. According to the model of Davis and Blomstrom (1975) companies can respond in this situation as followed: withdrawal, public relations approach, legal approach, bargaining and problem solving. Based on previous literature (Lin et al., 2011), corporate social responsiveness has a positive effect on purchase intention. This relationship is tested on three different levels. Firstly, the effect of corporate social responsiveness is tested on purchase intention. Secondly, the ten different types of corporate social responsiveness are tested separately, which are the responses of Davis and Blomstrom’s (1975) model for foreign (5) and domestic (5) firms. Finally, one hypothesis tests the difference between the effect of foreign and domestic corporate social responsiveness on purchase intention.

H4a. The independent variable corporate social responsiveness has a positive effect on the dependent variable purchase intention.

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H4c. The effect of domestic corporate social responsiveness on purchase intention is greater than the effect of foreign corporate social responsiveness.

These hypotheses are summarized in the following conceptual model.

2.9 Conclusion

This chapter provided the overview literature behind the variables and the hypotheses related to this research. It showed that unethical pro-organisational behaviour is analysed, by means of ethical judgment and purchase intention and the independent variables. These hypotheses are clearly stated in the conceptual model. The following chapter explains the methodology of the study.

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3. Methodology

This chapter discusses the following components. Firstly, the method of data collection is discussed, which include the choice of using an online survey and target population. Secondly, the origins of the items used for the survey are clarified. The corresponding literature is provided and is also summarized in table 1. This chapter also justifies validity and reliability of the research. Then, the selections of tests for every hypothesis are elaborated. This provides reasoning behind the selection as well. Finally, ethical considerations related to this research are stated.

3.2 Collection method

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3.3 Primary data collection

The survey is based on existing literature. Table 1 below shows the sources of the different parts of the survey and that will now be further elaborated on. All items used for this research can be found in the survey (appendix 1). The first part consists of age and gender as the control variables. Secondly, the independent variable consumers’ social responsibility was measured as followed. Samavatyan et al. (2014) researched this topic and created a survey to establish an ethical profile. This list was shortened to prevent the survey for this research from becoming too long. Participants tend to not complete surveys that are too long and therefore keeping the survey brief increases feasibility for the research (Sarstedt & Mooi, 2014). Twelve items with showed high correlations to consumers’ social responsibility, according to Samavatyan et al. (2014), were selected for this survey.

Hypothesis 1, 2 and 4 were studied by means of two scenarios. A third scenario tested the independent variable brand attachment on the relationship of ethical judgment on purchase intention (Hypothesis 3). These scenarios provide information about unethical pro-organisational behaviour situations. Compared to standard questions, scenarios can provide a higher quality of collected data (Alexander & Becker, 1978). Due to more detail and background information (Cavanagh & Fritzsche, 1985), scenarios have a better control over the stimuli of the participant and therefore a higher internal validity (Rittenburg & Valentine, 2002). Reidenbach and Robin (1988) also used scenarios in their

Table 1. Sources of survey items

Source:

1. Consumers' social responsibility Samavatyan et al. (2014)

2. Scenarios Tsalikis (2015)

3. Ethical judgment Reidenbach & Robin (1990)

4. Purchase intention Summers et al. (2006); Das (2014)

5. Corporate social responsiveness Davis & Blomstrom (1975)

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survey. The scenarios used were in a car mechanic, retail and sales context. They are not suitable for this study and, therefore, other scenarios have been used. Tsalikis (2015) researched business ethics and tested ten unethical business scenarios. The scenarios were rated based on a level of ethical judgment. Three of these scenarios were used for this survey. For this research it was required that the scenarios had similar features and similar magnitude of ethical judgment. Based on the findings of Tsalikis (2015) about ethical judgment, scenarios were chosen that complied with these requirements. The similarity decreases the possibility of additional undesirable effects and makes it possible to test the variable for this research instead. All three included marketing related unethical pro-organisational behaviour, which showed similar levels of ethical judgment.

Reidenbach and Robin (1988) created a model that can measure the ethical judgment of an individual regarding business ethics in more detail. A set of 33 items measures their ethical judgment. Later on, they reduced the amount of items from 33 to eight (Reidenbach & Robin, 1990). These items measure the ethical judgment on three different dimensions: moral equity, relativism, and contractualism. This model has also been used and tested by other researchers (Cohen et al., 1998; Loo, 2004; Reidenbach et al., 1991), which increases its reliability. Therefore, the method of this model is employed. Since ethical judgment is just a part of this research, the model of Reidenbach and Robin (1990) with eight items is used to avoid a too lengthy survey, hence increasing feasibility.

