Consumer Ethics in the EU

ABSTRACT. There is a growing interest in under-standing consumer ethical actions in relation to theirdealings with firms. This paper examines whetherthere are differences between Northern and SouthernEuropean Union (EU) consumers’ perceptions ofethical consumer behaviour using Muncy and Vitell’s(1992) Consumer Ethics Scale (CES). The studysamples 962 university students across four NorthernEU countries (Germany, Denmark, Scotland, TheNetherlands) and four Southern EU countries(Portugal, Spain, Italy, Greece). Some differences areidentified between the two samples, which mightquestion the ability of organisations to consider theEU as one homogeneous market.

KEY WORDS: consumer ethics, cross-cultural, EU,globalization/regionalization

Introduction

The introduction of the Euro moves theEuropean Union (EU) one step closer tobecoming a truly “single” market. However,almost daily there are issues discussed in thepopular press that bring into question the homo-geneity of this market. These problems frequentlyfocus on broad macro issues, such as differencesin political structures or underlying economicconditions that make complete or even substan-tial integration difficult. For example, in early1999 there was discussion relating to the appro-priateness of having a single European interestrate. It was suggested that a low single rate wouldforce those economies that were already growing,such as Ireland, to overheat. On the other hand,a high single rate would result in depressedeconomies, such as Spain, experiencing furthereconomic slowing.

While coordination of governmental policiesamongst the member countries is essential, oneof the major motivations of the European Unionwas to enable expansion of trade amongstmember countries (Blanchard, 1996). Accordingto the EU’s web page the ultimate goal of theEuropean Union “. . . is to promote economicand social progress which is balanced and sus-tainable, assert the European identity on theinternational scene and introduce a Europeancitizenship for the nationals of the Member States(EU, 1999).” That is, the European Union ispartly designed to facilitate the development ofone larger market in which European firms canoperate. However, achieving this benefit comesat a cost. For example, simply establishing a

Consumer Ethics in the European Union: A Comparison of Northern and Southern Views

Journal of Business Ethics 31: 117–130, 2001.© 2001 Kluwer Academic Publishers. Printed in the Netherlands.

Michael Jay PolonskyPedro Quelhas Brito

Jorge PintoNicola Higgs-Kleyn

Michael Jay Polonsky is a Senior Lecturer in Marketing atthe University of Newcastle. His research focuses onStakeholder theory in Marketing, EnvironmentalMarketing, Educational Issues in Marketing,Social/Ethical Issues in Marketing and Cross-Culturalresearch. He has published a number of works in adiverse range of international journals, including twoprevious papers in the JBE.

Pedro Quelhas Brito is an Assistant Lecturer in Retailingat the University of Porto. His research interests focuseson patronage behaviour, decision making and cross-cultural research. He is author and co-author of twobooks.

Jorge Pinto is Assistant Professor of Management at theUniversity of Aveiro. His research focuses on: industrialmarketing and cross-cultural research.

Nicola Higgs-Kleyn is a marketing consultant who lecturespart. Her research interests include marketing ethics,cross-cultural research and marketing strategy. She haspublished a number of papers in international journalsincluding two previous papers in the JBE.

common set of standards within many industriesis something that can only be achieved with theassistance of EU bureaucrats, and requires exten-sive change by firms in most EU countries.

The premise that there are market benefits tothe EU has as an implicit assumption that con-sumers within the member countries behave inthe same or similar way, which is in line withLevitt’s (1983) idea of globalisation, i.e. there isa convergence in consumers’ wants, needs andbehaviours. However, this also assumes thatcultural traits dictating consumer behaviour notonly become similar, but that divergent businesscultures (Harris, 1982) become similar as well.For only when both these types of culturalchange occur can the full benefits of globalstandardization (or in the case of the EU region-alisation) be realised.

Globalisation and regionalisation deal with theintegration of many country strategies within abroader worldwide or regional market ( Jeannetand Hennessey, 1998). Therefore, having region-ally similar consumers assumes that firm behav-iour, as well as customer behaviour, beyondsimple activities such as product preferencesconverge. It also assumes that any differences inthe way that consumers and firms interact arereduced. However, if cultural factors, even subtleones such as the evaluation of friendship, time,space, and possessions (Hall, 1960), are radicallydifferent it will be difficult for organisations tostandardise marketing activities and thus region-alisation may not result in homogeneous marketsor highly integrated marketing strategies andtactics.

