Skip to content
NBS

When unethical behaviour of consumers has beneficial consequences of online retailers and other consumers: An empirical study

  • School: Nottingham Business School
  • Funding: UK student / EU student (non-UK) / International student (non-EU) / Self-funded

Overview

Consumers often behave in ways that violate the law, transgress widely held moral principles, or disobey retailers’ rules or policies. Such behaviours can take many forms (Vitell, 2003; Mazar, Amir, and Ariely, 2008; Kim, Kim, and Park, 2012; Yang, Algesheimer, and Dholakia, 2017; Hunt, 2019). Common instances include shoplifting, returning purchased items for a refund after using them or beyond the return date, accidentally or wilfully damaging in store merchandise, and providing false or misleading personal information such as a telephone number (Harris, 2008; Korgaonkar et al., 2019). Not surprisingly, even when a small fraction of customers engages in such behaviours, it can generate significant ramifications for retailers and its other customers.
Recent psychological research has begun to study positive effects of unethical behaviour on others. Erat and Gneezy (2012) introduce a “Pareto white lie” in which both the liar and others benefit. They provide the example of a physician who lies by giving a placebo to patients, knowing well that the medicine will have no pharmacological effect, but may confer psychological benefits. Therefore, it has been suggested that discover that an initial lawful ethical transgression, defined as a violation of the retailer’s policies by signing up for multiple accounts, may have positive longer-term consequences for the retailer and its other customers.
In considering how retailers conceive of and deal with ethical transgressions by customers, two opposing moral philosophies provide a useful starting point. These are the deontological and teleological perspectives on what constitutes ethical behaviour and how we should respond to it (Jones, Felps, and Bigley, 2007; Monnot, et al., 2019). A deontological perspective, exemplified by Kantian ethics (Vitell, 2003), focuses solely on the inherent rightness or wrongness of an action, disregarding its consequences. Emphasis is given to the individual’s motives for acting, with the ultimate goal of behaving in a certain way for the right reasons. Contrarily, in assessing a behaviours’ ethicality, a teleological perspective, having its conceptual foundations in the Utilitarianism School developed by British philosophers Jeremy Bentham and David Hume (Bentham, 1789), weighs the cumulative positive and negative effects of consequences and does not focus on the nature of the behaviour itself.

This project advances the idea that when deciding how to respond the retailer should distinguish between unlawful and lawful unethical behaviour. When the behaviour is lawful but unethical, the retailer should consider what makes it unethical and longer-term consequences for itself and its other customers. Consistent with teleological ethics, and customer relationship management principles (Mark et al., 2013; Hunt, 2019), it is suggested that lawful customer behaviours that are unethical because they violate retailer policy can have a range of consequences stretching out over the customer’s relationship with the retailer. An example of this unethical behaviour is the customer’s violation of a policy set forth by the retailer such as the requirement of a unique telephone number or email address for each account.

Such a perspective of retailer response to unethical customer behaviour requires two conditions. First, the customer’s unethical behaviour must be lawful. When the behaviour violates the law (e.g., assaulting a fellow customer in a store, outright stealing, etc.), consequences are immaterial. The retailer must report such customer behaviour and prosecute the customer without any teleological ethical considerations. A greater, more nuanced range of retailer responses that support broader response using teleological ethics presupposes a lawful, ethical transgression that retailing researchers and practitioners have not yet considered.  An example is the customer’s violation of a policy set forth by the retailer such as the requirement of a unique telephone number or email address for each account. The second condition is that the customer’s transgression should lead to measurable positive consequences for the retailer and other customers.

This study will investigate the possibility that in relational retailing settings, an initial ethical customer transgression may open the door to behave in legitimate ways on an ongoing basis. Furthermore, such activities may add substantial value to the retailer and other customers, outweighing the harm of the initial unethical behaviour. When a range of possible outcomes from the negative to the positive is possible, the retailer must respond according to the consequences. It is envisaged that the study will utilise sequential mixed-methods with a qualitative technique of data gathering and analysis to extend on the initial results. The qualitative technique will be utilized to complement the incomplete and inconsistent findings from prior studies.

References


Bentham, Jeremy (1789). An Introduction to the Principles of Morals and Legislation, Oxford: Clarendon Press.
Erat, Sanjiv and Uri Gneezy (2012). White Lies,” Management Science, 58 (4), 723–33.

Harris, Lloyd C. (2008). Fraudulent Return Proclivity: An Empirical Analysis, Journal of Retailing, 84(4), 461-476.

Hunt, S.D. (2019). The ethics of branding, customer-brand relationships, brand-equity strategy, and branding as a societal institution. Journal of Business Research, 95, 408-416.

Jones, Thomas M., Will Felps, and Gregory A. Bigley (2007). Ethical Theory and Stakeholder-Related Decisions: The Role of Stakeholder Culture, Academy of Management Review, 32 (1), 137–55.

Kim, Jungkeun, Jae-Eun Kim, and Jongwon Park (2012). Effects of Cognitive Resource Availability on Consumer Decisions Involving Counterfeit Products: The Role of Perceived Justification, Marketing Letters, 23(3), 869–81.

Korgaonkar, P.K., Gironda, J.T., Petrescu, M., Krishen, A.S. and Mangleburg, T.F. (2019). Preventing shoplifting: Exploring online comments to propose a model. Psychology & Marketing, 27(5), 48-61.

Mark, Tanya, Katherine N. Lemon, Mark Vandenbosch, Jan Bulla, and Antonello Maruotti (2013). “Capturing the Evolution of Customer–Firm Relationships: How Customers Become More (or Less) Valuable over Time, Journal of Retailing, 89(3), 231-245.

Mazar, Nina, On Amir, and Dan Ariely (2008). The Dishonesty of Honest People: A Theory of Self-Concept Maintenance, Journal of Marketing Research, 45(6), 633–44.

Monnot, E., Reniou, F., Parguel, B. and Elgaaied-Gambier, L. (2019). Thinking outside the packaging box: should brands consider store shelf context when eliminating overpackaging? Journal of Business Ethics, 154(2), 355-370.

Vitell, Scott J. (2003). Consumer Ethics Research: Review, Synthesis and Suggestions for the Future, Journal of Business Ethics, 43(1-2), 33–47.

Yang, Z., Algesheimer, R. and Dholakia, U. (2017). When Ethical Transgressions of Customers Have Beneficial Long-Term Effects in Retailing: An Empirical Investigation. Journal of Retailing, 93(4), 420-439.

Supervisor

Dr Gomaa Agag

Entry qualifications

For more information please visit the NTU Doctoral School – Research Degrees webpages.

How to apply

For more information about our PhD programme, and how to apply, please visit research degrees in business.

Please email the university's Doctoral School for an application pack.

For informal enquiries about this project, please email Linzhi Tan.

Fees and funding

Find out about fees and funding for PhD projects.

Guidance and support

Find out about guidance and support for PhD students.

Still need help?

Gomaa Agag