UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Luu Chi Nhan SELLECTED ANTECEDENTS OF CONSUMERS’ ETHICS: AN EMPIRICAL STUDY IN VIETNAM MASTER OF BUSINESS (Honours) Ho Chi Minh City - Year 2015 TIEU LUAN MOI download : skknchat@gmail.com UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Luu Chi Nhan SELLECTED ANTECEDENTS OF CONSUMERS’ ETHICS: AN EMPIRICAL STUDY IN VIETNAM ID: 22120060 MASTER OF BUSINESS (Honours) SUPERVISOR: DR. LE NHAT HANH Ho Chi Minh City – Year 2015 TIEU LUAN MOI download : skknchat@gmail.com Runnung head: SELLECTED ANTECEDENTS OF CONSUMERS’ ETHICS i UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Luu Chi Nhan Mbus 3.2 Sellected Antecedents of Consumers’ Ethics: An Empirical Study in Vietnam Supervisor: Dr. Le Nhat Hanh. Ho Chi Minh City- Year 2015 TIEU LUAN MOI download : skknchat@gmail.com SELLECTED ANTECEDENTS OF CONSUMERS’ ETHICS ii ACKNOWLEDGEMENTS This thesis could not have been completed without the timely and proper advice and support from a number of people around me.
First and foremost I would like to thank my supervisors Dr. Le Nhat Hanh for her unsparing academic advice as well as moral support. All constructive suggestions and insightful advice based on her admirable expertise and erudition always impressed me. I am sure that this thesis would not have been possible without her support.
Many thanks go to my MBUS colleagues who have been unforgettable companions on our common journey. I also extend my hearty thanks to the staff members of the International School of Business for their efficient service and support all these years. My special thanks go to all the participant group of this thesis. They played an essential role in carrying out the research for this thesis.
I appreciate their precious time and endeavour. Last but not least, I have to earnestly thank my family for their unending moral support and affectionate attention to me at all times. Words cannot express how grateful I am to my parents and my family. Luu Chi Nhan Ho Chi Minh City, December 22, 2015 TIEU LUAN MOI download : skknchat@gmail.com SELLECTED ANTECEDENTS OF CONSUMERS’ ETHICS iii ABSTRACT These have been wide range of critical questions about the role of ethics in today’s business and society.
Consumers are major participants in the business process and not considering them in ethics research could result in an incomplete understanding of that process. With the increasing international trade, there is a growing need to increase our understanding of consumer ethics from different countries. A report revealed that Southeast Asia has become Asia’s safe haven as China and India falter (NewsMax, 2012). As a result, more studies are needed to understand consumer ethical behaviour in Asian countries, particularly as a consequence of the prevalence of piracy and counterfeit goods (Ang et al., 2001; Chan et al., 1998; Lu and Lu, 2009).
In Vietnam, around 81% of software used is pirated comparing to average 62% in Asia (Global Study, 2014) The general purpose of the present study was to contribute to the existing knowledge by getting a more thorough understanding of the why of consumer ethics, allowing marketers to predict unethical consumer behavior, and ultimately prevent consumers from taking advantage of the seller. Particularly, this study investigates the possible effects of self- monitoring, Machiavellism, and oppotunism on all dimensions of consumers’ ethical attitudes. The sample is drawn from 340 Vietnamese has results in many significant findings. For the dimension of ‘actively benefiting from illegal actions (ABIA)’, the result indicates positive relationship with self-monitoring and oppotunism but no relationship with Machiavellism.
As for ‘actively benefiting from questionable but legal actions (ABQA)’, the outcome shows a positive relationship with oppotunism and Machiavellism but no relationship with self-monitoring. Same resuls found for ‘passively benefiting at the expense of the seller (PBEO)’, and ‘no harm, no foul actions (NHNF)’. In this study, literature on consumer ethics, self-monitoring, Machiavellism, and oppotunism as well as the introduction of Vietnam, are presented along with implications and recommendations for academic scholars, practitioners and the like. TIEU LUAN MOI download : skknchat@gmail.com SELLECTED ANTECEDENTS OF CONSUMERS’ ETHICS iv TABLE OF CONTENTS ACKNOWLEDGEMENTS.
iii LIST OF FIGURES .vi LIST OF TABLES. vii CHAPTER 1: INTRODUCTION. 6 CHAPTER 2: LITERATURE REVIEW AND HYPOTHESIS DEVELOPMENTS. 17 CHAPTER 3: RESEARCH METHODOLOGY .5 Data analysis methods.