Thus, it might be suggested that if consumersbecome more similar as Levitt (1983) suggested,then cultures and consumption will also have tobecome more similar, which will reduce theinfluence of cultural interpretation of situations(i.e. high context) and thus in the long-run highcontext cultures should disappear. Given thatHofstede (1994) found there were a range ofdifferent cultures in Europe, it is unlikely thatconsumer’s behaviour across the European Unionwill become similar overnight, if at all andcomplete regionalization may not be achievablein the short term or even medium term.Therefore, firms need to be concerned with the

way that they interact with consumers, as wellas other businesses, which are also influenced bynational culture (Harris, 1982).

This paper focuses on examining one aspectof consumer – firm interaction, that of consumerunethical behaviour in relation to businesstransactions using Muncy and Vitell’s (1992)Consumer Ethics Scale (CES). Rather thanexamine consumers within individual countries,this study will group consumers into those inNorthern EU countries (Germany, Denmark,Scotland, The Netherlands) and Southern EUcountries (Portugal, Spain, Italy, Greece).Students at universities are used as a proxy forconsumers in general. While this might besomewhat artificial, in many of the cross-culturalstudies student samples are used as a proxy for“future” managers and while students maybecome business leaders in the future, they areconsumers today, and as such they are a repre-sentative sampling frame. In addition, usingstudents as respondents assures homogeneity interms of age and educational level, as well asacademic interests. This enables comparisons tobe made free of moderating factors other thanculture (Waller and Polonsky, 1999). The researchquestion examines whether there are differencesbetween Southern and Northern EU consumersusing Muncy and Vitell’s (1992) 4 CES con-structs.

The following background section discussesthe rationale for examining consumer ethics andfor focusing on the Northern – Southern EUdistinction. The methodology section thenfollows, examining the consumer ethics scales,sampling techniques and the analytical methodsused. Analysis and discussion of the results, lim-itations and future research, and conclusionsfollow.

Background

Consumer focus

Much of the business/marketing ethics literaturehas focused on the buyer – seller dyad (Brennerand Molander, 1977; Vitell and Festervand, 1987)or the employer – firm relationship (Al-Khatib

118 Michael Jay Polonsky et al.

et al., 1997). Such an emphasis might beexplained by the fact that the “marketingconcept” traditionally considers how organisa-tions can better deal with customers. As such, itis traditionally assumed that firms have themajority of power in the relationship andtherefore, consumers need to be protected. Thispresumption has resulted in countries around theworld developing a range of regulations toprotect consumers from such corporate abuses.

The result of adopting this perspective hasbeen that within the ethics literature there hasbeen less examination of the ethical behaviourson the part of consumers in relation to firms,rather than the traditional firm-consumer per-spective. For example, Al-Khatib et al. (1997)suggests that in the early 1990’s there werelimited “. . . studies exist that have examinedthe consumer’s perspective (to ethics in the marketplace), and most of these studies focused onvery specific and limited situations such asshoplifting” (p. 750 emphasis added).

Some studies of consumers’ attitudes towardsunethical consumer practices have been under-taken. In particular, Vitell has examined this issuewith a number of co-researchers (Al-Khatib etal., 1996, 1997; Muncy and Vitell, 1992;Rallapalli et al., 1994; Rawwas et al., 1998;Rawwas et al., 1994; Strutton et al., 1994; Vitellet al., 1991; Vitell and Muncy, 1992). This is notto suggest that others have not considered thisissue as well, for a range of other authors havealso examined consumers’ perceptions ofunethical consumer behaviour (Chan et al., 1998;Higgs-Kleyn, 1998; Fullerton et al., 1996;Muncy and Eastman, 1998; Rawwas et al., 1995;Rawwas, 1996; Wilkes, 1978). The majority ofthe empirical works in this area have appliedversions of Muncy and Vitell’s (1992) ConsumerEthics Scale (CES).

While the CES was initially developed in theU.S. it has been widely applied in a range ofsingle country and cross-cultural studies and thusis appropriate for further examination within thispaper. Some of the countries examined include;Austria (Rawwas, 1996), Egypt (Al-Khatib et al.,1995, 1997; Rawwas et al., 1994), Hong Kong(Chan et al., 1998; Rawwas et al., 1995), Ireland(Rawwas et al., 1995; Rawwas et al., 1998),

Lebanon (Rawwas et al., 1994; Rawwas et al.,1998) South Africa (Higgs-Kleyn, 1998), as wellas the U.S. (Al-Khatib et al., 1997; Muncy andEastman, 1998; Muncy and Vitell, 1992;Rallapalli et al., 1994).

