The role of Moral philosophy anh Materialism in Determining consumers'''' ethucal beliefs: An empirical study with Vietnamese consumers

Particularly, this study investigates the impact of idealism, relativism, and materialism as personality characteristics on the ethical beliefs of consumers in Vietnam, which consist of

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business -

Pham Ngoc Tuong Loan

The Role of Moral Philosophy and Materialism in Determining Consumers’ Ethical Beliefs: An Empirical

Study with Vietnamese Consumers

MASTER OF BUSINESS (Honours) Supervisor: Dr Le Nhat Hanh

Ho Chi Minh City- Year 2015

Abstract Consumers are what businesses are fighting for and consumer behaviors impact greatly both macroeconomic and microeconomic issues An integral component of

consumer behaviors is consumer ethics Unethical consumer behavior can cause serious damage to business and society It results in significant damage to business profits and market morale (Steenhaut and Kenhove, 2006; Liu et al., 2009) Although consumer ethics

in the United States and other industrialized countries have been studied extensively, few have been done in Asian-market settings, especially Vietnam Asia has transformed itself to become a global hub of commerce but at the same time has faced serious consumers’

unethical issues such as software pirating, shoplifting and the rampant supply of counterfeit products Vietnam, an emerging economy in South East Asia, has experienced a high rate of software copyright violations, 81% compared to average 60% in other Asian countries, and over 8,000 cases of counterfeit goods and other intellectual property rights infringement (International Intellectual Property Alliance, 2013; American Chamber of Commerce in Vietnam, 2013) The purpose of this study is to examine the factors that influence

Vietnamese consumers’ ethical beliefs Particularly, this study investigates the impact of idealism, relativism, and materialism as personality characteristics on the ethical beliefs of consumers in Vietnam, which consist of attitudes toward actively benefiting from illegal actions, passively benefiting at the expense of the seller, actively benefiting from

questionable but legal actions, and no harm, no foul actions This exploratory study of 390 Vietnamese has results in many significant findings First of all, idealism and materialism significantly impacted the attitude towards actively benefiting from illegal actions Second, materialism significantly impacted the attitude towards passively benefiting at the expense

of the seller while idealism partially impacted this attitude Third, idealism significantly impacted the attitude towards actively benefiting from questionable but legal actions while materialism partially impacted this attitude Finally, idealism and relativism significantly impacted the attitude towards no harm, no foul actions In this study, literature on consumer ethics, idealism, relativism and materialism as well as the introduction of Vietnam, are

presented along with implications and recommendations for academic scholars, practitioners and the like

CHAPTER 1: INTRODUCTION 1.1 Research background

Research on ethical issues in marketing has drawn the interest of many authors (e.g., Rawwas, Patzer and Klassen, 2005; Liu, Zeng & Su, 2009; Zhao et al., 2013) This is

because marketing is where many ethical problems in business arise (Vitell, Singhapakdi & Thomas, 2001) There are a large number of studies that have developed concerning ethics

in the marketplace; however, most of them have focused primarily on the companies’ side (Vitell and Paolillo, 2003) Since marketing is the process by which companies and

consumers exchange values (Kotler & Armstrong , 2013, p.5), not considering consumers in ethics research can result in an incomplete understanding of marketing (Vitell &Paolillo, 2003).Vitell et al (2001) stated that an improved understanding of why some consumers engage in unethical behavior could be helpful in solving many questionable practices

Asia has transformed itself to become a global hub of commerce but at the same time has faced serious consumers’ unethical issues Significant rates of software pirating,

shoplifting and the rampant supply of counterfeit products have all recently become big issues especially in Asian market (Lu & Lu, 2010) Unethical consumption behavior, the dark side of consumer behavior so-called by Hirschman (1991) and a form of guerrilla warfare against companies (Tian & Keep, 2002), results in significant damage to business profits and market morale (Steenhaut and Kenhove, 2006; Liu et al., 2009) Particularly, the global loss to software piracy was over $50 billion in 2010, $16.5 million of which were from Asia-Pacific region (Microsoft, 2014) Asia's figure for lost sales was higher than any other region, according to the Business Software Alliance's annual report (2011)

Vietnam is one of the emerging economies in Southeastern Asia Its economic

growth rate has been among the highest in the world in the past decade, expanding at an average about 7.0 percent per year during the period 2002-2010, before slowing down to 5.9 percent in 2011, and 5.0% in 2012 (US Department of Commerce, 2013) However, with the current rate of 81% of software copyright violations, Vietnam is now a nation with a high violation rate compared to the average level of 60% in other Asian countries (IIPA, 2013) In addition to piracy, counterfeit goods is also a major problem in Vietnam

According to American Chamber of Commerce in Vietnam (Amcham Vietnam, 2013), over 8,000 cases of counterfeit goods and other intellectual property rights (IPR) infringement were detected in 2012, representing an increase of 14% over 2011.The government admits that the counterfeit goods is difficult to track down and that fake products are becoming more sophisticated and difficult for government inspectors to identify (The Voice of