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does not correlated with the others. Then, this item could be removed from the analysis and still reliable results could be generated.

This research discusses the potential difference of domestic and foreign firms. One scenario was slightly modified to an unethical behaviour of a foreign firm and another scenario includes a domestic firm. Both scenarios described firms from the fast-food industry. The domestic scenario describes unethical pro-organisational behaviour of a Dutch snack bar chain and the foreign scenario is about a pizza chain from the United States. No brands were included here, to ensure the measurements were not affected by that variable. The participants were asked to give their opinion of corporate social responsiveness. The suggested responses of Davis and Blomstrom (1975) were presented, namely withdrawal, public relations approach, legal approach, bargaining and problem solving. They were asked how much these corporate responses could influence their intention to purchase of that firm. These items consisted out of one or two words and were used in sentences to increase clarification for the participants. Like all other questions, the 7 item-Likert scale was applied to retrieve the participants’ opinion.

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Before the survey went online, a small panel of eight people performed a pre-test, to ensure no mistakes were present. Based on their feedback the following minor changes were made. Firstly, the survey felt a bit too long. Two items related to consumers’ social responsibility were not completely understandable. For these two reasons, those two items were removed from the survey. Similar feedback was provided for items related to ethical judgment and brand attachment. Two items of ethical judgment and three items of brand attachment were removed from the survey. Finally, the items of corporate social responsiveness were adjusted. The comprehensiveness of these items was established. No further changes were made.

3.4 Test selection

This research used regression analyses to test the hypotheses 1, 2 and 3. These hypotheses are analysing if there is a significant relationship between dependent and independent variables. Regression analysis can provide insights that few other techniques can (Sarstedt & Mooi, 2014). It also can indicate the relative strength of the different independent variables and can make predications. Even if the data of these residuals is ordinal scaled, it can still be used for regression analysis if some assumptions are complied with (Pallant 2010). These are further discussed in chapter 4.3.

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variable consisted of means only. For this reason, other analyses were used. Firstly, a one-sample t-test concluded if the mean of all the ten types of corporate social responsiveness, five foreign and the same five for domestic firms, have a significant impact on purchase intention. Secondly, these ten types were tested separately about their effect on purchase intention also with the one-sample t-test. Finally, a paired-samples t-test determined if there is a significant difference between the effect of corporate social responsiveness on purchase intention between foreign and domestic firms.

3.5 Ethical consideration

This research was using participants as a source for its primary data collection, therefore ethical considerations were required. These considerations were discussed and submitted to the Newcastle University Business School and finally approved. The survey complied with the ethical standards of the Newcastle University Business School. Then, the online survey started with a notification. This explained the results were completely anonymous and no personal information would be asked or tracked.

3.6 Conclusion

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4. Results

The results of the data collection are presented in this chapter. Firstly, the data was screened for any undesired errors. Then, preliminary data analysis briefly describes the data. This part also accounts for the combination of items into variables, based on factor analysis, correlation and Cronbach’s Alpha. Further data analyses tested the control variables on the dependent variables. Subsequently, the correlations of the independent and dependent variables were tested together with the assumptions that are required for the different tests. Finally, based on the results the hypotheses were accepted or rejected.

4.2 Screening and cleaning the data

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4.3 Preliminary data analysis

After eliminating the errors in the data, the descriptive statistics can follow. The dataset consist of 73 males and 47 females, with a mean age of 32,56 (Appendix 2). The remaining items in the survey were all tested with the 7 item-Likert scale. The means diverge from 3,1 to 5,83 and the corresponding standard deviations diverge from 1,157 to 1,82. Before further analyses could take place, some data had to be transformed. Two out of three questions regarding the variable purchase intention, (Appendix 2: No 4.2, 4.3, 7.2, 7.3, 11.2, 11.3), were asked in inverted manner to increase validity. The questions related with the ethical judgment (Appendix 2: No 3.1-3.6, 6.1-6.6, 10.1-10.6) were asked as Reidenbach and Robin (1990) stated. To correspond the values with the direction of the hypotheses these items had to be reversed. This was done before further testing was applied. No further adjustments were made.

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intention (brand). This item showed high correlation in an incorrect group, therefore was removed from the dataset.