Muncy and Vitell’s (1992) original ConsumerEthics Scale (CES) was developed in the U.S.over several years using a range of items that wasrefined, reduced and validated to consist of 18items examining a range of “questionable”consumer behaviours in relation to their dealingwith firms (Al-Khatib, 1997). Although many ofthe non-U.S. studies have omitted or added itemsfor cultural reasons (i.e. the items were deemedto not be applicable in these cultures or othersthat were deemed to be more applicable wereadded within other cultures). Muncy and Vitell’s(1972) original items identified that there werefour distinct constructs or categories of ethicallyquestionable consumer behaviour and these havebeen consistently found to be reliable acrosscountries.1 The constructs are labeled as:

• Proactively Benefiting at the Expense of theSeller. These situations are initiated by con-sumers, who perceive the act to be illegal;

• Passively Benefiting at Expense of the Seller.These situations result from seller’s mistakes,which are not corrected by consumers.

• Deceptive Practices. These situations areinitiated by consumers, who do notperceive the act to be illegal.

• No Harm/No Foul. These are situations thatconsumers perceive result in little if anyharm to the seller.

Many of the works using the Consumer EthicsScale have also examined how a range of othervariables moderate and/or explain differences inconsumers views. For example, Al-Khatib et al.(1997) used the CES to profile U.S. and Egyptianconsumers and examine the role of respondent’sethical beliefs, preferred ethical ideology, andtheir degree of Machiavellianism, which can bedefined as a kind of cool detachment that makesindividuals less emotionally involved with others.Other earlier studies of consumer ethical attitudesfocused on more narrowly defined moderatingand/or explanatory factors including demo-graphic variables such as age, gender, education,

Consumer Ethics in the European Union 119

race, income and social class (Higgs-Kleyn, 1998;Rayburn and Rayburn, 1996; Strutton et al.,1997) and personal characteristics (Wilkes, 1978;Mayo and Marks, 1990; Strutton et al., 1994;Vitell and Murcy, 1992; Rallapalli et al., 1994).

For the most part CES studies have focused onfactors within one society and have tried todetermine how these “other” variables interactwith consumers’ attitudes towards ethical prac-tices on their part. The few cross-cultural studiesthat exist have usually chosen to look at diver-gent markets, to determine if differences orsimilarities in the various relationships exist.For example, Al-Khatib et al. (1997) examinedwhether Egyptian and U.S. consumers’ perceivedconsumer ethical situations differently (i.e.responded to the CES differently). The rationalefor selecting these two economically and cultur-ally divergent countries, was that they wanted tobroadly examine whether the relationshipsexamined held in diverse cross-cultural settings.

Other cross-cultural works have tried toexamine countries that have more “similarities”,for example Rawwas et al. (1995) choose to lookat Northern Ireland and Hong Kong as these twomarkets have British/U.K. links and thus mighttherefore have some common underlying values.An examination of Egypt and Lebanon (Rawwaset al., 1994) and Ireland and Lebanon (Rawwas,1998) was also undertaken to focus on countriesthat had similar environments, that of war and/orunrest.

While there is an appropriate justification forexamining these pairs of countries, it could besuggested that researchers should also focus theirexamination on pairs or multiple countrieswithin one trading block or market, such as theEU, NAFTA or CIS. It might be assumed thatcountries within such trading blocks shouldpossibly be more similar than countries inmarkets that are not formally “integrated”. If anydifferences occur, the examination of ethicalvalues would be even more pertinent to organ-isations operating within these regions, as theywould be operating within a heterogeneous“unified” market. As such the study describedin this paper attempts to focus this work on onemarket. However, rather than examine differ-ences between “countries” within one trading

block, the EU in this case, which may or maynot reflect “one” set of cultural values, this studyexamines broader regional groupings intoNorthern and Southern Europe, the rationale forwhich is discussed below.

North/South rationale

Some writers have suggested that Europe needsto undergo a process of cultural change, such thatthere is a common identity as well as a commonmarket (Moller, 1993; Seed, 1993). Such a per-spective seems to be a utopian ideal, ignoring therealities of “combining” independent states whohave different political traditions, histories (eventhough they are often related), cultures, and insome cases even values (Bohata, 1997).

When thinking about differences in today’sEurope, many think in terms of the problemsassociated with joining countries that have devel-oped under capitalistic markets, i.e. WesternEurope, and those that have evolved under acontrolled system, i.e. Eastern Europe(Anonymous, 1993; Ballew and Schnorbus, 1993;Dale, 1995). While the previously controlledEastern economies have been open to competi-tion for several years, there are still extensivedifficulties making the shift to full capitalism.This is not to suggest that there are no differ-ences or difficulties associated with businessactivities within Western capitalist markets, asthese may exist as well. For example, research hasfound that there are differences in corporatepractices, such as corporate codes of ethics,within the developed capitalist markets ofWestern Europe (Langlois and Schlegelmilch,1990). While this is only one business practice,there is other evidence that there may be otherdifferences within Western EU countries thatmakes full European integration “difficult”,ignoring the problems associated with the East– West differences (Grimond, 1995).