Vietnam, 2010)

Generally, Vietnamese consumers have a low awareness of the harm that

counterfeiting and IPR infringement causes to the economy and society A large percentage

of Vietnamese consumers have purchased counterfeit goods, mostly due to low price

(Amcham Vietnam, 2013) Moreover, sixty-two percent of consumers buy counterfeit goods without being aware that their actions are illegal and unethical according to the recent

survey conducted by the Vietnam Standard and Consumer Association (The Voice of

Vietnam, 2010)

Since there are raising concerns of consumer unethical behavior in Vietnam, it is of great importance to examine the factors that influence Vietnamese consumers’ ethical

beliefs Such an understanding can provide further insight into consumers’ ethics in

Vietnam This is essential for not only government and local associations to raise awareness and educate the public and consumers but also for companies to minimize the adverse

impact of unethical behavior on companies’ operations in Vietnam

1.2 Research gap

Vitell, Lumpkin, and Rawwas (1991) emphasizes a gap in the marketing ethics

literature concerning the ethical beliefs and attitudes of the final consumers

Although the ethical judgment of consumers in the United States and other

industrialized countries has received considerable attention (e.g., Rawwas, Swaidan, & Oyman, 2005; Kavak et al., 2009), consumer ethics in Asian-market settings have seldom been explored (Zhao & Xu, 2013) Even though there have been a few scholars who have done research about this issue in Asia, for instance, Lu and Lu (2010) from Indonesia,

Wagner-Tsukamot (2009) from Japan and Zhao and Xu (2013) from China, very few

focused on this issue in Vietnam Vitell and Muncy (1992) has strongly urged for further research to look into the ethical beliefs of consumers across cultures and nationalities Since Vietnam has integrated into the global economy but yet remained a very new research site, there is an urgent quest to investigate the ethical judgment of consumers in this emerging

economy in order to fill in the research gap in consumer ethics across cultures

In previous research, personal characteristics that are associated with the consumers’ ethical beliefs and judgments have been paid a lot of attention (Steenhaut & Kenhove, 2006; Swaiden, Vitell, & Rawwas, 2003; Rawwas, 2001) Among those, value consciousness, Machiavellianism, high propensity to take risk, high need for closure, age, and gender have been studied quite often However, Vitell (2003) suggests that ‘‘these as well as other

personality variables should be included in subsequent research studies.’’ Thus, in this study, moral philosophy (including idealism and relativism) and materialism are

investigated as personality characteristics that can influence the ethical beliefs of consumers

in Vietnam Again, since personality characteristics and values are central to ethical

decision making and are influenced by cultural variations, this study on consumer behaviors

in Vietnam has significantly answered the call for more research in different cultures to explore “many different values” and their impacts on ethical decision making (Cherry & Caldwell, 2013; Swaidan, 2012)

Finally, by using instruments that were developed and used widely in Western

cultures, this study also added more value to cross cultural research Thus, achieving a better scientific understanding of consumer’s ethical behavior in Vietnam would be of keen interest to academicians and practitioners

1.3 Research objective

The overall objective of this study is to examine some factors that are associated with consumers’ ethical beliefs Specifically, it investigates:

The relationship between materialism and consumers’ ethical beliefs

The relationship between idealism and consumers’ ethical beliefs

The relationship between relativism and consumers’ ethical beliefs

1.4 Research scope

This study is limited in the investigation of consumers in Ho Chi Minh City,

Vietnam It examines the sample of Vietnamese adults who are above eighteen years old in

Ho Chi Minh City

1.5 Research contribution

In this study, moral philosophy and materialism are investigated as personality characteristics that can influence the ethical beliefs of consumers in Vietnam Therefore, it

is believed to have both theoretical and practical contributions

At the theoretical level, this research contributes to the previous studies in the

literature of consumer ethics study It sheds light on the attitude of ethical consumers in Vietnam, particularly in Ho Chi Minh City, a very new research site Moreover, it provides empirical examination of a U.S.-based research model and instrument on a sample outside

of the U.S., which extends the theoretical application to a broader scope as Vitell (2003) recommended additional cross-cultural studies According to Vitell, 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

At the practical level, this study provides additional understanding into the ethical perceptions of Vietnamese consumers Such an understanding can provide further insight into corporate approaches designed to minimize the adverse impact of unethical behavior (i.e pirating or counterfeiting) on company operations in Vietnam The results of this study can help Vietnamese government and local associations raise awareness and educate the public as well as consumers about unethical consumers’ behavior Ethical consumers’ behavior will positively add more value to the business environment, which can encourage more foreign as well as local investments in Vietnam in the future