Subsequently, The correlation and Cronbach’s Alpha were applied for this measurement to test the reliability (Leliveld & Hillemans, 2012). Per variable group a correlation analysis was applied. Apart from corporate social responsiveness, all items did significantly correlate in their variable group (p = 0,00). The Cronbach’s Alpha, presented in Appendix 2, shows similar results. Apart from corporate social responsiveness, all Cronbach’s Alphas exceed the minimum of 0,7 (Sarstedt & Mooi, 2014). Nonetheless, for hypothesis 4a a combined effect of corporate social responsiveness is needed. Combining the ten items related to corporate social responsiveness provided a Cronbach’s Alpha of 0,79 and therefore is used. After combining the items, the correlation of the variables could be tested. The structure of the survey enabled to separate the independent variables consumers’ social responsibility and corporate social responsiveness from brand attachment. The results of the first two scenarios (foreign and domestic) test hypotheses 1, 2 and 4. The final scenario (brand) purposes the results for hypothesis 3.

4.4 Further data analyses

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therefore age does not affect any of the dependent variables. Based on these findings, the control variables did not affect the research and therefore have not been included in the analyses for the hypotheses testing.

This research is using regression analyses to test the hypotheses 1, 2 and 3. Even if the data of these residuals is ordinal scaled, it can still be used for regression analysis if the following assumptions are complied with (Pallant, 2010). Some of these assumptions have already been discussed and are considered sufficient, these are sample size and outliers. Then the residuals should not show signs of multicollinearity. This occurs when two variables are highly correlated (r = > 0,9) (Pallant, 2010). Table 2 shows the correlation of all variables and none of their correlation exceeds this limit. The VIF (variance inflation factor), in appendix 6, is an additional measurement and these values confirm that there is now multicollinearity (VIF = > 10). Another assumption is that the residuals should be normally distributed. The normal probability plot (P-P) is an appropriate measurement for examining this assumption (Pallant, 2010). Appendix 5 shows the P-P plot per residual. The P-P plots all show a reasonably straight diagonal line from bottom left to top right, which suggest a normal distribution. Finally the independence of the observations should be ensured. Since the participants filled it the survey online and were not able to communicate or influence another, this independence can be assumed.

Table 2 Overview of variable correlations

1 2 3 4 5 6

1. Consumers' social Pearson Correlation 1

responsibility Sig. (2-tailed)

2. Ethical judgment Pearson Correlation ,517** 1

(without brand) Sig. (2-tailed) 0

3. Purchase intention Pearson Correlation -,471** -,620** 1

(without brand) Sig. (2-tailed) 0 0

4. Brand attachment Pearson Correlation 0,039 0,068 -0,08 1 Sig. (2-tailed) 0,671 0,463 0,384 5. Ethical judgment Pearson Correlation 0,171 ,544** -,289** -,303** 1

(with brand) Sig. (2-tailed) 0,062 0 0,001 0,001

6. Purchase intention Pearson Correlation -0,004 -0,087 0,097 ,505** -,426** 1

(with brand) Sig. (2-tailed) 0,965 0,346 0,294 0 0

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Figure 1

Then, the hypothesis that tests the independent variable corporate social responsiveness on the dependent variable purchase intention was examined. This hypothesis was tested on multiple levels with use of the one-sample t-test and paired-samples t-test. Figure 1 shows the means of all ten types of corporate social responsiveness. According to Laerd Statistics (2016), the following assumptions should be checked. The normality was already assumed. Another assumption for both tests is that there is no presence of outliers and the observations are independent, which were also concluded. Then, for paired-samples t-test require that the same participants are present in both groups, which can be assumed because individuals give their opinion for both foreign and domestic companies.

4.5 Hypotheses testing

The outcomes of the SPSS Statistics analyses per hypothesis can be found in Appendix 6. For hypothesis 1, a regression analysis was used to assess the independent variable ethical

5,83 4,88 4,61 _4,48 3,55 5,75 5,21 4,63 4,43 3,63 1 4 7

Problem solving Bargaining Public relations Withdrawal Legal

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judgment to predict the dependent variable purchase intention. ANOVA indicated a statistical significance level (p < 0,0005), which concludes that the results were unlikely to have happened by chance. The total variance explained by this model was 38,4%, F (1,118) = 73,55, p < 0.001. The independent variable explains 38,4% in the variance of purchase intention, which is a respectable result. The Beta also shows a remarkable result (beta = -0,62, p < 0,001). The Beta is negative, which suggests a negative relationship. Based on these results hypothesis 1 is accepted.