While the East – West distinction involvesimportant regional differences, there is a mucholder Northern – Southern division withinEurope, which relates to overall economic devel-opment and growth that should also be consid-ered (Wood, 1995). That is historically, Northern


countries/regions have tended to be moreindustrialized and Southern countries and regionshave been more agrarian (Loxley, 1998). In fact,the differences between Northern and Southernregions have been discussed within individualEuropean countries (Cagliozzi, 1991), as well asbetween Northern and Southern regions ofEurope (Wood, 1995).

In terms of ethical differences between the tworegions (Northern and Southern Europe) VanLuijk (1997) has suggested that “. . . businessethics in Northern and Western Europe haveacquired a certain momentum during the last 15years . . . (p. 1579)”, which, may seem to suggestthat within Southern and Eastern Europebusiness ethics has been slower to “catch on”.2

Wood (1995) also suggests that there are gener-ally, important ethical differences between highlyindustrialized countries of the North and lessindustrialized and developing countries of theSouth. Although Wood’s examined business tobusiness transactions in the purchasing and salesinterface, it might be inferred that consumerethics would also be different in Northern andSouthern economies, especially if Southerncountries are considered to be less developed. Forexample, Rossouw (1994) suggests that thegeneral inclusion of ethics into business practicesin developing countries may be difficult andPriem et al. (1998) and Al-Khatib et al. (1995,

1997) found that there are differences in themoral judgements and values of consumers’ indeveloped and developing “Westernised” coun-tries.

While Southern EU countries are not tradi-tionally considered to be “developing nations,”an examination of various socio-economiccharacteristics frequently used to examine devel-oping countries (Thirlwall, 1989), identifies thatSouthern EU countries do tend to be “different”as compared to their Northern EU counterparts,although the distinctions are sometimes blurred(see Table I).

Table I provides a list of selected socio-economic data from the United Nations andWorld Bank. As can be seen Southern countriesgenerally have; slightly lower population growthrates, lower per capita income; fewer years ofschooling, higher infant mortality rates and lowerproportions of their population live in urbanareas. All of these factors, other than lowerpopulation growth suggests that Southern EUcountries are “less” developed than theirNorthern neighbors. However, these differencesare not universal across countries within theregions. For example, in terms of populationgrowth Greece’s population growth is more“similar” to Northern EU countries and Scotlandis more “similar” with Southern EU countries.In the case of per capita income Italy’s figure is


TABLE ICountry socioeconomic characteristics

REGION/ Population growth Per capita Years Infant % of urban Country 1991–1997b GNP 1997a schoolinga mortalityb populationb

SOUTHGreece 0.4 11,673 13.8 8 60Italy 0.2 21,219 NA 7 67Portugal 0.1 10,923 14.3 7 37Spain 0.2 14,641 15.5 5 77

NORTHDenmark 0.4 33,387 14.6 5 85Germany 0.4 28,728 15.1 6 87The Netherlands 0.6 25,426 15.5 6 89Scotland (U.K.) 0.3 19,847 16.3 6 89

Based on United Nationsa and World Bankb figures 1998.

more “similar” to Northern countries and forunemployment Portugal’s rate appears to be more“similar” to the Northern countries. In regardsto education Spain’s mean years of schooling ismore “similar” to the Northern EU countriesas is its infant Mortality rate.

Assuming that there are differences betweenregions and that Woods (1995), Van Luijk (1997)and Priem et al. (1998) are correct, this wouldbroadly support the idea that there are also likelyto be differences in Northern and Southern EUconsumers’ ethical perspectives. Which if truewould mean that firms dealing throughout theEU would be interacting with consumers whohave differing ethical outlooks. Although, it isrecognised that while Table I seems to suggestthe Southern countries are “less developed” thantheir Northern counterparts, it is unclear if theyfit into the traditional definition of “developing”nations.

Methodology

The focus of the study is to examine the hypoth-esis that consumers in Southern and Northernregions of the EU have similar views towardswhat could be considered permissible or unac-ceptable consumer behaviour. This can be furtherbroken down into four sub-hypotheses relatingto differences between the regions for each of thefour dimensions of the CES; ProactivelyBenefiting at the Expense of the Seller; PassivelyBenefiting at Expense of the Seller, DeceptivePractices, and No Harm/No Foul.