1.6 Research structure

This study is organized into five chapters Chapter one starts with the research

formulation Therefore, background of the research, research gap, objective and contribution are mentioned Chapter two reviews and synthesizes the theories in the literature of four concepts, including materialism, relativism, idealism and consumers’ ethical beliefs

Research methodology used to empirically test the research model is also mentioned in Chapter three while Chapter four presents the results of the data analysis The last chapter, Chapter five, discusses the core findings of the study, suggests recommendations and points out some limitations of the research

CHAPTER 2: LITERATURE REVIEW

The purpose of this chapter is to review concepts of consumer ethics and moral philosophies which include idealism, relativism and materialism It discusses previous research concerning the impacts of moral philosophies on ethical beliefs of consumers In this chapter, literature on consumer ethics, idealism, relativism and materialism is presented

In addition, a research model as well as all hypotheses are proposed and discussed

accordingly

2.1 Consumer Ethics

Ethical concerns in business have been extensively studied since the early 1980s In business, the major role of consumers cannot be denied (Vitell & Muncy, 1992) Although consumer ethics research was conducted before 1990 (i.e., De Paulo, 1986; Moschis & Churchill, 1978; Moschis & Powell, 1986; Wilkes, 1978), the majority of such literature has appeared only since 1990 (Vitell, 2003)

Consumer attitudes toward unethical consumer practices have received considerable attention For instance, Vitell addressed this issue with other scholars (e.g., Al-Khatib, Vitell, & Rawwas, 1997; Muncy & Vitell, 1992; Vitell & Muncy, 1992; Vitell et al., 1991; Rallapalli et al., 1994; Rawwas, Vitell, & Al-Khatib, 1994; Rawwas & Singhapakdi,1998; Strutton, Vitell, & Pelton, 1994) In addition, consumer perceptions of unethical consumer behavior have been examined (Fullerton, Kerch, & Dodge, 1996; Muncy & Eastman, 1998; Polonsky et al., 2001; Rawwas, 1996, 2001; Rawwas et al., 1995; Swaidan et al., 2003)

Muncy and Vitell (1992) define consumer ethics as “the moral principles and

standards that guide behavior of individuals or groups as they obtain, use and dispose of goods and services.” Consumer ethics have also been described as the “rightness as opposed

to the wrongness of certain actions on the part of the buyer or potential buyer in consumer situations” (Fullerton et al., 1996) Therefore, consumer ethics refers to the role of ethics in decision-making, including misconduct in the marketplace (e.g shop lifting, failing to

declare undercharging, buying counterfeit goods and downloading pirated digital products)

There are at least three major comprehensive theoretical models (Ferrell & Gresham, 1985; Hunt & Vitell, 1986, 1993; Trevino, 1986) of the decision making process in

situations involving ethical issues in marketing and business, but the Hunt-Vitell model is the only one that can be readily applied to individual consumer behavior (Vitell, 2003) This

is accomplished by eliminating the constructs of professional, organizational and industry environments Thus, the Hunt-Vitell model is the most appropriate theoretical model for testing research questions involving consumer ethics

The pioneering study of Vitell and Muncy (1992) examined ethical beliefs among consumers across a wide spectrum of the population to investigate consumer ethical

judgments and possibly related actors This study developed a consumer ethics scale to determine the extent to which consumers believe that certain questionable behaviors are

‘‘wrong’’ or ‘‘not wrong’’ (i.e., ethical or unethical) Results from 1,900 household heads in the United States led to a four-factor solution:

(1) actively benefiting from illegal activities (e.g., changing price labels in a

supermarket),

(2) passively benefiting (e.g., getting too much change and not saying anything), (3) actively benefiting from deceptive (questionable) practices (e.g., using an expired coupon for merchandise), and

(4) no harm/no foul (e.g., copying and using computer software that the consumer did not buy) (Vitell & Muncy, 1992)

Specifically, their findings revealed that actions in the first dimension are initiated by consumers, most of whom perceive that these actions are illegal The second dimension involves actions where consumers passively benefit from sellers’ mistake The third

dimension is also initiated by the consumers, however these actions are not perceived to be illegal Yet, they are still morally questionable The findings of this study indicated

consumers believe that it is more unethical to actively benefit from an illegal activity than to passively benefit Finally, the fourth dimension involves actions that most consumers

perceive as not even being unethical at all Most of these actions involve the copying of intellectual property such as software, tapes or movies (Vitell, 2003)

