The goal of this paper is to examine whether business performance is affected by the adoption of practices included under the term Corporate Social Responsibility (CSR). To achieve this goal, we analyse the relation between CSR and certain accounting indicators and examine whether there exist significant differences in performance indicators between European firms that have adopted CSR and others that have not. The effects of compliance with the requirements of CSR were determined on the basis of firms included in the (...) Dow Jones Sustainability Index (DJSI), and specific accounting indicators were applied to measure performance. For the purposes of this study, we selected one group of firms belonging to the DJSI and another comprised of firms quoted on the Dow Jones Global Index (DJGI) but not on the DJSI. The sample was made up of two groups of 55 firms, studied for the period 1998–2004. Empirical analysis supports the conclusion that differences in performance exist between firms that belong to the DJSI and to the DJGI and that these differences are related to CSR practices. We find that a short-term negative impact on performance is produced. (shrink)

While there is a significant amount of research investigating managerial ethical judgments, a limited amount examines consumer judgments of unethical corporate behavior and its impact on the marketplace. This study examines how consumers' commitment to a company impacts not only their ethical judgment of corporate behavior but also the outcomes of that judgment. The authors test hypotheses with data from 334 consumers and find that consumers' level of commitment attenuates the level of perceived fairness. More specifically, highly committed consumers may (...) forgive companies for behaviors when perceived harm is low, but become progressively dissatisfied as the level of perceived harm increases. Results of the study point to the importance of considering ethical behavior from a consumer perspective. If corporate actions are perceived as unethical, the company stands to lose favor with their most committed customers. Considering that more time, effort and investment is required to gain a new customer as to retain an old, this study shows that engaging in behavior perceived as unethical by consumers risks alienating the most committed customers. (shrink)

This paper researches perceptions of the concept of price fairness in the Dutch coffee market. We distinguish four alternative standards of fair prices based on egalitarian, basic rights, capitalistic and libertarian approaches. We investigate which standards are guiding the perceptions of price fairness of citizens and coffee trade organizations. We find that there is a divergence in views between citizens and key players in the coffee market. Whereas citizens support the concept of fairness derived from the basic rights approach, holding (...) that the price should provide coffee farmers with a minimum level of subsistence, representatives of Dutch coffee traders hold the capitalistic view that the free world market price is fair. (shrink)

Despite the growing number of studies examining consumers' perceptions of unethical corporate and consumer practices, research examining the apparent double standard existing between what consumers perceive as acceptable corporate behaviour and what they believe are acceptable consumer practices remains scarce. Contradictory, double standards are often quoted by other researchers as a major stream in ethical literature.The few studies dealing with this topic as well as this study indicate that people rate corporate unethical actions as less admissible compared to similar consumer (...) misactions. However, little is known about the processes underlying these double standards. This research investigates whether the techniques of neutralization could provide a meaningful way of approaching this phenomenon. Findings indicate that the higher the extent to which people agree with arguments explaining away the misbehaviour instigated by consumers or business, the more they tolerate these questionable consumer and corporate practices. Furthermore and more importantly, these techniques give an answer on the question why people judge business (representatives) more harshly than consumers. More specifically, results show that the same respondents who justify questionable consumer actions to a certain degree, condone the same misbehaviours instigated by business (representatives) to a much lesser extent. In this way, the techniques of neutralization concern a process explaining the double standard phenomenon. (shrink)

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

Customers complain because they want to be treated fairly by the company when a service failure occurs. The role of perceived complaint justice and its relation to customer satisfaction has been discussed and researched. However, a static view is mostly adopted in previous literature. We argue that satisfaction is cumulative and both prior satisfaction and post-recovery satisfaction should be looked at in relation to complaint justice in the context of service recovery. This study attempts to fill the gap by investigating (...) the mediating role of justice in the relationship between prior satisfaction and post-recovery satisfaction (both with the recovery and with the organization) and examining the mediating role of post-recovery satisfaction in the relationship between the dimensions of justice and customer retention. Hypotheses were tested using a sample of 200 customers that had service failure experience at Chinese restaurants in Hong Kong. Justice dimensions (distributive justice, procedural justice, and interactional justice) were found to fully mediate the relationship between prior satisfaction and satisfaction with recovery. All dimensions, except the interactional justice, were also found to be partial mediators in the relationship between prior satisfaction and post-recovery satisfaction with organization. Findings also revealed the mediating roles of two post-recovery satisfaction variables in transferring the justice dimensions into behavioral intention, with the two variables playing almost opposite roles. Discussion and recommendations are provided for future development and improvement in building long-term relationship with customers. (shrink)