26 CHAPTER 4: DATA ANALYSIS AND RESULTS .3 Exploratory Factor Analysis (EFA) .4 Multiple Regression Analysis. 35 TIEU LUAN MOI download : skknchat@gmail.com SELLECTED ANTECEDENTS OF CONSUMERS’ ETHICS v 4.5 Discussion of findings. 44 CHAPTER 5: CONCLUSIONS AND IMPLICATIONS .3 Limitations and future research. 59 APPENDIX A: Survey Questionnaire.
59 APPENDIX B: Survey Questionnaire. 62 APPENDIX C: Total Variance Explained of Independent Variables. 66 APPENDIX D: Histogram, Scatter plot & Normal Regression of Dependent Variable. 68 TIEU LUAN MOI download : skknchat@gmail.com SELLECTED ANTECEDENTS OF CONSUMERS’ ETHICS vi LIST OF FIGURES Figure 2.
18 TIEU LUAN MOI download : skknchat@gmail.com SELLECTED ANTECEDENTS OF CONSUMERS’ ETHICS vii LIST OF TABLES Table 2.1 The study’s hypotheses .1 Scales of Consumer Ethics .2 Scales of Self-monitoring .3 Scales of Machiavellianism .4 Scales of Opportunism .5 Cronbach’s Alpha Reliability Coefficient .3 KMO and Bartlett's Test of Independent Variables .4 Rotated Component Matrixa for Independent Variables .5 Summary of EFA for Dependent Variables .8 Model Summaryb for Dependent Variable: ABIA .9 Coefficientsa for Dependent Variable: ABIA .10 Model Summaryb for Dependent Variable: PBEO .11 Coefficientsa for Dependent Variable: PBEO.12 Model Summaryb for Dependent Variable: ABQA .13 Coefficientsa for Dependent Variable: ABQA .14 Model Summaryb for Dependent Variable: NHNF .15 Coefficientsa for Dependent Variable: NHNF .16 Summary of the hypothesis testing results. 43 TIEU LUAN MOI download : skknchat@gmail.com SELLECTED ANTECEDENTS OF CONSUMERS’ ETHICS 1 CHAPTER 1: INTRODUCTION 1.1 Research background Business ethics research has focused heavily on marketing exchange and participants within this process (Rawwas, Patzer, & Klassen, 2005; Liu, Zeng, & Su, 2009; Zhao et al., 2013), because marketing exchange is the focal point of most ethical problems in business (Vitell, Singhapakdi, & Thomas, 2001). Although the role of business ethics in the global economy has been thoroughly investigated (e., DeGeorge, 1993; Vogel, 1992), international consumer ethics has received growing attention. In business, consumers are also the major participants (Vitell and Muncy, 1992).
The importance of consumer ethical decision making has received considerable interest (e., Fullerton et al., 1996; Muncy and Vitell, 1992; Rawwas, 2003; Vitell et al. However, consumer ethics in Asian countries have been addressed less frequently (Ang et al., 2001; Chan et al., 1998; Erffmeyer et al., 1999; Rawwas, 2001; Rawwas et al., 1998; Thong and Yap, 1998). There were a few ethical studies targeting Indonesian markets (Rawwas, 2001; Sawono and Armstrong, 2001; Wu, 2001). In addition, although the ethical judgment of consumers in the United States and other industrialized countries has received considerable attention, consumer ethics in Asian-market settings have received less attention (e., Ang et al., 2001; Chan et al., 1998; Erffmeyer et al., 1999; Rawwas, 2001; Rawwas et al., 1998; Thong and Yap 1998).