Vitell et al (1991) explored the relationship between Machiavellianism and the ethical beliefs of elderly consumers in the United States A consumer ethics scale was

developed that listed various questionable consumer practices Respondents were asked to say whether they perceived a given behavior as being wrong or not wrong, on a 5-point scale The findings revealed that consumers used three major rules to make their ethical judgments: the locus of the fault, the legality of the behavior, and the degree of harm

caused For example, actions that did not cause any harm to the sellers were considered as ethical, and actions that were illegal or initiated by the consumer were considered as

unethical

Moreover, Vitell and Muncy (1992) also examined the influence of personal attitudes

on ethical decision making They found that if a customer had a generally positive attitude towards business, he/she was more likely to behave in an ethical manner Likewise, if the customer equated unethical behavior with illegal behavior, he/she was more likely to apply stricter ethical standards to unethical behaviors Subsequent studies also found that

consumers' ethical decision-making was affected by demographic characteristics and

personalities (Muncy and Vitell, 1992; Rallapalli et al., 1994)

2.2 Moral philosophies and Consumers’ Ethical Beliefs

Moral philosophies are generally classified as either deontological or teleological (Murphy & Laczniak, 1981) While the deontological evaluation focuses on the specific actions or behaviors of the individual, the teleological evaluation stresses the consequences

of the action or behavior Forsyth (1980, 1992) conceptualized two evaluative dimensions to classify an individual’s ethical and moral judgments: idealism and relativism

2.2.1 Idealism

Idealism refers the belief that the right decision can be made in an ethically

questionable situation This is essentially the deontological perspective that embodies

concern for others’ welfare Idealistic individuals believe that there is a morally correct alternative that will not harm others Less idealistic individuals may make decisions

irrespective of the impact on others

Many researchers found that idealism and relativism are important in evaluating ethical discrepancies between individuals (e.g Al-Khatib et al., 1997; Lee & Sirgy, 1999; Rawwas, 2001) Some of these studies have used personal moral philosophies to compare the ethical beliefs of consumers from two or more countries, such as the U.S and Egypt (Al-Khatib et al., 1997); the U.S and Korea (Lee & Sirgy, 1999); Egypt and Lebanon

(Rawwas et al., 1994); Hong Kong and Northern Ireland (Rawwas et al., 1995); the U.S and Turkey (Rawwas et al., 2005); the U.S and Malaysia (Singhapakdi et al., 1999) Other research has used ethical ideology to examine the ethical beliefs of consumers from within one country or culture, including Egypt (Al-Khatib et al., 1995); Japan (Erffmeyer, Keillor,

& LeClair, 1999); Belgium (Van Kenhove et al., 2001); Austria (Rawwas, 1996); Africa (Swaidan et al., 2003); Romania (Al-Khatib, Robertson, & Lascu, 2004); and the U.S

(Vitell et al., 1991) These studies concluded that idealism is associated with greater

ethicality whereas relativism is associated with lower ethicality For example, Erffmeyer et

al (1999) found that Japanese consumers who were more idealistic tended to think that ethically questionable consumer situations were more wrong, whereas relativistic consumers were more likely to perceive these situations as less wrong Similarly, Rawwas et al (1995) found that Hong Kong consumers who score high on idealism were more likely to reject questionable practices compared to Northern Irish consumers who scored high on

relativism Rawwas (1996) and Vitell et al (1991) found that moral philosophy is a

significant determinant of ethical beliefs Al-Khatib et al (1994) concluded that moral philosophies influence perceptions of the ‘rightness’ and ‘wrongness’ of the action under question They found that consumers who score high on idealism are less likely to engage in questionable activities than consumers who score high on relativism Vitell, Rallapalli, and Singhapakdi (1994) found that more idealistic and less relativistic marketers tended to exhibit higher honesty and integrity According to their study, moral philosophies partially explained ethical judgments and deontological norms Thus, the following formal

hypotheses are proposed:

H1a: Idealism is negatively related to beliefs regarding actively benefiting from

illegal actions

H1b: Idealism is negatively related to beliefs regarding passively benefiting at the

expense of the seller

H1c: Idealism is negatively related to beliefs regarding actively benefiting from

questionable but legal actions (deceptive practices)

H1d: Idealism is negatively related to beliefs regarding ‘no harm, no foul’ actions 2.2.2 Relativism

Relativism, on the other hand, refers to the rejection of universal rules in making ethical judgments and focuses on the social consequences of behavior (i.e teleological perspective) From the relativist perspective, ethical behaviors are judged subjectively based

on individual and group experiences High relativists evaluate the current situation and use this as the basis for making a judgment Low relativists believe that standard rules can be applied regardless of the issue at hand According to Ferrell et al (2013), there are three relativist perspectives: descriptive, metaethical, and normative Descriptive relativists view that different cultures have different moral beliefs They believe that there are diverse moral judgments that exist among individuals, societies, and across time However, descriptive relativism seems to ignore important moral similarities across cultures For example, killing innocent people is condemned and prohibited across cultures Metaethical relativists believe that the most justified morality does not exist and suggest that individuals naturally perceive things with their own understanding based on their own perspectives Thus, it is impossible

to come up with an objective way of justifying morality between different value systems and individuals Normative relativists believe that each individual has the right to his or her opinion and that it is morally wrong to use one’s moral principles to judge another person’s moral principles that are different from one’s own

