Business Ethics and Word of Mouth

According to Roman and Cuestas (2008, p.1), the consumer perception of online retailers’ ethics significantly influences consumers’ word of mouth. The findings on the relationship between business ethics and consumers’ word of mouth resulted from conclusive research that entailed 357 online shoppers for the study. As cited by Roman and Cuestas (2008, p.1), business ethics is determined based on four dimensions which include privacy, non-deception, security, and fulfillment. Toysmart, a popular website that sold educational toys through the internet, gathered the personal information of its customers, including addresses, names, and family profiles. However, when the firm had an economic crisis, it attempted to sell its comprehensive customer database. However, the Federal Trade Commission filed a lawsuit against it, after which Toysmart went bankrupt after word spread rapidly over the internet regarding the company’s privacy breach. The link between ethics in business and word of mouth is further highlighted by Brooks (2011), who states that in the contemporary world, consumers make decisions after hearing other people’s opinions, including strangers. Brooks (2011) asserts that this behavior among consumers is presenting emerging opportunities and dynamic difficulties for marketers. Organizations are trying to keep up with the ethical guidelines as established by word of mouth Marketing Association (WOMMA) and PRSA to solve ethical engagement dilemmas in which customers use social media to spread information regarding a company (Brooks, 2011). The common principles shared by WOMMA and PRSA to enhance companies’ business ethics are honesty, transparency, and disclosure.

In a statement by Sharma and Lijuan (2013, p.414), consumers’ frequency of purchase from the same vendor significantly depends on consumer perception concerning online vendors’ business ethics. The internet has become a major channel through which word of mouth spreads fast to other consumers, thereby influencing their decisions regarding a vendor. The customers rely on the internet as a source of information on the ethical practices of a business and subsequently results in them making a decision based on other people’s perception about an online vendor (Sharma and Lijuan, 2013, p.415). Markovic et al. (2015, p.721) assert that customers’ perception of a corporate’s ethicality indirectly but positively influenced customer loyalty on the basis of perceived quality and affective commitment. Also, employee empathy influences customers’ perceived ethicality on customer loyalty and customer affective commitment, thereby impacting customer word of mouth (Markovic et al., 2015, p.721). The positivity of word of mouth as such depends on employee empathy which constitutes business ethics which is the metric that customers use to establish their commitment to a particular business. Brooks (2011) coincides with the fact that employee empathy influences consumer word of mouth and the difficulty to address the situation if it is continually perceived by organizations as a straightforward challenge. Establishing solid business ethics and aiming to use customer word of mouth as a marketing weapon extends beyond desirable rules such as reputable in-house units and public relations. For instance, the issue of privacy, which results in negative word of mouth from dissatisfied customers, is a technological challenge because of the democratized nature of technology in which even in-line employees have the communication tools at their disposal (Brooks, 2011). Employees thereby encompass a significant component in organizations with considerable impact on business ethics which essentially translates to either positive or negative word of mouth (Brooks, 2011). According to Roman and Cuestas (2008, p.1), security and privacy have been continually identified as essential ethical concerns of internet users whose infringement by companies results in dissatisfaction and consequently negative word of mouth. For instance, Brooks (2011) discusses the negative word of mouth from Facebook customers on its unethical privacy infringement are an extension of the impact of technological advancements, which cannot be regulated under the PRSA and WOMMA guidelines.

References

Brooks, R., 2011. Using Word-of-Mouth Marketing to Win, Ethically – PRsay. [online] Prsay.prsa.org. Available at: <https://prsay.prsa.org/2011/01/31/ethical-use-of-word-of-mouth-marketing/> [Accessed 31 March 2021].

Markovic, S., Iglesias, O., Singh, J. and Sierra, V., 2015. How does the Perceived Ethicality of Corporate Services Brands Influence Loyalty and Positive Word-of-Mouth? Analyzing the Roles of Empathy, Affective Commitment, and Perceived Quality. Journal of Business Ethics, 148(4), pp.721-740.

Román, S. and Cuestas, P., 2008. The Perceptions of Consumers Regarding Online Retailers’ Ethics and Their Relationship with Consumers’ General Internet Expertise and Word of Mouth: A Preliminary Analysis. Journal of Business Ethics, 83(4), pp.641-656.

Sharma, G. and Lijuan, W., 2014. Ethical perspectives on e-commerce: an empirical investigation. Internet Research, 24(4), pp.414-435.