Show all articles in this section

Consumer ethics across cultures: Why consumers don’t care.

AUTHOR: Deborah Tarrant   DATE: 01.05.05   ISSUE 1, 2005

Making sense of the consumer ethics conundrum in an increasingly globalised environment is an important, if confusing, challenge.

Organisations aiming to appeal to ethical consumers are walking a fine line. There’s a clear disconnect between what consumers say matters to them when choosing a product to purchase and how those people behave when it comes to the crunch.

Lip service rules when ethical issues come into play, according to new research showing there’s frequently no relationship between what consumers say and do. In many instances, consumers remain completely unaware of ethical issues when making a purchase.

A paradox now emerges with the suggestion that organisations breaching ethical standards may risk damaging their reputations, while at the same time, there’s no consumer mandate for businesses to strive to do the ‘right’ thing.

A research team from Australian Graduate School of Management [AGSM] led by senior marketing lecturer Dr Giana Eckhardt set out to make sense of this disconnect by exploring the attitudes of consumers in eight countries and the justifications that they use for making unethical purchasing decisions.

The team’s findings show that assumptions cannot be made – not only about how people will react when faced with making a choice between goods produced ethically and others, but about who will react. The majority of participants in the new research project either were not conscious of ethical breaches, simply didn’t care or felt powerless to change the status quo. Price and brand remain the focus in purchasing decisions.

Lip service rules when ethical issues come into play -- read the research paper online.

ILLUSTRATION: Gregory Baldwin

Activist consumers do exist. However, little has been known about the size and characteristics of this group or the benefits for organizations that adopt social positioning strategies – and the cost for those that don’t, reports Eckhardt. This new study, to be published in a forthcoming paper in the journal, Consumption, Markets and Culture, follows surveys previously conducted at AGSM which showed ethical consumers could not be categorised along demographic lines, by age, gender or country of origin.

Eckhardt and the research team* conducted a total of 160 one-hour depth interviews with consumers from similar (middle class) socio-economic groups in China, India, Australia, US, Sweden, Germany, Turkey and Spain using three widely reported scenarios: buying sport shoes produced in sweatshops; using non-biodegradable soap that could harm animals or the environment; and purchasing counterfeit goods (typically, this is big-name brand rip-off, although some respondents also related it to music piracy.)

Presented to participants as news stories, the scenarios were selected for their differing impacts, says Eckhardt; whereas the sports shoe scenario is an ethical breach involving people far away, non-biodegradable soap has the potential to harm the individual. In the case of counterfeit goods – an example used was the production of fake Louis Vuitton handbags – the affected entity is a large corporation. Interestingly, this last scenario was the one to which respondents displayed the greatest indifference.

In the cases where people could see no ethical dilemmas at all – they were unaware of any moral issues involved in production or the impact of the end-product – the common reason was cultural. For many respondents in emerging markets, it was the first time they had encountered these issues.

"Many who were cogniscent of the ethical breaches did not allow this to influence their final purchase."

PHOTO: Greg Newington (Dr Giana Eckhardt)

“Chinese respondents who had been taught about capitalism from a Communist perspective did not view the use of cheap labour as exploiting workers. They saw no ethical breach because to them that was the way capitalism works,” explains Eckhardt.

Similarly in India, where there has been a struggle to eliminate the caste system and the British hierarchical class system over the past 50 years, they did not see a problem with the intellectual property issue of putting a premium-priced luxury item, such as a Louis Vuitton handbag [albeit a fake one], within the reach of many. “To them, this was an egalitarian stand.”

The few who had changed their purchasing behaviour were people who had seen the consequences of ethical breaches in a very personal, vivid and meaningful way, says Eckhardt.

The disconnect was revealed in the cases where people displayed some awareness of the ethical issues. It became apparent as the researchers’ line of questioning involved how the consumer approached the purchasing decision, asking them to name the important attributes of the product and their thought processes.

Significantly, many who were cogniscent of the ethical breaches did not allow this to influence their final purchase. Their rationale for this varied, although it frequently involved price or the desire to fit in with social norms. “I want to wear this brand because everyone else does,” is a typical response reported by the researchers.

*Augur, Devinney, Louviere & Burke, 2004.

Justifying the disconnect One of the major findings of the study is that most consumers are unwilling to make any trade-off in order to make an ethical purchase. Those who claimed they cared about an issue would not go out of their way to source or be willing to pay more for it. And the way consumers justified the disconnect was equally diverse. In the instance where sweatshop labour had been used, people perceived the exploitation of workers to be an issue that was often not only geographically distant, but also was far removed from their sphere of influence. Therefore they dismissed considering it as ‘a waste of time’ or simply, ‘the way of the world’. “In the case of intellectual property rights, they thought it was just big corporations who were making too much money anyway,” reports Eckhardt. “They didn’t care about this issue because they didn’t perceive it to be hurting anyone.” Even in the case of biodegradable soap that might affect an individual’s water supply, responsibility for the environment was seen to rest with someone else, either the producer or the authorities. The onus of moral responsibility was seen to rest with governments and businesses. Eckhardt’s team observed that in the minority of cases where consumers cared about these ethical issues, they considered themselves powerless to influence the ethical agenda – although another claim was that “if the producers cared about this issue then I would too”. “There’s a link between producer ethics and consumer ethics which indicates consumers are looking for leadership in this area,” suggests Eckhardt who, after analysing the research, paraphrases a popular cry – “If producers don’t give up some profits to act ethically, then why should I give up some of my hard-earned money”. Better ethical behaviour on behalf of the business will influence consumers, she says. Implications about environmental positioning for business also emerge from this research. “There’s a risk in breaching ethical standards by ignoring the social dimension of products, but there’s no certain bottom line gain for those that strive to achieve higher standards,” Eckhardt says. “Positioning an organization as more socially responsible may have merit, but ethical operators would be ill-advised to raise their price against competitors on this basis because it’s not an attribute consumers would pay more for.” Research into ethical consumerism is still in the early phases, however, these new findings raise questions over whether the corporate social responsibility movement has a mandate from consumers. Some consumers could be helped to make more ethical decisions, according to Eckhardt who believes the implications are particularly relevant to non-government organizations (NGOs) as they try to market ideas and activate consumers in the increasingly globalised political and regulatory vacuum.