In terms of relativism, research shows that relativism has a negative relation to an individual’s sensitivity to ethical issues (Ferrell et al., 2013) Singhapakdi et al (1999) found that Malaysian consumers with a high score on relativism were more likely to have lower ethical perceptions than those with a low score on relativism Lu and Lu (2010)

concluded that Indonesian consumers with a high level of relativism were likely to initiate

an illegal activity from which they would benefit Additionally, according to the findings of Swaidan et al (2003), African American consumers who scored higher on the relativism scale were more likely to accept questionable activities than consumers who scored lower

on the same scale Therefore, the following formal hypotheses are proposed:

H2a: Relativism is positively related to beliefs regarding actively benefiting from

illegal actions

H2b: Relativism is positively related to beliefs regarding passively benefiting at the

expense of the seller

H2c: Relativism is positively related to beliefs regarding actively benefiting from

questionable but legal actions (deceptive practices)

H2d: Relativism is positively related to beliefs regarding ‘no harm, no foul’ actions

2.3 Materialism and Consumers’ Ethical Beliefs

Materialism involves the importance one attaches to his or her worldly possessions (Belk, 1985; Richins & Dawson, 1992) For a materialist, possessions are central to his or her life in that he or she feels that increased consumption increases his or her satisfaction with life (Fournier & Richins, 1991) Materialism may become a problem in situations where the physical goal of consumption overshadows all other goals of self and interactive development (Belk, 1985; Richins & Dawson, 1992) This does not imply that all material desires are bad In fact, the acquisition of material possessions is a natural, healthy part of one's life However, beyond a certain point, the quest for material possessions may begin to interfere with other important aspects of life At that point, materialism is likely to become

harmful to the person or to society

Barrett (1992) indicated that certain unethical behaviors are associated with higher levels of materialism Belk (1988) asserted that a higher level of materialism with an

inevitable loss of a sense of community might make individuals less sensitive to behaviors that might affect others negatively In collecting possessions (i.e., the major component for

achieving happiness), more materialistic consumers might be willing to compromise ethical

rules to gain possessions (Ferrell and Gresham, 1985; Richins & Dawson, 1992)

The material values scale (MVS) of Richins and Dawson (1992) has been adopted extensively in recent years to examine materialism as a facet of consumer behavior

(Banerjee & McKeage, 1994; Muncy & Eastman, 1998; Pinto & Parente, 2000; Burroughs

& Rindfleisch, 2002) The materialism concept has gained increasing interest in recent years among marketers and researchers (Muncy & Eastman, 1998) Marketers have largely

encouraged materialism, giving rise to ethical and social implications from the perspectives

of both purchasers and sellers (Muncy & Eastman, 1998)

However, ethical issues have not been addressed sufficiently from a consumer

perspective Historically, ethics has been viewed from the seller’s perspective (Rallapalli et al., 1994) Muncy and Eastman (1998) explored whether more materialistic consumers differed in ethical standards from those who were less materialistic According to their results, materialism is negatively correlated with the ethical standards of consumers Martin (2003) examined how materialism and ethics are related among Generation X Those results corresponded to the findings of Muncy and Eastman (1998), in which materialism and consumer ethics were negatively correlated with each other among Generation X

Moreover, recently industrialized countries such as China are apparently becoming more materialistic (Forden, 1993) In addition, some individuals attribute much of the crime in the former Eastern Bloc countries to the materialistic influences of the West (Barrett, 1992) Although higher levels of materialism may accompany greater economic prosperity, it can also produce greater societal problems (Muncy & Eastman, 1998) As materialism promotes self-centeredness, it is likely that individuals with high levels of materialism will be less critical of actions that increase personal possessions (Chowdhury & Fernando, 2013) Thus,

the following hypotheses are suggested:

H3a: Materialism is positively related to beliefs regarding actively benefiting from

illegal actions

H3b: Materialism is positively related to beliefs regarding passively benefiting at the

expense of the seller

H3c: Materialism is positively related to beliefs regarding actively benefiting from

questionable but legal actions (deceptive practices)

H3d: Materialism is positively related to beliefs regarding ‘no harm, no foul’

actions

2.4 The conceptual model and hypotheses of the research:

The research’s aim is to ascertain the relationship of materialism, moral philosophy (relativism and idealism) to consumers’ ethical beliefs The research question to be

answered is whether materialism, moral philosophy (relativism and idealism) relate to consumers’ ethical beliefs in Vietnam The independent variables affecting one’s ethical beliefs are thus materialism, moral philosophy (relativism and idealism) The dependent variable is the consumers’ ethical beliefs

Figure 1 shows the research model of this study

The research hypotheses for this study, therefore, are as follows:

H1c: Idealism is negatively related to beliefs regarding actively benefiting from questionable

but legal actions (deceptive practices)

