Corporate Social Responsibility

New approach to measuring how consumers form perceptions of ethical behavior needed

Research by Katja H. Brunk, Postdoctoral Research Fellow, ESMT

The ethics of business conduct have increasingly come under public scrutiny. Research investigating how corporate behavior is received by the consumer shows that corporate misconduct has negative consequences on consumers’ responses towards and relationships with a company’s products and brands and can subsequently cause long-lasting reputational damage. In other words, how un/ethical a company is perceived to conduct its business is inherently linked to its overall reputation and its ability to stay competitive in the marketplace. Therefore, issues such as corporate ethics, sustainability, and Corporate Social Responsibility (CSR) rank high on any corporate agenda today. Fearing negative consequences of corporate scandals in the form of consumer boycotts, companies must be concerned about their ethical image and that of their brands.

Dr. Katja H. Brunk, Postdoctoral Research Fellow at ESMT, has investigated the highly relevant question of how consumers form these ethical perceptions. Until recently, the question of how ethical perceptions emerge in the consumer’s mind, and what they define as ethical, had gone largely unaddressed, with existing research focused mainly on the direct link between company behavior and consumer response. In her article titled “Un/ethical Company and Brand Perceptions: Conceptualizing and Operationalizing Consumer Meanings” published in the Journal of Business Ethics, Brunk explores the meanings consumers ascribe to the term ”ethical” and develops a parsimonious scale, called the consumer perceived ethicality scale (CPE), with which these ethical perceptions can be measured.

Findings reveal that, contrary to philosophical scholar’s exclusively outcome-based or rules-based position, consumers’ ethical judgment of a particular behavior (action) is a function of both evaluation principles, sometimes applied simultaneously. It is clear that scholars have until now adopted too rigid an approach to evaluating consumers’ ethical judgments.  These findings demonstrate that consumers’ representation of the ethical notion is not congruent with any one scholarly definition and that in order to accurately measure their perceptions, both rules-based and outcome-based facets of the content domain must be captured.

The developed measurement scale, which has recently been selected by the American Psychological Association for inclusion in their PsychTESTS database, constitutes not only a contribution to the academic community striving to advance scientific understanding in this area, but is also of high value in an applied, business context. The practical, easy-to-administer scale ought to be of high interest to CSR, brand, and general managers for conducting regular perception audits and tracking its evolution over time. In addition, its application will enable corporate policymakers to evaluate the impact of certain infractions or other CSR-related activities and campaigns on prevailing ethical perceptions.