1 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business -------------------------- Pham Ngoc Tuong Loan The Role of Moral Philosophy and Materialism in Determining Consumers’ Ethical Beliefs: An Empirical Study with Vietnamese Consumers MASTER OF BUSINESS (Honours) Supervisor: Dr. Le Nhat Hanh. Ho Chi Minh City- Year 2015 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 2 Abstract Consumers are what businesses are fighting for and consumer behaviors impact greatly both macroeconomic and microeconomic issues. An integral component of consumer behaviors is consumer ethics.
Unethical consumer behavior can cause serious damage to business and society. It results in significant damage to business profits and market morale (Steenhaut and Kenhove, 2006; Liu et al. Although consumer ethics in the United States and other industrialized countries have been studied extensively, few have been done in Asian-market settings, especially Vietnam. Asia has transformed itself to become a global hub of commerce but at the same time has faced serious consumers’ unethical issues such as software pirating, shoplifting and the rampant supply of counterfeit products.
Vietnam, an emerging economy in South East Asia, has experienced a high rate of software copyright violations, 81% compared to average 60% in other Asian countries, and over 8,000 cases of counterfeit goods and other intellectual property rights infringement (International Intellectual Property Alliance, 2013; American Chamber of Commerce in Vietnam, 2013). The purpose of this study is to examine the factors that influence Vietnamese consumers’ ethical beliefs. Particularly, this study investigates the impact of idealism, relativism, and materialism as personality characteristics on the ethical beliefs of consumers in Vietnam, which consist of attitudes toward actively benefiting from illegal actions, passively benefiting at the expense of the seller, actively benefiting from questionable but legal actions, and no harm, no foul actions. This exploratory study of 390 Vietnamese has results in many significant findings.
First of all, idealism and materialism significantly impacted the attitude towards actively benefiting from illegal actions. Second, materialism significantly impacted the attitude towards passively benefiting at the expense of the seller while idealism partially impacted this attitude. Third, idealism significantly impacted the attitude towards actively benefiting from questionable but legal actions while materialism partially impacted this attitude. Finally, idealism and relativism significantly impacted the attitude towards no harm, no foul actions.
In this study, literature on consumer ethics, idealism, relativism and materialism as well as the introduction of Vietnam, are LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 3 presented along with implications and recommendations for academic scholars, practitioners and the like. LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 4 CHAPTER 1: INTRODUCTION 1. Research background Research on ethical issues in marketing has drawn the interest of many authors (e., Rawwas, Patzer and Klassen, 2005; Liu, Zeng & Su, 2009; Zhao et al. This is because marketing is where many ethical problems in business arise (Vitell, Singhapakdi & Thomas, 2001).
There are a large number of studies that have developed concerning ethics in the marketplace; however, most of them have focused primarily on the companies’ side (Vitell and Paolillo, 2003). Since marketing is the process by which companies and consumers exchange values (Kotler & Armstrong , 2013, p.5), not considering consumers in ethics research can result in an incomplete understanding of marketing (Vitell &Paolillo, 2003).Vitell et al. (2001) stated that an improved understanding of why some consumers engage in unethical behavior could be helpful in solving many questionable practices. Asia has transformed itself to become a global hub of commerce but at the same time has faced serious consumers’ unethical issues.
Significant rates of software pirating, shoplifting and the rampant supply of counterfeit products have all recently become big issues especially in Asian market (Lu & Lu, 2010). Unethical consumption behavior, the dark side of consumer behavior so-called by Hirschman (1991) and a form of guerrilla warfare against companies (Tian & Keep, 2002), results in significant damage to business profits and market morale (Steenhaut and Kenhove, 2006; Liu et al. Particularly, the global loss to software piracy was over $50 billion in 2010, $16.5 million of which were from Asia-Pacific region (Microsoft, 2014). Asia's figure for lost sales was higher than any other region, according to the Business Software Alliance's annual report (2011).
Vietnam is one of the emerging economies in Southeastern Asia. Its economic growth rate has been among the highest in the world in the past decade, expanding at an average about 7.0 percent per year during the period 2002-2010, before slowing down to 5.9 percent in 2011, and 5. However, with the current rate of 81% of software copyright violations, Vietnam is now a nation with a high violation rate compared to the average level of 60% in other Asian countries (IIPA, 2013). In addition to piracy, counterfeit goods is also a major problem in Vietnam.
LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 5 According to American Chamber of Commerce in Vietnam (Amcham Vietnam, 2013), over 8,000 cases of counterfeit goods and other intellectual property rights (IPR) infringement were detected in 2012, representing an increase of 14% over 2011.The government admits that the counterfeit goods is difficult to track down and that fake products are becoming more sophisticated and difficult for government inspectors to identify (The Voice of Vietnam, 2010). Generally, Vietnamese consumers have a low awareness of the harm that counterfeiting and IPR infringement causes to the economy and society. A large percentage of Vietnamese consumers have purchased counterfeit goods, mostly due to low price (Amcham Vietnam, 2013). Moreover, sixty-two percent of consumers buy counterfeit goods without being aware that their actions are illegal and unethical according to the recent survey conducted by the Vietnam Standard and Consumer Association (The Voice of Vietnam, 2010).
Since there are raising concerns of consumer unethical behavior in Vietnam, it is of great importance to examine the factors that influence Vietnamese consumers’ ethical beliefs. Such an understanding can provide further insight into consumers’ ethics in Vietnam. This is essential for not only government and local associations to raise awareness and educate the public and consumers but also for companies to minimize the adverse impact of unethical behavior on companies’ operations in Vietnam. Research gap Vitell, Lumpkin, and Rawwas (1991) emphasizes a gap in the marketing ethics literature concerning the ethical beliefs and attitudes of the final consumers.