H1d: Idealism is negatively related to beliefs regarding ‘no harm, no foul’ actions

passively benefiting at the expense of the seller actively benefiting from questionable but legal actions

‘no harm, no foul’ actions

H1 H2

H3

H2c: Relativism is positively related to beliefs regarding actively benefiting from

questionable but legal actions (deceptive practices)

H2d: Relativism is positively related to beliefs regarding ‘no harm, no foul’ actions

H3

H3a: Materialism is positively related to beliefs regarding actively benefiting from illegal

actions

H3b Materialism is positively related to beliefs regarding passively benefiting at the

expense of the seller

H3c Materialism is positively related to beliefs regarding actively benefiting from

questionable but legal actions (deceptive practices)

H3d Materialism is positively related to beliefs regarding ‘no harm, no foul’ actions

Chapter 2 summary:

In summary, this chapter presents theoretical background of each concept in the model Based on discussion of literature review, consumers’ ethical beliefs is assumed to be affected by three factors, namely : relativism, idealism and materialism Such factors are selected to build the model because their relationship has already tested by many previous scholers The next chapter will discuss about methodology that used to analyze the data and test hypotheses of the research model

CHAPTER 3: RESEARCH METHODOLOGY

This chapter presents the research methodology of this study First, it starts with sample description, followed by data collection method and research process Then,

measurement scales are also mentioned

3.1 Sample

The survey was conducted in Ho Chi Minh city This research exploited the

quantitative method (questionnaire survey) to empirically examine the relationship between

materialism, moral philosophy (relativism and idealism) and the consumers’ ethical beliefs

in Vietnam Convenience sampling procedure was also used for selecting and contacting respondents The target respondents were Vietnamese adults in Ho Chi Minh City

In terms of sample size, Haire et al (2009) stated that the minimum sample for appropriate use for statistic analysis is equal to or greater than five times of number of variables, but not less than 100

n>=100 and n>=5k ( k: number of variables)

The model in this study consisted four factors with forty-five variables, thus, the necessary sample size should be: 45*5=225 observations

For Exploratory Factor Analysis, a general rule is that the minimum sample size is to have at least five times as many observation as the number of variables to be analyzed and larger than 100 (Hair et al., 2009) This the minimum sample size by EFA in this research is : n=45*5= 225 observations

Generally, with 45 variables and 3 independent variables, this study required at least

225 observations for running EFA and refression

3.2 Data collection and procedure:

Survey was utilized to collect data for testing the hypotheses The original English questionnaire was translated into Vietnamese and back translated for validity check

purposes Participants were self-completed surveys with most of items measured by point Likert scale The questionnaires were mainly delivered to respondents online using Google Drive in addition to hard copy version A cover letter was also attached explaining the purpose of the study Moreover, informed consent, explanation of study, procedure of

seven-maintaining confidentiality, and detailed instructions on how to complete the questionnaire successfully was included Participants were informed that their participation was voluntary and their responses was utilized for academic research purposes only The author assumed that if the respondents read and proceeded to take the surveys (either hard copy or online), they consent to the survey Moreover, participants were asked to indicate their level of agreement/disagreement with each of the reported statements, then, all distributed

questionnaires were collected by the author once completed For those questionnaires

completed through the Google Drive web link, the data was converted into a database in an SPSS format file for analysis For those questionnaires completed through hard copy

format, the data was entered manually

As mentioned above, the minimum sample size needed for data analysis was 225, hence, for the survey, 390 questionares were distributed directly by paper and indirecctly via Google Drive web link

3.3 Measurement scale

3.3.1 Consumer ethics

In order to evaluate consumers’ ethical beliefs, the Muncy–Vitell scale (MVQ) was used The MVQ was used to measure consumer beliefs which includes 15 statements that have potential ethical implications (Muncy & Vitell, 1992; Vitell & Muncy, 1992) This scale has displayed acceptable levels of reliability in many studies (e.g., Erffmeyer et al., 1999; Muncy & Vitell, 1992; Rallapalli et al., 1994; Rawwas, 1996; Rawwas et al., 1994; Swaidan et al., 2003) Respondents were instructed to rate whether they perceived these

actions as ethically wrong (unethical) or not wrong (ethical) on a seven-point scale

3.3.2 Moral philosophy

Moreover, to assess the moral philosophy (idealism versus relativism) of the

respondents, the Ethical Position Questionnaire (EPQ) was used The EPQ, developed by Forsyth (1980), consists of two scales, each of which contains 10 statements The first scale evaluates idealism and the second assesses relativism The EPQ has been adopted in many ethics studies (e.g., Al-Khatib et al., 2004; Erffmeyer et al., 1999; Rawwas et al., 1994,