A regression analysis was used also used for hypothesis 2. This model assesses the independent variable consumers’ social responsibility to predict the dependent variable ethical judgment. Again, ANOVA indicated a statistical significance level (p < 0,0005). The total variance explained by this model was 26,2%, F (1,118) = 43,16, p < 0.001. The independent variable explains 26,2% in the variance of ethical judgment. The Beta implies a positive relationship in this model (beta = 0,52, p < 0,001). Hence, hypothesis 2 is accepted.

For hypothesis 3, a multi regression analysis measured the same relationship as hypothesis 1, but with the insertion of the moderating variable brand attachment to the equation. Hence, gives ethical judgment as the independent variable, purchase intention as the dependent variable and brand attachment as the moderator. ANOVA indicates a statistical significant result for this model (p < 0,0005). The total variance explained by this model was 33,7%, F (3,116) = 19,66, p < 0.001. The independent variables explain 33,7% in the variance of purchase intention. In this model, the beta of ethical judgment still shows a significant negative relationship (beta = -0,297, p = 0,001). The beta of brand attachment shows a significant positive relationship with the dependent variable (beta = 0,41, p < 0,001). Then, the effect of brand attachment as the moderator shows insignificant results. The beta shows that the moderator in this model almost has no effect on the relationship and does not generate a significant result (beta = -0,012, p = 0,89). Thus, hypothesis 3 is rejected.

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purchase intention (hypothesis 4a). This test wants to demonstrate a positive effect on the dependent variable and is therefore a directional hypothesis. In the survey the value 4.0 stood for no difference in the purchase intention and below that values was a negative effect, thus this test analysed if there is a significant higher value than 4 (µ > 4,0). First, the results of all corporate social responsiveness combined are discussed. Subsequently, individual corporate social responsiveness types for domestic and foreign are appraised. The mean purchase intention score after corporate social responsiveness was introduced (4,7 ± 0,77) was higher than the purchase intention score of 4,0 before corporate social responsiveness was introduced, a statistically significant difference of 0,7 (95% CI, 0,84 to 0,56), t (199) = 9,957, p < 0,0005). Hence, hypothesis 4a is accepted.

Then, the types of corporate social responsiveness were tested separately. Ranked from most to least effect on purchase intention, these types showed significant positive results: Problem solving, bargaining, public relations and withdrawal. Their values are shown in figure 1. Legal approach showed significant negative effect on purchase intention and is therefore further elaborated. The mean purchase intention score after foreign legal response was suggested (3,55 ± 0,107) was lower than the purchase intention score of 4,0 before the legal response was introduced, a statistically significant difference of 0,45 (95% CI, -0,17 to -0,73), t (199) = -3,159, p = 0,002). The mean purchase intention score after domestic legal response was suggested (3,63 ± 0,141) was lower than the purchase intention score of 4,0 before the legal response was introduced, a statistically significant difference of 0,37 (95% CI, -0,09 to -0,65), t (199) = -2,592 p = 0,011). With respect to the significant differences of the effect the types of corporate social responsiveness have on purchase intention, hypothesis 4b is accepted.

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and domestic: 5,21 ± 1,29, p = 0,008); it showed that domestic companies that responds with bargaining increases the purchase intention by 0,33 more than foreign firms that responds the same. All other types of responses had insignificant results (p > 0,01), which indicated no significant difference regarding companies’ origin. Still, bargaining showed a significant difference in favour for domestic corporate social responsiveness, thus hypothesis 4c is accepted

4.6 Conclusion

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5. Discussion

The overall aim of this research was to study the effect that unethical pro-organisational behaviour has on consumers in particular. This influence was studied by means of the following variables: ethical judgment, purchase intention, consumers’ social responsibility, brand attachment and corporate social responsiveness. This chapter revisits the research objectives, summarize the findings of this study and provides conclusions based on these findings and previous literature. Subsequently, the implications, limitations and recommendations for future research will be discussed.

