Methodology on unethical behavior affecting branding of companies

In this chapter will give the reader detailed information in order to make an estimate of the reliability and validity of the methods used. Further data collection methods, tools used to gather data and data analysis methods will be presented.

5. 1 Research Purpose

This research reason for the topic "How unethical behavior affects branding of companies" is explanatory in nature because I wish to explain the relationships between variables ie. Unethical behavior and exactly how it affects branding of companies. However this thesis is also exploratory as I was not able to find similar studies that give attention to the above mentioned problem. I have also worked on the domain of religion and how it can offer guidelines for today's business scenario. Towards the finish of the thesis I have provided my own conclusions by answering the study questions.

5. 2 Research Design and Approach

This section of methodology specifically deals with how the research was designed and what approach was utilized.

I have used the survey approach, that happen to be basically quantitative in nature. Surveys are beneficial when the study goal is usually to be predictive about certain outcomes. Extensive literature review has been done in the topic matter and drawing conclusions from it will be a part in data analysis chapter. Apart from that additional information will come from my surveys which were conducted regarding how unethical behavior affects consumers and what they feel about ethical brands. This study has a quantitative approach.

Also reviewing the work of others is an element of this research. It will enhance the knowledge of what has truly gone before where research into unethical behavior and branding has truly gone before.

In the qualitative section by analyzing the religious facet of ethical conduct, other specific attributes can be added to the model is likely to be discovered.

4. 3 Data Collection

Due to the actual fact that this research is both a quantitative and a qualitative one, interviews with consumers in the way of giving them a brief about the existing situation and filling of questionnaires was done. The questionnaire contained 27 points and survey was conducted for 68 consumers. For the qualitative part, physical artifacts evidence method, by means of insight into religion of different cultures was used.

Since very little secondary data is offered, primary data has been used to prove the hypothesis. But recent happenings have been quoted in the thesis whenever we can.

Library method was used to collect information regarding literature research and background. In this process XXXX articles, thesis reports and books mainly about branding, religion, ethics were collected via internet and from online databases like :EBSCO, Emerald Insight, SAGE journals, Jstor, Springer, Brittanica online encyclopedia were collected.

4. 4 Sample Selection

The study took place in the city of Bangalore, capital of Karnataka state in India. The sampling technique used was non probability sampling, which depends on the non-public judgment of the researcher. Under non probability sampling techniques, convenient sampling was used to secure a sample of convenient units. I've used final year MBA students, who are on the verge of becoming future managers.

4. 5 Collection and tabulation of data

For data collection the study instrument- questionnaire was used. The questionnaire contains 33 variables and 4 demographic variables.

Questionnaire was administered by handing within the questionnaire to MBA students.

The questionnaire consisted of 33 questions associated with attributes like knowing of consumer about various problems, involvement of consumer, expectation from the firm, intent to reward, intent to punish etc.

23 items could be evaluated by Likert scale that consisted of the 5 points mentioned below

Testing of hypothesis 1

The hypothesis because of this case is

H0: R2 (Reward) = 0

H1: R2 (Reward) > 0

As we saw from the value of R2 in Table: XXX it is significant at. 319

So reject null hypothesis.

This can even be proved by F Statistic in ANOVA table

Calculated F value = 4. 058 and Critical value of F with 3 and 26 examples of freedom is 2. 98 at ‹± =0. 05.

Hence the calculated F value exceeds the critical value obtained from Table XXX in statistical appendix.

Hence we reject H0 (null hypothesis) and accept H1

Accept H1

Awareness of issues, involvement of consumers and expectations of consumers from the firm can predict the intent to reward firms.

Multi regression model

This can be explained by the formula

¶ (Reward) =. 533 +. 156 (Awareness) +. 072 (Involvement) +. 627 (Expectation)

It was discovered that expectation of consumers from brands significantly influenced their decision to reward the firm.

Accuracy of results

To estimate the accuracy of predicted values ¶ SEE( Standard Error Estimate) is calculated. This statistic is the typical deviation of the actual Y values from predicted ¶ values.

SEE for hypothesis can be found from table xxx which is 0. 65.

Also table xxx gives us the accuracy of multicollinearity in our multiple regression model. Tolerance should become more than 0. 1. It meets the given criteria.

4. 9. 2 Hypothesis 2

Multiple regression analysis using SPSS was carried out to see if independent variables like

Awareness of issues, involvement of consumers & expectations of consumers significantly predicted the intent to punish the firm.

H0: The intent to punish companies by consumers is not related to the knowing of issues, involvement of customers and expectations of consumers from the firm.