1995, 1998; Swaidan et al., 2003; Vitell & Paolillo, 2003; Vitell et al., 1991) Respondents

were instructed to indicate their agreement or disagreement with each item, based on the use of a seven-point Likert scale A high coded score indicates high idealism, while a low coded score indicates low idealism Moral relativism refers to the extent to which

individuals believe that moral rules are not derived from universal principles, but exist as a function of time, culture, and place (Forsyth, 1980)

3.3.3 Materialism

Richins and Dawson (1992) developed a value-oriented materialism scale with three constructs, i.e., acquisition centrality (labeled as ‘‘centrality’’), acquisition as the pursuit of happiness (labeled as ‘‘happiness’’), and possession-defined success (labeled as

‘‘success’’) Several studies have demonstrated further the validity of the materialism scale (e.g., Browne & Kaldenberg, 1997; Chang & Arkin, 2002; Sirgy, 1998) For instance, Chang and Arkin (2002) utilized the scale to evaluate the correlation between materialism and uncertainties in modern life According to this study, some individuals become

materialistic when they experience uncertainty within the self or perceive uncertainty in relation to society Consequently, a short form of materialism, including six items, was adopted to determine how consumer ethics and materialism are related Respondents

indicated their consensus with these six statements on a seven- point scale ranging from strongly agree to strongly disagree

Source of measurememt scale

I Consumer ethics scale (Muncy and Vitell, 1992)

Ethically wrong (unethical) or not wrong (ethical) on a seven-point scale

Actively benefiting from an illegal activity

1 Changing price tags on merchandise in a retail store

2 Drinking a can of soda in a supermarket without paying for it

3 Reporting a lost item as ‘‘stolen’’ to an insurance company in order to collect the money

4 Returning damaged merchandise when the damage is your own fault

Passively benefiting at the expense of others

1 Getting too much change and not saying anything

2 Lying about a child’s age in order to get a lower price

3 Not saying anything when the server miscalculates the bill in your favor

Actively benefiting from a questionable action

1 Stretching the truth on an income tax return

2 Using an expired coupon for merchandise

3 Returning merchandise to a store by claiming that it was a gift when it was not

No harm, no foul

1 Using computer software or games that you did not buy

2 Recording an album instead of buying it

3 Spending over an hour trying on different dresses and not purchasing any

4 Recording a movie on TV

5 Returning merchandise after trying it and not liking it

II Ethical position questionnaire (Forsyth, 1980)

From 1 ‘totally disagree’ to 7 ‘totally agree’

Idealism

1 A person should make certain that their actions never intentionally harm

another even to a small degree

2 Risks to another should never be tolerated, irrespective of how small the risks

might be

3 The existence of potential harm to others is always wrong, irrespective of the

benefits gained

4 One should never psychologically or physically harm another person

5 One should not perform an action that might in any way threaten the dignity

and welfare of another individual

6 If an action could harm an innocent other, then it should not be done

7 Deciding whether or not to perform an act by balancing the positive

consequences of the act against the negative consequences of the act is immoral

8 The dignity and welfare of people should be the most important concern in

any society

9 It’s never necessary to sacrifice the welfare of others

10 Moral actions are those which closely match ideals of the most ‘‘perfect’’

action

Relativism

1 There are no ethical principles that are so important that they should be a part

of any code of ethics

2 What is ethical varies from one situation and society to another

3 Moral standards should be seen as being individualistic; what one person

considers being moral may be judged to be immoral by another person

4 Different types of moralities cannot be compared as to rightness

5 What is ethical for everyone can never be resolved since what is moral or

immoral is up to the individual

6 Moral standards are simply personal rules which indicate how a person should

be- have, and are not to be applied in making judgments of others

7 Ethical considerations in interpersonal relations are so complex that

individuals should be allowed to formulate their own individual codes

8 Rigidly codifying an ethical position that prevents certain types of actions

stands in the way of better human relations and adjustment

9 No rule concerning lying can be formulated; whether a lie is permissible or

not permissible totally depends upon the situation

10 Whether a lie is judged to be immoral de- pends upon the circumstances

surrounding the actions

III Measurement Scale for Materialism (Richins 2004)

From 1 ‘totally disagree’ to 7 ‘totally agree’

1 I admire people who own expensive homes, cars, and clothes

2 The things I own say a lot about how well I am doing in life

3 I like to own things that impress people

4 I try to keep my life simple, as far as possessions are concerned

5 Buying things gives me a lot of pleasure

6 I like a lot of luxury in my life

7 My life would be better if I owned certain things I don’t have

8 I would be happier if I could afford to buy more things

9 It sometimes bothers me quite a bit that I can’t afford to buy all the things I

would like

3.4 Data analysis method:

Various statistical tests were extracted using SPSS 22 First, the validity and

reliability of the scale instrument were checked in the current study using Cronbach’s Alpha analysis and Exploratory Factor Analysis (EFA) The items which were not satisfied the conditions of reliability and validity would be deleted before running regression Finally, multiple regression was used to identify the correlation and measure the impact level of each independent variable to consumers ‘ethical beliefs