The data used in this study was collected fromstudents studying business in 8 EU countries,four from Southern EU countries – Italy,3

Portugal Greece and Spain – and four fromNorthern EU countries – Scotland, Denmark,The Netherlands and Germany. The sampleincludes all EU countries from Southern Europe,which also includes the one Southern foundingmember, Italy. The Northern countries werechosen to represent a broad cross section ofNorthern EU members and were selected fromthe founding members, Germany and theNetherlands, and two of those who joined in1961, Denmark and Scotland (as a proxy for the

U.K.). Some countries were explicitly excluded.For example it was decided not to include Francebecause of its cultural diversified characteristicsand geographical position, i.e. it borders sevenother European countries make difficult toclassify it as a northern or a southern country(Mermet, 1991). The selection of specific uni-versities was undertaken in pragmatic convenientmanner, i.e. the authors relied on the generosityof their academic contacts within each of thecountries who assisted with the data collection.If universities or particular degrees are notrepresentative, then there could be some responsebias introduced, although this is not believed tobe the case.

Using students samples was not deemed initself to introduce bias, as it has been suggestedthat within cross-cultural research that studentsare relatively homogeneous and thus studentsamples enable researchers to control for a rageof moderating factors, such as age, educationlevels, etc. (Waller and Polonsky, 1999). Inaddition much of the literature examiningbusiness ethics and more specifically CES basedconsumer ethics, has used student samples (Chanet al., 1998; Higgs-Kleyn, 1998; Muncy andEastman, 1998; Rallapalli et al., 1994). Inaddition, students are consumers and thus at theextreme the sample would be representative of asegment of the wider population. However,given that they have been used extensively as aproxy for consumers, the sampling frame is notconsidered to be a major limitation.

The CES survey instrument was translatedfrom English to the host county language andback translated from the host language to Englishwhen necessary, using the original CES instru-ment to ensure linguistic consistency. Although,it should be noted that cultural differences couldhave impacted on the relevance within eachculture (i.e. functional equivalency may notexist). Table III provides the English wording ofMuncy and Vitell’s (1992) original items, whichwere used in the English version of the instru-ment. The CES questionnaire was a self-admin-istrated questionnaire to undergraduate studentsfrom each of the countries, there were 962respondents in total (See Table II for a break-down by region/country). The sample is region-


ally balanced with approximately 50% of respon-dents from each region, however the composi-tion of each region is not proportional to thecountry populations within the EU. The distri-bution of ages (mean 20.7 years) and gender(52.8% male) were similar within regions andacross regions. Overall there was an 8.1% non-response rate and 2% of the surveys wereexcluded from analysis because they were incom-plete, resulting in an effective response rate of89.9%.

Within the literature a range of versions of theCES scale have been utilised (Al-Khatib et al.,1995, 1997; Higgs-Kleyn, 1998). As was men-tioned earlier, adjustments were made to itemswhen it was deemed that they did not havecultural relevance. Within this study a 17-item


TABLE IISample distribution amongst regions and countries

REGION/ No. of Percentage totalCountry respondents (Region)

SOUTH 478 49.68% (100%).Portugal 123 12.8% (25.73%)Spain 085 08.8% (17.78%)Italy 123 12.8% (25.73%)Greece 147 15.3% (30.75%)

NORTH 484 50.31% (100%)Germany 095 09.9% (19.63%)Denmark 156 16.2% (32.23%)Scotland 140 14.6% (28.93%)The Netherlands 093 09.3% (19.21%)

Total 962 100%

TABLE IIIConsumer ethics scale items

Scale: 1 – Strongly believe it is wrong; 5 – Strongly believe it is not wrong

Actively Benefiting From Illegal Activity• Changing price tags on merchandise in a retail store • Drinking a can of cola in a supermarket without paying for it• Reporting a lost item as “stolen” to an insurance company in order to collect the money• Giving misleading price information to a clerk for an unpriced item (Initially loaded on

PassivelyBenefiting and was omitted from analysis)

• Using long distance code that does not belong to you (Not included in this study but included inoriginal CES instrument under this construct)

Passively Benefiting• Getting to much change and not saying anything• Lying about a child’s age in order to get a lower price• Not saying anything when the waitress miscalculates the bill in your favour• Moving into a new residence, finding that the cable TV/telephone is still hooked up, and using it rather

than signing up and paying for it (Initially loaded on Actively Benefiting From Questionable Action andwas omitted from the analysis)

Actively Benefiting From Questionable Action• Using a coupon for merchandise you did not buy• Using an expired coupon for merchandise• Not telling the truth when negotiating the price of an old automobile• Lying about your income on a credit application form

No Harm/No Foul• Using computer software or games that you did not buy• Recording a compact disc/album instead of buying it• Returning merchandise after trying it and not liking it• Spending over an hour trying on different dresses/items of clothing and not buying any• Tapping a movie of the television

version of Muncy and Vitell’s CES (consumerethics scale) was used. The items evaluate con-sumers responses to various ethical issues using afive point likert scale with 1 indicating thatrespondents “Strongly believe it is wrong” and5 indicating that they “Strongly believe it is notwrong”. Thus a mean response of less than 2.5indicates that respondents feel the practice isunacceptable, whereas a mean response of greaterthan 2.5 indicates that respondents feel theactivity is acceptable. This type of scale was alsoused in Muncy and Vitell’s (1992) original study,as well as in the other CES studies.