5.2 Discussion of the results

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To understand ethical judgement to a greater degree, the effect of consumers’ social responsibility was tested. According to the literature, a grasp of the moral principles and standards is needed first, before explaining their behaviour. The relationship of corporate ethics and consumers’ social responsibility has not yet been fully explained and is under-theorized (Caruana & Chatzidakis, 2014). The findings regarding this topic contribute to this gap, as a significant relationship is found. Consumers’ social responsibility positively affects their ethical judgment regarding unethical pro-organisational behaviour. Surprisingly, an additional correlation was found between consumers’ social responsibility and purchase intention. This was excluded from further analysis, because no theoretical reasoning was found for this relationship.

The variable brand attachment was included in this research as well. Previous literature already stated that the tolerance of bad news, like product or service failure, could be reduced with a higher level of brand attachment (Keller, 2013). Schmalz and Orth (2012) incorporated brand attachment in an unethical business situation and concluded that brand attachment negatively affects ethical judgment. However, they excluded the effect brand attachment could have on purchase intention. A moderation analysis tested the effect brand attachment has on the relationship of ethical judgment on purchase intention. The findings support the statements made by Schmalz and Orth (2012), which is that brand attachment has a negative effect on ethical judgment. Additionally, this research found a positive effect of brand attachment has on purchase intention. Even with these findings, no significant moderating effect was found. With respect to the conditions of this study, brand attachment does not influence the effect ethical judgment has on purchase intention. Still, these results demonstrate the benefits a strong brand can generate.

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Davis and Blomstrom (1975) was used as possible responses in unethical situation to see what their effect was on purchase intention. This relationship was tested on three different levels. Firstly, the effect of all responses combined on purchase intention was tested. According to Lin et al. (2011), proper strategic management of crisis could increase purchase intention in situations, like bad publicity. This research complements their findings, by suggesting similar results with different boundary conditions, namely in the context of unethical pro-organisational behaviour. Findings indicate that corporate social responsiveness has a positive effect on purchase intention. This study looked even further and tested the different types of corporate social responsiveness separately. Similar results were found for all types of responses with exception of legal approach. Surprisingly, firms that behave unethically and respond with a legal approach will negatively affect the purchase intention of their consumers.

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5.3 Managerial implications

Management that considers unethical behaviour intended for profits should be fully aware of the possible risks and their magnitude. With respect to the boundary conditions of this study, it can be concluded that ethical consumers do exist. Judgment of unethical behaviour will decrease their purchase intention, which will finally cause a decrease in sales. Organizations should be aware of this before getting involved in unethical pro-organisational behaviour, even if it was meant to enhance the company’s situation. This research emphasizes the importance of a strong brand for firms and what it could mean in these harmful situations. Companies with weaker brands should be more aware of unethical conducts and should put more effort into avoiding it, whereas stronger brands can afford unethical jeopardies. This research shows that stronger brands have a negative effect on ethical judgment and a positive effect on purchase intention. If firms do decide to participate in unethical behaviour and this becomes publicly known, a suitable corporate social responsiveness strategy can reduce the collateral damage. The findings revealed that the wrong type of response could cause a negative effect on purchase intention.

5.4 Theoretical implications

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The ten items used for the consumers’ social responsibility retrieved from Samavatyan et al. (2014) were highly correlated in this research and therefore are recommended for future use if the size of the survey is a limitation, instead of the entire list of 43 items. The variable was able to give a new insight of the origin of ethical judgment. The findings bring corporate ethics and consumers social responsibility closer together by providing a new assumption. Consumers’ social responsibility positively affects their ethical judgment regarding unethical pro-organisational behaviour.

This research confirms the existing assumption from the literature that brand attachment plays an important role for firms in unethical situations. Schmalz and Orth (2012) stated that brand attachment affects ethical judgment, however this research adds that brand attachment also influence purchase intention. This creates a new mechanism for the literature by including both effects of brand attachment in one model.

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5.5 Limitations and recommendations for future research

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focus on finding efficient compositions of these results for optimal effect on purchase intention. In addition, this research was not able to find major differences in foreign and domestic corporate social responsiveness. This may have been caused by not clearly differ in the foreign and domestic firm examples and due to novelty of the relationship, which would require additional research. Still a small significant difference was found and, hopefully, it will encourage researchers to investigate this subject further. Finally, this research made an attempt to study the pro-organisational side of unethical behaviour, which requires much more research. The focus here was based on some variables, however others could also play a role in this model. Hopefully, these findings will inspire other researchers to generate more literature around this topic.

5.6 Conclusion

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7. Appendix

Appendix 1

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Unethical Pro-Organisational Behaviour from a Consumer’s Perspective