Chapter 3 summary:

This chapter described the choice of sample size, measurement scale construction and research method employed to process the collected data A paper-based questionare was developed for data collection, it was distributed directly and email to respodents Main survey had sample size which included total 390 valid questionaires that were used for data analysis with regression method The next chapter will present data analysis results of main survey

CHAPTER 4: DATA ANAYLYSIS

In this chapter, results of study were analyzed and presented with sample n=390 First, respondents’ demographic were analyzed using SPSS Secondly, results of scale validation were presented In this section, the data of this research was evaluated through two steps Step 1 used Cronbach Alpha and Exploratory Factor Analysis (EFA) to examine reliability and validity of the scale measurement In step 2, the researcher employed simple regression to test the three main proposed hypothesis Finally, results of hypotheses testing were also discussed

4.1 Respondents’ demographic

As seen in Table 4.1, majority of respondents were under 36 years old (70%) There were more female (57.2%) than male respondents (42.8%) More than 80% of respondents have a two years of college and/or bachelor degrees This could be explained by the

“golden population structure” of Vietnamese people This population structure indicates that the number of working people exceeds the number of dependant people (Nguyen, 2012)

As a result, young consumers are the key feature of Vietnamese market, with the median age of 30 years (CIA factbook, 2014) More than 25 million of Vietnamese are aged 15-29, representing nearly 28% of total population (HKTDC, 2013) Consequently, the role

of young consumers in family decision making have been growing and their purchasing power has also been increasing significantly (Intage Vietnam, 2011) Many young

consumers actively participate in shopping for their own and their families’ needs Due to the rising purchasing power and significant consumption patterns, the segment of teenagers and young professionals in Vietnam are the target audience of many international

brands.Therefore, young consumers are also the main focus of this study

Two years of college and

4.2 Reliability Analysis

To ensure the reliability of the instrument developed for this research, Cronbach’s Alpha had been conducted as a indicator for internal consistency of scales The Cronbach Alpha test helped to remove unstandardized scale items The value of Cronbach alpha is required to be above or at least equal 0.6 guarantee internal reliability (Nunnally &

Burnstein, as cited in Nguyen, 2011).In addition, the Corrected Item-Total Correlation was also very important Specifically, if the correlation of each specific item with total of the other items in the scale was higher than 0.3, such item was assumed to be correlated with most other scale items and become a good part if this total rating rate (Nunnally &

Burnstein, as cited in Nguyen,2011)

The results of reliability test for each construct in the model were summarized in the Table 4.2 below:

Observed variable Scale mean if

item deleted

Scale variance

of item deleted

Corrected total correlation

item-Cronbach’s Alpha if item deleted

Observed variable Scale mean if

item deleted

Scale variance

of item deleted

Corrected total correlation

item-Cronbach’s Alpha if item deleted

Observed variable Scale mean if

item deleted

Scale variance

of item deleted

Corrected total correlation

item-Cronbach’s Alpha if item deleted

Observed variable Scale mean if

item deleted

Scale variance

of item deleted

Corrected total correlation

item-Cronbach’s Alpha if item deleted

In summary, all seven measurement scales were reliable in measuring the research concepts because they had the Cronbach’s Alpha greater than 0.6 Furthermore, the

Corrected Item- Total correlation of all scale items was also meet the standard (higher than 0.3) This indicated that all scales fit the requirements for reliability As a result, these measurement were used in establishing the main survey to test the research hypothesis

4.3 Exploratory Factor Analysis (EFA)

Exploratory Factor Analysis (EFA) had been undertaken to confirm the construct validity The main aim of EFA was to investigate a large number of relationships among interval variables (Leech et al., 2005) For this study, Exploratory Factor Analysis would be conducted with Varimax rotation in order to take out the items on the same scale but

exposed low loading on the construct This research followed a strict criterion to delete factors that their loadings were lower than 0.5 and the components with Eigenvalue higher than 1.0 were retained

4.3.1 EFA for Independent variables

As shown in table 4.3, KMO value was 0.907 greater than 0.7 (Leech et al., 2005), indicated that there are sufficient items to measure each constructs The Barlett’s test was also significant with the significant values less than 0.05 This also indicated that the

variables were correlated highly enough to become a good basis for factor analysis To sum

up, the diagnostic tests emphasized that date were suitable for factor analysis

Table 4.3

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy .907

The Rotated Component Matrix (see table 4.4) presented the items and factors

loading for factors after rotation, with the acceptable standard of factor loadings was more than 0.5 The total 22 items of four independent variables grouped into these three

components defined by high loading The items in the same construct after rotated also

assembled in only one component with strong loadings and not related to any other

components However, the difference of 0.3 between two components is also acceptable (Materialism 6 and Relativism 9) This showed that the items of each construct were well conceptualized