A factor analysis was undertaken using theSPSS Varimax with Kaiser normalisation proce-dures to reduce these survey items into a smallerset of underlying variables that measure the sameconstruct (SPSS, 1990). This process is designedto allow researchers to combine variables, suchthat they “. . . capture the ‘essence’ of the data”and summarise the meaning of these underlyingfactors or composite variables (Churchill, 1991,p. 896). The variables within the factors werethen examined for reliability to further ensurethat the items measured the same construct.Composite variables were then calculated (i.e.


TABLE IVFactor structure of CES (The rotated loadings using a 0.45 cut-off)

Actively Actively benefiting Passively No harm/benefiting from from questionable benefiting No foulilleg alactivity action

Changing price tags on merchandise ina retail store 0.737999

Drinking a can of cola in a supermarketwithout paying for it 0.706275

Reporting a lost item as “stolen” to an insurance company in order to collect the money 0.639402

Getting to much change and not saying anything 0.766107

Lying about a child’s age in order to geta lower price 0.494624

Not saying anything when the waitress miscalculates the bill in your favour 0.781575

Using a coupon for merchandise you didnot buy 0.665328

Using an expired coupon for merchandise 0.679587Not telling the truth when negotiating

the price of an old automobile 0.532718Using computer software or games that

you did not buy 0.555785Recording a compact disc/album instead

of buying it 0.647924Returning merchandise after trying it

and not liking it 0.506638Spending over an hour trying on

different dresses/items of clothing and not buying any 0.561895

Tapping a movie of the television 0.71073Lying about your income on a credit

application form 0.573365

responses added and averaged) based on theirfactor grouping (i.e. solution). An analysis ofvariance (ANOVA) was then used to comparewhether these composite variables differedbetween the two regions, i.e. Northern andSouthern EU.

Analysis and discussion

The factor analysis identified four factors, whichwere generally consistent with the previousresearch using the CES. While at first this seemedto support the global generalisability of the CESscale, a detailed examination of the four con-structs identified that two variables loaded (i.e.were associated with a specific factor) in aninconsistent fashion, i.e. they were associatedwith different types of ethical behaviour than hadbeen reported in previous CES research. Therewas no rationale for these inconsistent associa-tions and their inclusion would have “diluted”the focus of the constructs. As such these twoitems were removed, which ensures broader con-sistency with previous CES works and enablessome direct comparisons with these works to beundertaken.

The remaining items were factor analysedagain and resulted in four factors, whichexplained 51% of the variance in the data andwhich were also “consistent” with previous CESresults, i.e. Actively Benefiting From IllegalActivity, Passively Benefiting, Actively BenefitingFrom Questionable Action, No Harm/No Foul.

The reliability of constructs was examined,using Cornbach’s Alpha to determine if the itemscould indeed be added into one construct

(Churchill, 1991). As can be seen in Table V, thereliability of the constructs for the total sampleand the two sub-groupings appears to be lowerthan in some of the previous CES studies, whichhave reported Alpha’s for the four constructs ofgreater than 0.8 (for example Rallapalli et al.,1994). However, the Alpha’s of individual con-structs have also been found to be lower than 0.8in some studies, especially those undertakenoutside the U.S. For example, when examiningEgypt, Al-Khatib et al. (1995, 1997) and Rawwaset al. (1994) reported that the No Harm/No Foulconstruct had an Alpha of less than 0.50. Otherstudies have also reported Alpha’s lower thanthose in this study including the PassivelyBenefiting construct which was less than 0.6 inLebanon (Rawwas et al., 1994) and Hong Kongand Northern Ireland (Rawwas et al., 1995).

The reliability of the four constructs alsoappears to differ across the Northern andSouthern EU samples, with the constructs being“more” reliable (i.e. higher Alphas) for theSouthern countries than the Northern EUsample. Finding differences in Alphas whenexamining multiple countries/samples is alsoconsistent with other results (Al-Khatib et al.,1997; Rawwas et al., 1994; Rawwas et al., 1995).One possible explanation for difference in relia-bility might be that there are minor differencesamongst consumers within each region, althoughthere do not appear to be substantial differencesbetween regions for three of the four constructs.