Vitell (2003) recommended additional cross-cultural studies. 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. On the eastern tip of the Indo-China peninsula in south-east Asia, Vietnam is one of the larger and more densely populated countries in the region. Confirmed population figures are hard to obtain, but an estimate puts the Vietnam population in 2014 at 92.5 million, up from the 2012 estimate of 91.5 million and this impressive figure would make the country the 14th most populous on the planet or 46th most densely populated country on earth.
Moreover, this is one of the most diverse countries on earth when it comes to ethnicity splits and in fact, the Vietnamese government recognises no less than 54 ethnic groups within the country. Furthermore, through the long years of the Vietnam War which have had some form of impact on the standard of living of Vietnamese. This truth more or less affects Vietnamese consumers’ ethics on their daily practice. TIEU LUAN MOI download : skknchat@gmail.com SELLECTED ANTECEDENTS OF CONSUMERS’ ETHICS 2 The statistical figure shows that global rate at which PC software was installed without proper licensing rose from 42 percent in 2011 to 43 percent in 2013.
The commercial value of these unlicensed installations slipped marginally to $62.7 billion, with emerging economies continuing to account for the majority. Particularly, unlicensed PC software in Vietnam is 81% comparing to average 62% in Asia-Pacific - the region with the highest overall rate of unlicensed PC software installations (Global Study, 2014). On 09 April, 2015, the Department of Market Management under the Ministry of Industry and Trade and Cooperative Vereniging SNB–REACT U.A (React), an anti-counterfeit network in Vietnam, have signed a memorandum of understanding (MoU) on cooperation in combating fake goods and enforcing intellectual property rights. Do Thanh Lam, Vice Director of the Department said market-management forces nationwide inspected and settled over 100,000 cases of legal violations, including over 10,000 cases concerning fake goods and intellectual property right infringement.
However, he also notes that the fight against counterfeit goods is still facing difficulties and requires a stronger effort from and joint collaboration of all sectors and legal enforcement forces (VietnamPlus, 2015). The shift of much of the world's manufacturing to countries with poor protection of intellectual property has been a significant factor contributing to the growth of counterfeiting in recent years. Internet in general and e-commerce sites like eBay in particular, have also made it easier to distribute counterfeit goods. Equally important, far too many consumers in Vietnam with little disposable incomes are willing to accept a product of lower quality for a cheaper price but little do they realize they are undermining Vietnam’s chances at building a better future for all.
The World Health Organization has estimated that 60% of counterfeit medicine cases occur in developing countries. The popular view is that buying a fake is a win-win game, so long as you know what you are paying for. Everyone enjoys a bargain. But it's far too easy – and wrong – to write off this kind of crime as not really harmful to anyone.
In 2014, law enforcement agencies detected and prosecuted 17,396 cases of trading in knock off products seizing an estimated total value of fake goods of VND36 billion, a year- on-year increase of 24.2% in the number cases and 12. Of course these numbers are somewhat nebulous as no one really knows the true extent and cost of counterfeit products. Law enforcement in Vietnam simply does not have the wherewithal to counter these pirates as they have become far too sophisticated and to do so effectively demand high TIEU LUAN MOI download : skknchat@gmail.com SELLECTED ANTECEDENTS OF CONSUMERS’ ETHICS 3 technology, which currently Vietnam does not have. Due to the complicated and sophisticated situation, there must be a joint effort and comprehensive involvement of relevant authorities, businesses and customers to combat counterfeiting (The Voice of Vietnam (2015).
Consumers, however, encourage such activities. Loose ethical standards among consumers may be an important variable that leads to such unethical behaviors. Very often we see that most consumers in ASEAN countries have a relatively low economic standard of living and, thus, do not have the economic means to purchase authorized but expensive products (Kusumadara, 2010). As illustrated above, there are opposed ethical viewpoints regarding what is right and what is wrong that need further study in examining the ethical perspectives of Vietnamese consumers so as to identify effective means of understanding important factors influence on consumer behavior.
Such an understanding can not only provide further insight into firm- level approaches designed to minimize the adverse impact of counterfeiting on company operations in Vietnam, but also for the government-level policies released to raise awareness and to combat against illegal actions in general and unethical consuming practices in particular.