H1: Knowing of issues, involvement of consumers and expectations of consumers from the firm can predict the intent to punish firms.

Testing of hypothesis 2

The hypothesis because of this case is

H0: R2 (Punish) = 0

H1: R2 (Punish) > 0

As we saw from the worthiness of R2 in Table: XXX it is significant at. 473

So reject null hypothesis.

This can also be proved by F Statistic in ANOVA table

Calculated F value = 7. 783 and Critical value of F with 3 and 26 examples of freedom is 2. 98 at ‹± =0. 05.

Hence the calculated F value exceeds the critical value extracted from Table XXX in statistical appendix.

Hence we reject H0 (null hypothesis) and accept H1

Accept H1

Awareness of issues, involvement of consumers and expectations of consumers from the firm can predict the intent to punish firms.

Multi regression model

This can be explained by the formula

¶ (Punish) =. 054 -. 246 (Awareness) +. 615 (Involvement) +. 750 (Expectation)

It was discovered that expectation of consumers from brands and their involvement in purchasing the brands significantly affected their decision to punish the firm.

Accuracy of results

To estimate the accuracy of predicted values ¶ SEE( Standard Error Estimate) is calculated. This statistic is the standard deviation of the actual Y values from predicted ¶ values.

SEE for hypothesis are available from table xxx which is 0. 643

Also table xxx gives us the accuracy of multicollinearity inside our multiple regression model. Tolerance should become more than 0. 1. It meets the given criteria.

4. 9. 3 Research question three

A Pearson product moment correlation coefficient was computed out to evaluate the partnership between Knowing of issues(Variable 1) and Involvement of consumers ( Variable 2 )

Table: xxx

There was a positive correlation between the two variables r=. 417, n=68, p=0. 00

CHAPTER 5

CONCLUSIONS AND RECOMMENDATIONS

Based on the prior 4 chapters I'll supply the answers to my research questions. First I am going to present the findings of my research questions and from then on the conclusions I have derived based on analysis of data. Finally I am going to present the implications for managers, theory and further research.

This research was designed to answer the next research questions

If unethical behavior of your company has a negative effect on consumers?

How unethical behavior influences the branding of the company?

How can ethics be inculcated in the present style of branding/ corporate strategy?

Learning from the past authors like Plato, Immanuel Kant, David Hume and the religious scripts of India.

The major findings of the research are highlighted below:-

The tendency of consumers to reward the firm because of its ethical action which was tested using multiple regression analysis revealed that awareness of issues and involvement of consumer's played less significant roles in deciding the tendency of the consumer's to reward the firm.

Whereas consumers tend to involve themselves more when it comes to punishing the firm.

Expectations of consumers played a major role in deciding whether to reward or punish the firm. This is in agreement with the research (University of Bath 2010). Today when brands promise something to customer's like for example L'Oreal "You're worthwhile" or for a tire company "More than tires we deliver satisfaction", consumer's expectations increase and if they're not satisfied they tend to punish the brand.

Awareness and involvement of consumers were positively correlated, indicating that as knowing of issues increases consumer's were likely to involve themselves in brand purchase decision by seeking information from the web, involving in social networking sites, discussing with fellow colleagues.

Although consumers want to punish the erring brands but cost was found as a major barrier while deciding purchase of ethical brands indicating that ethical brands must strive to get the expense of their products close to the prices of the other brands. This can be achieved by better supply chain management, efficient production processes, increasing awareness about their brand in the minds of consumers.

A large number of consumers who weren't purchasing ethical brands now, decided to buy ethical brands in the foreseeable future but they wished to know very well what the ethical companies are doing.

Consumer's preferred the following set of attributes for a ethical product

Type of label: ecological label

Promotion media: Television

Distribution: Shopping malls

Price: Equal to other brand

Design: Normal design

Issuer of labels: Indian Government

Type of information on products: Use of symbols that happen to be easy to understand

Although they were the attributes that received the highest responses from consumers, but that will not mean that other attributes are less important and should be ignored. It has implications for the company (price, kind of information, promotion media), the federal government (kind of labels, kind of information on products) and distributors (effective supply chain management to make certain right goods are at the right put on the right time).

2. How unethical behavior affects the branding of any company?

Unethical behavior on area of the company make a difference its branding. As seen from the survey findings consumers on being aware about the unethical practices of an organization are more involved in discussion about the brands (via social networking, discussion with friends, reading more journals, internet etc). In the current era when many people are employing modern media of communication, like internet, 3G enabled mobile phones, information spreads quickly and the negative perception towards a specific brand keeps building in the society.