These reliability results were somewhatunanticipated, given that the CES instrument hasbeen rigorously tested, including studies that haveexamined CES in European countries, i.e.Austria (Rawwas, 1996) and Ireland (Rawwas et


TABLE VReliability test of CES for southern and northern EU groupings

Total Southern EU Northern EU

Construct Alpha Alpha Alpha

Actively benefiting from illegal activity (3 items) 0.4060 0.6170 0.3214Passively benefiting (3 items) 0.6783 0.7227 0.6390Actively benefiting from questionable action (4 items) 0.5535 0.5745 0.5258No harm/no foul (5 items) 0.5384 0.5657 0.5395

al., 1995; Rawwas et al., 1998). Thus, futureresearch might examine the global generalisabilityof CES measurements. Based on this study andother non-U.S. studies it is unclear whether theCES is generalisable.

Composite item scores were calculated foreach construct by adding the relevant items (seeTable III) and calculating the mean score for thefour constructs for each individual. The overallmean response for each construct within eachregion was then calculated. The regional meanvalues were compared using an analysis ofvariance (i.e. ANOVA). The results of theANOVA are presented in Table VI and can beused to evaluate the sub-hypotheses related to thefour components of the CES.

Before examining the ANOVA results it isworth noting that the ordinal ranking of per-ceptions relating to a construct being perceivedas wrong is consistent across the two groupings.That is Actively Benefiting From Illegal Activity isperceived to be most inappropriate (i.e. wrong)by both groups, followed by Actively BenefitingFrom Questionable Activity, Passively Benefiting, andlastly No Harm/No Foul. This suggests that active“questionable” behaviour on the part of con-sumers is perceived to be less appropriate thanpassive (i.e. non-active) questionable behaviour.While this makes intuitive sense, other studieshave found different ordinal rankings of theconstructs (Al-Khatib et al., 1997). It is alsoworth noting that the two constructs relating toActively benefiting were both perceived to be“inappropriate” as they had a mean value of lessthan 2.5, which is consistent with other non-U.S.CES studies (for example Al-Khatib et al., 1995,1997).

In examining the ANOVA results in Table VIit can be seen that there are statistical differencesbetween the regions for two of the CES con-structs dealing with “Actively Benefiting” fromeither an illegal or questionable activity, althoughas mentioned above respondents in both regionsperceive these issues to be “wrong”. There areno statistical differences for the two constructsexamining non-active behaviours (i.e. PassivelyBenefiting, No Harm/No Foul), and thus, overallthere is a statistical difference in terms of per-ceptions toward active consumer behaviour butnot “passive” consumer behaviour.

While there are statistical differences for thetwo Active constructs the direction of thesedifferences is not consistent. That is, Southernrespondents perceived that Actively Benefiting FromIllegal Activity is statistically less appropriate thantheir Northern counterparts, whereas Northernrespondents perceived that Actively Benefiting FromQuestionable Activity is statistically less appropriatethan their Southern counterparts. However, inboth cases these statistical differences reflectrelatively minor differences in absolute terms (i.e.0.07 and 0.08 respectively).

As such, while there are some statistical dif-ferences between the two regions, respondents inboth broadly perceived issues in similar ways.This finding is somewhat inconsistent with theprevious literature as Wood suggested thatNorthern, highly industrialised regions, wouldbe more likely to perceive a range of “question-able” ethical activities more negatively, whichdoes not occur in this study.

The fact that Northern respondents were lessconcerned with “illegal” activities and moreconcerned with “questionable” activities than


TABLE VIExamination of the difference in CES components between southern and northern EU

Southern EU Northern EU

Construct Mean (Std) Mean (Std) F-Value Significance

Actively benefiting from illegal activity 1.84 1.91 9.65 0.002Passively benefiting 2.93 2.91 2.29 0.131Actively benefiting from questionable action 2.09 2.01 15.59 0.000No harm/no foul 4.02 4.08 1.13 0.288

their Southern counterparts, might reflect thefact that the context (i.e. specific situation) of theactivity may play a more important role in theevaluation of the situation. If one assumes that“less developed” countries have a higher context,then the ethical evaluation of the specific situa-tion would depend on the specific circumstances,such as whether the individuals being “harmed”know the individual (Dawson, 1997). Somequestionable activities may be inappropriatebecause of the parties involved and could requirea more contextual (i.e. situational) evaluation ofconsumer ethical situations. For example thereare substantially more retailers in Southern EUcountries, which are also most likely to besmaller (See Table VII). Thus, Southern EUconsumers may associate harming firms withharming individuals. Whereas Northern EU con-sumers may perceive harming firms as harmingfaceless corporations. If this is the case, devel-oping relationships with individuals could assistin minimising the occurrence of intentionalharm.

