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Researching Consumer Perceived Ethicality (CPE) of Companies and Brands

Final Report Summary - RESEARCHING CPE (Researching Consumer Perceived Ethicality (CPE) of Companies and Brands)

The research project for which financial support was granted by the Marie Curie Actions program set out to research consumers’ ethical perceptions of brands and companies. In order to build a better understanding of the link between un/ethical corporate conduct and consumer responses, the overarching research objective of exploring how a positive or negative ethical perception of a company/brand emerges in the consumer’s mind is of utmost importance and required investigation. In other words, it is essential to understand the impact of company behaviour on ‘Consumer Perceived Ethicality (CPE)’, defined as consumers’ aggregate and valenced impression of a subject’s (i.e. a company, brand, product, or service) morality. Either neutral, or positively/negatively valenced, CPE is a summary construct representing consumers’ subjective assessment of a subject’s ethicality.

To direct attention towards the question of how consumers’ ethical perceptions of brands and companies are formed and affected by corporate behaviour, the construct of CPE first had to be conceptualised and operationalized. This in turn will allow quantitative assessment, measurement, and testing of concrete hypotheses. The executed work plan therefore proceeded in two consecutive stages, each with its separate sub-objective and suitable method for empirical data generation and analysis. A description of both phases including objectives, work performed as well as main results so far follows hereafter.


PHASE 1 – CONCEPTUALISE AND OPERATIONALISE CPE

The research objective of phase 1 was to conceptualise CPE from a consumer perspective and subsequently develop a valid and reliable scale to measure the strength and directionality of CPE. Following a literature review and given that CPE is a new construct, no such measurement tool previously existed. However, in order to conduct quantitative studies to investigate CPE formation processes (phase 2), the phenomenon needed to be operationalised first, meaning the construct had to be conceptualised from a consumer perspective before it could subsequently be measured in a valid and reliable way.

The work and empirical procedures performed followed commonly accepted methods of scale development in consumer research and were achieved by applying multiple methods. To facilitate a solid conceptual foundation, an inductive study preceded the actual testing and validating of the scale via factor analytic procedures. Hence, study 1 comprised of a qualitative inquiry to conceptualise consumer understanding of the term ethics and investigates consumer meanings of the term ethical. It reveals that, contrary to philosophical scholars’ exclusively consequentialist or non-consequentialist positions, consumers’ ethical judgments are a function of both these evaluation principles, illustrating that not any one scholarly definition of ethics alone is capable of capturing the content domain. The resulting conceptualisation identifies six key themes explicating the construct (see figure attached).
Building upon these findings, studies 2 and 3 were conducted to operationalize CPE. Study 2 consisted of a survey conducted among general consumers and aimed to test and refine the proposed CPE scale. Study 3 purely served a confirmation and replication purpose to demonstrate reliability and stability of the measurement model across a second independent sample, whereby validating the scale.

Final results including potential impact and use: The result of the studies conducted in phase 1 of this project is a reliable and valid multi-item CPE measurement scale. The conceptualisation and operationalisation of CPE is an essential prerequisite for future explorations and theory development given the absence of a suitable tool to capture and quantify the strength and direction of CPE. The key focus of phase 1 was on developing a valid and reliable multi-item measurement tool that is practical, parsimonious and easy to administer. The scale’s general applicability allows deployment in academic, business or other societal contexts as well as different research areas and thus facilitates much-needed theory building in this new research arena. The CPE scale has been applied and replicated by other researchers in different cultural contexts and was furthermore included in the PsychTESTS database, an indexed repository of established psychological measures by the American Psychological Association (APA).

PHASE 2 – EXPLORE AND CONFIRM DYNAMICS OF CPE FORMATION

The goal of this second phase was to further explore and confirm dynamics of the CPE formation process. Companies are increasingly concerned about their ethical perception and that of their brands. But not all companies are known to act consistently when it comes to CSR and ethics, whereby consumers may receive multiple, sometimes conflicting (positive and negative) pieces of information about a brand’s ethical conduct across time. In this case, how is the information integrated and consumers’ aggregate moral impression formed? The research objective was to shed light on the information integration process of consumers when forming CPE based on multiple information cues, a scenario that realistically reflects in-market exposure to numerous information cues.

The empirical work performed to answer the research question included controlled laboratory experiments and a survey among general consumers. The experiments focused on exploring the actual information integration process – or the mental strategy – underlying CPE formation, with a specific focus on the integration of contradictory pieces of ethical brand conduct by a fictitious brand. The survey on the other hand measured existing ethical perceptions of two well-known brands, with the process of ethical impression formation already taken place. Examining already established CPE and its domains of origin helped assess whether existing brand information is viewed and interpreted in relation with (or separate from) each other by consumers.

Results so far
Drawing on existing theories of person perception research in social psychology as a theoretical framework, the analyses and interpretations of the conducted empirical studies suggest that the process of information integration is consistent with the configural model of impression formation rather than following an algebraic information integration strategy. The findings provide empirical evidence for the observation that – despite the fact that almost any business engages in as well as promotes CSR-related activities and philanthropy today – consumers struggle to name ethical brands and companies, while effortless recounting numerous negative examples.

By facilitating a better understanding of the ethical perception formation process, this research contributes to the emergent research stream on CPE and by so doing facilitates a deeper understanding of related phenomena such as sustainable consumption and ethical consumer behaviour, where many questions (such as the existence of the attitude-behaviour gap) yet remain unanswered.
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