The effectiveness of complaint handling and service recovery policies in customer retention has been the focus of both scholars and service organizations. In the past decade, Justice Theory has provided the basis of the dominant theoretical framework for complaint management and service recovery. However, it does not explicitly address unfair trade practices, which constitute an ethical issue. Favorable outcomes in complaint handling may not be able to restore the reputation of a company and the potential harm perceived by consumers. Using (...) face-to-face interviews, this study applies Fairness Theory to explore the psychological responses of consumers in the post-complaint phase, particularly in ethical judgment. The findings suggest that an unfavorable outcome in the post-complaint stage leads to counterfactual thinking by the consumer about the consumer's state of well-being. The complaint must be due to the discretionary actions of the service provider whose accountability is assessed. Those harmful actions are then judged against an ethical standard. Explanations can reduce blame, and their effectiveness is moderated by outcome favorability but not ethical judgment. Favorable outcome, captured by "Would Perception," has only limited influence on Perceived Potential Harm (PPH), which is an important determinant of ethical judgment. This study makes both theoretical and practical contributions. It is the first study to validate Fairness Theory empirically and apply it to complaint handling as a complement of Justice Theory in the information and communication technology (ICT) service context. The study indicates that customers may condemn a service provider because of PPH even though the outcome is favorable. Unfair trade practices are what make customers hate ICT service providers. (shrink)

This paper researches perceptions of the concept of price fairness in the Dutch coffee market. We distinguish four alternative standards of fair prices based on egalitarian, basic rights, capitalistic and libertarian approaches. We investigate which standards are guiding the perceptions of price fairness of citizens and coffee trade organizations. We find that there is a divergence in views between citizens and key players in the coffee market. Whereas citizens support the concept of fairness derived from the basic rights approach, holding (...) that the price should provide coffee farmers with a minimum level of subsistence, representatives of Dutch coffee traders hold the capitalistic view that the free world market price is fair. (shrink)

Ethical concerns of Internet users continue to rise. Accordingly, several scholars have called for systematic empirical research to address these issues. This study examines the conceptualization and measurement of consumers' perceptions regarding the ethics of online retailers (CPEOR). Also, this research represents a first step into the analysis of the relationship between CPEOR, consumers' general Internet expertise and reported positive word of mouth (WOM). Results, from a convenience sample of 357 online shoppers, suggest that CPEOR can be operationalized as a (...) second-order construct composed of four dimensions: security, privacy, fulfillment, and non-deception. Our findings also indicate that consumers' general Internet expertise significantly improves CPEOR and CPEOR are strongly predictive of consumers' WOM. Managerial and research implications are offered. (shrink)

While there is a significant amount of research investigating managerial ethical judgments, a limited amount examines consumer judgments of unethical corporate behavior and its impact on the marketplace. This study examines how consumers’ commitment to a company impacts not only their ethical judgment of corporate behavior but also the outcomes of that judgment. The authors test hypotheses with data from 334 consumers and find that consumers’ level of commitment attenuates the level of perceived fairness. More specifically, highly committed consumers may (...) forgive companies for behaviors when perceived harm is low, but become progressively dissatisfied as the level of perceived harm increases. Results of the study point to the importance of considering ethical behavior from a consumer perspective. If corporate actions are perceived as unethical, the company stands to lose favor with their most committed customers. Considering that more time, effort and investment is required to gain a new customer as to retain an old, this study shows that engaging in behavior perceived as unethical by consumers risks alienating the most committed customers. (shrink)

Prosocial compensation is a corporate social responsibility practice that involves donating money to a charitable cause on behalf of customers as a means to compensate them for their loss after a service failure. In order to determine the effectiveness of PC, we carried out three experiments while also comparing its effectiveness within private and public settings. Experiment 1 focused on the signaling effects of communicating the promise to offer PC to potential customers in the event of service failure. Results show (...) that, in both private and public settings, PC has positive effects on corporate image, credibility, and word-of-mouth intent. More significantly, PC improved one’s CSR image, whereas more tangible compensation, such as a gift voucher, did not. Experiments 2A and 2B focused on the effects of offering PC after a service failure on perceptions of justice. Results show that PC contributes to perceived distributive justice, procedural justice, and post-recovery satisfaction in both private and public settings. Our study showed that PC could be a relevant new CSR practice for organizations wanting to enhance theirs CSR image while contributing to fulfilling their ethical and philanthropic CSR responsibilities. We discuss the implications of our findings and offer several avenues for follow-up research on this initial study on PC. (shrink)

Purpose The purpose of the study is to probe millennials on their perceptions towards consumer ethics and to generate new insights in the realm of consumer behaviour. Millennials constitute a big fraction of the total consumer base with immense buying power. Therefore, the exploration of the ethical perspective of millennials is of vital importance for organizations. Design/methodology/approach The study applies a grounded theory approach to explore the subjective experiences of consumers and draws insights from the data following an interpretivist epistemology. (...) Findings The findings revealed five prominent themes that throw light on the consumer’s ethical orientations. The findings extend Hunt Vettel’s theoretical framework and ethical relativism. Research limitations/implications This research is limited by the small sample of millennials studied. Practical implications The paper advances the Hunt Vittel theoretical framework of ethics and provides insights into the deontological and teleological evaluations of millennials while making ethical decisions. The study adds to the existing research on millennials materialism and ethical orientation. The organizations get an insight into the ethical perceptions of millennials. The findings reinforce the consumer’s perceived importance of adoption of green practices by the organizations. The organization’s investment in green practices precipitate a favourable image of the organization among the millennials. Originality/value Literature in ethics is replete with studies adopting positivist methodologies. This paper is unique as it shuns the methodological bias and adopts a grounded theory approach to study new age digitally savvy millennial consumers. (shrink)