Limitations and future research

As with any study there are a number of limita-tions that need to be highlighted. Firstly, is the

fact that the reliability of the four factors of theCES were lower than might have been expected.While the CES has been used outside the U.S.A.on several occasions, it might be that these itemsare not as globally generalisable as one wouldhave hoped and more research into the cross-cultural validity of the scale needs to be under-taken. A second limitation relates to the sampleused. While it is deemed that students are asuitable sample for consumer studies, they mayin fact represent a narrow demographic segmentof the population. In fact, it is often suggestedthat students tend to be more similar across-countries and as such there might be morevariation between different sub-samples and/orfrom the wider population.

Future research could attempt to have morerepresentative sub-samples across each region,both in terms of ages and in terms of overallpopulation (i.e. a stratified sample). A relatedissue is that the respondents within each of theregional sub-samples were collected at onelocation in each country and while students dofrequently travel, any regional differences withincountries may have been underestimated. Not allNorthern EU countries were included and thusfuture researchers might try to include sub-samples from all existing member countries andpossibly from proposed members as well, whichwould also broaden the Southern sample. Finally,future research might consider the impact ofother factors such as the relationship between theconsumer and the firm, to identify whether thisimpacts on consumers’ ethical behaviour.

Conclusions

The main differences between Northern andSouthern EU consumers relates to the way inwhich they perceive actively benefiting fromillegal and questionable activities. Any differencesin consumers’ undertaking proactive “unethical”behaviour would have substantial implications fororganisations, as they would need to establishdifferential monitoring systems and procedures topreclude these proactive activities occurring inthe two regions. However, given the small dif-ferences in terms of consumers’ views, this might


TABLE VIIRetail outlets per 1000 inhabitants

REGION/ Retailers (outlets) perCountry thousand inhabitants

SOUTH Greecec 12.3Italyd 25.3Portugalc 12.5Spaina 11.2

NORTHDenmarkd 7.8Germanyd 5.0The Netherlandsd 6.5Scotland (U.K.)b 5.4

Figures based on Corporate Intelligence on Retailingfigures 1988,a 1992,b 1994,c 1995.d

suggest that differing monitoring mechanisms arenot needed in Northern and Southern EUcountries. Therefore, even though Southerncountries appear to be “less” developed, they donot exhibit the ethical characteristics of devel-oping countries as suggested in the literature(Priem et al., 1998; van Luijk, 1997; Wood,1995).

While there are some differences in consumersattitudes it is unclear if these are sufficientenough to warrant broad based segmentation inaction, either on the part of business or legisla-tors trying to regulate ethical behaviours. Ittherefore appears that the EU is broadly a unionof consumers markets, at least in terms of thecontext of this study, as well as a union ofeconomic markets. This might suggest thatwithin Europe there is some “standardization” ofconsumer views, which would support Levitt’s(1983) view that consumer are becoming moresimilar, thus potentially allowing for a broaderglobalization of corporate activities, includingmarketing activities.

However, in considering more global com-parisons, at least based on the previous research,there do appear to be some substantial differencesacross countries/regions. These differences arenot only reflected in different perceptions of thefour CES constructs, but also in the way thateach of the constructs is measured. Thus, froma pure cross-cultural perspective it could beargued that there might be little functional ormetric equivalency. As such, real global compar-isons might require refining of the CES instru-ment, to identify globally generalisable items,which would ensure that national or regionalcomparisons measure the four constructs consis-tently. As was identified in the limitations andfuture research section, this is one important areathat can be further investigated in the future.

Acknowledgements

We would like to thank Cleopatra Veloutsou,Peder ÿstergaard, Gerhard Bosch, VeroniqueJaeger, Marc Ficsher, Jesus Rosel, K. R. E.Huizingh, Francesca Bettio, Manuel Luis Costa,Margarida Ruivo, Pilar Gonzales and Fernando

Almeida for assisting us with translating, distrib-uting and collecting the survey, as well as JohnStanton who provided feedback to earlierversions of the paper.

Notes

1 This occurs even after cultural adjustments havebeen made to items.2 This does not mean that less developed Southerncountries have not developed business ethics or thatBusiness ethics is a 20th century “discovery”, for some“not so developed” Southern EU countries had well-developed concepts of business ethics for extensiveperiods.3 The Italian university was based in south centralItaly.

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Consumer Ethics in the EU