Brands are no longer the house of the business. They are dependant on consumer expectations. Consumers today wish to know the business behind the brand. As depicted from survey results unethical practice of a specific brand affects the consumer's perception towards the organization plus they might boycott its products. That is in agreement with the research done by (Smith, Craig. N, Klein, G. J & Andrew, J 2002) in which they mentioned that consumers will disassociate themselves from the company doing wrong.

How can ethics be inculcated in the present style of branding/ corporate strategy?

After reviewing the sooner brand models mentioned in Figure XXX, I learned that none of the models expressed the word ethics. Although it is believed by many that the word ethics is within variables in the model like values, brand promise. Today when we are faced with unethical behavior of several companies, I believe that the word ethics must have a prominent space in the model which should not only provide the guidelines for ethical practices but also consist of an EBSC( Ethical Balance Score Card) to ascertain if the brand meets the ethical expectations. In today's demand economy where the benchmark of company is quality of energy and there is increased sense of interaction between the consumers and the business, some of the old variables of branding models can be reshaped to meet today's demand.

Learning from the past authors like Plato, Immanuel Kant, David Hume and the religious scripts of India.

As mentioned in the literature review Figure: XXX, ethics is thought to begin where the law ends. There is no definite consensus on whether something is right or wrong. Religion provides guidance in the so called 'grey areas' of business. Although one has to note that although different religions may have different perspectives but there are a few universal values mentioned in each religion, which can provide guidance. For example the Hindu cardinal principles of Sarvodaya (welfare for everyone), dharma (Social or moral duty), satya ( truth) and ahimsa (non- violence) are universal across religions.

As we've observed in case of the research that both mentioned religions Hinduism and Christianity have equal views on various unethical practices.

Since branding has definitely been inspired by the world of religion ( Daye Derrick & VanAuken Brad 2007). Components like clear vision, power from the enemy, authenticity, perfection, rituals & sensory appeal prove the association between the two. Since branding has been inspired by religion I think that definitely it can provide guidance for various problems. Religion has previously been used to aid business ethics ( Porth 1997). (Emerson, Tisha L. N. and Mckinney, Joseph A. (2010) ) recently found out that business professionals with higher degrees of religious importance are significantly less accepting of ethically questionable behavior.

Managerial implications:

This thesis targeted at finding the aftereffect of unethical behavior on branding. Indian companies and companies who wish to expand in India can learn many lessons out of this research.

Today when brand relationship theory is dependant on a dyadic brand consumer relationship, wherein both parties are equal contributors in brand value creation. A highly effective brand model therefore should not only provide information on everything a brandname does but should also describe consumer's attitude toward the brand. It should be future oriented. Answering the 7 H's (Author) will help future managers design an effective brand model for his or her organization.

How do we stay relevant in a changing marketplace?

How do we optimize our brand to drive profitable growth?

How are our customers making buying decisions?

How can we innovate to ensure competitive advantage?

How can we ensure our employees deliver our strategy?

How do we deliver a really valued customer experience?

How do we build operational effectiveness and alignment? ( Source: Author)

Also in today's increased era of consumer involvement and the evolving social media networking sites like facebook, twitter etc, information about the negative perception towards any brand spreads much more quickly than the sooner era. Branding model should provide for interaction between the consumers and the organization.

Since the outbreak of negative perception in regards to a brand is much faster nowadays, managers should think about developing appropriate counter reactive ways of react to the crisis, so that damage due to negative image is minimal.

The mere occurrence of a code of ethics is insufficient. All the companies have a code of ethics set up these days however in spite of that unethical practices occur. Incorporating religious teachings of various religions into code of ethics guidelines will help in better knowledge of ethics to the employees.

Managers should also take efforts in developing the ethical brand. The mentioned group of attributes lay out new tasks for managers to develop an ethical brand. Various challenges like association with fair trade foundation, developing appropriate supply chain measures, developing appropriate product information( symbols easy to understand) etc lie ahead for the managers.

Implications for future research

This thesis has covered the consequences of unethical behavior on branding of companies. But since the thesis was centered on FMCG products, future research can address the same across services industry or B2B industries.

This thesis suggested the utilization of EBSC( Ethical Balanced Score Card) for measuring ethical performance and implementing changes when deviations are found. Future research can address this issue by devising a method to measure ethical performance. Balanced score cards often face the situation of measuring performance aspects that happen to be qualitative in nature. Future research will permit to know the various metrics of EBSC. This is then incorporated into the corporate annual report.

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