Although the ethical judgment of consumers in the United States and other industrialized countries has received considerable attention (e., Rawwas, Swaidan, & Oyman, 2005; Kavak et al., 2009), consumer ethics in Asian-market settings have seldom been explored (Zhao & Xu, 2013). Even though there have been a few scholars who have done research about this issue in Asia, for instance, Lu and Lu (2010) from Indonesia, Wagner-Tsukamot (2009) from Japan and Zhao and Xu (2013) from China, very few LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 6 focused on this issue in Vietnam. Vitell and Muncy (1992) has strongly urged for further research to look into the ethical beliefs of consumers across cultures and nationalities. Since Vietnam has integrated into the global economy but yet remained a very new research site, there is an urgent quest to investigate the ethical judgment of consumers in this emerging economy in order to fill in the research gap in consumer ethics across cultures.
In previous research, personal characteristics that are associated with the consumers’ ethical beliefs and judgments have been paid a lot of attention (Steenhaut & Kenhove, 2006; Swaiden, Vitell, & Rawwas, 2003; Rawwas, 2001). Among those, value consciousness, Machiavellianism, high propensity to take risk, high need for closure, age, and gender have been studied quite often. However, Vitell (2003) suggests that ‘‘these as well as other personality variables should be included in subsequent research studies.’’ Thus, in this study, moral philosophy (including idealism and relativism) and materialism are investigated as personality characteristics that can influence the ethical beliefs of consumers in Vietnam. Again, since personality characteristics and values are central to ethical decision making and are influenced by cultural variations, this study on consumer behaviors in Vietnam has significantly answered the call for more research in different cultures to explore “many different values” and their impacts on ethical decision making (Cherry & Caldwell, 2013; Swaidan, 2012).
Finally, by using instruments that were developed and used widely in Western cultures, this study also added more value to cross cultural research. Thus, achieving a better scientific understanding of consumer’s ethical behavior in Vietnam would be of keen interest to academicians and practitioners. Research objective The overall objective of this study is to examine some factors that are associated with consumers’ ethical beliefs. Specifically, it investigates: The relationship between materialism and consumers’ ethical beliefs.
The relationship between idealism and consumers’ ethical beliefs. The relationship between relativism and consumers’ ethical beliefs. LUAN VAN CHAT LUONG download : add luanvanchat@agmail. Research scope This study is limited in the investigation of consumers in Ho Chi Minh City, Vietnam.
It examines the sample of Vietnamese adults who are above eighteen years old in Ho Chi Minh City. Research contribution In this study, moral philosophy and materialism are investigated as personality characteristics that can influence the ethical beliefs of consumers in Vietnam. Therefore, it is believed to have both theoretical and practical contributions. At the theoretical level, this research contributes to the previous studies in the literature of consumer ethics study.
It sheds light on the attitude of ethical consumers in Vietnam, particularly in Ho Chi Minh City, a very new research site. Moreover, it provides empirical examination of a U.-based research model and instrument on a sample outside of the U., which extends the theoretical application to a broader scope as Vitell (2003) recommended additional cross-cultural studies. According to Vitell, further research is warranted to examine ethical beliefs with more detail and cultural depth to examine the universality of consumers, or lack thereof, with respect to ethical beliefs. At the practical level, this study provides additional understanding into the ethical perceptions of Vietnamese consumers.
Such an understanding can provide further insight into corporate approaches designed to minimize the adverse impact of unethical behavior (i. pirating or counterfeiting) on company operations in Vietnam. The results of this study can help Vietnamese government and local associations raise awareness and educate the public as well as consumers about unethical consumers’ behavior. Ethical consumers’ behavior will positively add more value to the business environment, which can encourage more foreign as well as local investments in Vietnam in the future.
LUAN VAN CHAT LUONG download : add luanvanchat@agmail. Research structure This study is organized into five chapters. Chapter one starts with the research formulation. Therefore, background of the research, research gap, objective and contribution are mentioned.
Chapter two reviews and synthesizes the theories in the literature of four concepts, including materialism, relativism, idealism and consumers’ ethical beliefs. Research methodology used to empirically test the research model is also mentioned in Chapter three while Chapter four presents the results of the data analysis. The last chapter, Chapter five, discusses the core findings of the study, suggests recommendations and points out some limitations of the research. LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 9 CHAPTER 2: LITERATURE REVIEW The purpose of this chapter is to review concepts of consumer ethics and moral philosophies which include idealism, relativism and materialism.
It discusses previous research concerning the impacts of moral philosophies on ethical beliefs of consumers. In this chapter, literature on consumer ethics, idealism, relativism and materialism is presented. In addition, a research model as well as all hypotheses are proposed and discussed accordingly. Consumer Ethics Ethical concerns in business have been extensively studied since the early 1980s.
In business, the major role of consumers cannot be denied (Vitell & Muncy, 1992). Although consumer ethics research was conducted before 1990 (i., De Paulo, 1986; Moschis & Churchill, 1978; Moschis & Powell, 1986; Wilkes, 1978), the majority of such literature has appeared only since 1990 (Vitell, 2003). Consumer attitudes toward unethical consumer practices have received considerable attention. For instance, Vitell addressed this issue with other scholars (e.