Moral intensity and ethical decision-making of marketing professionals

ELSEVIER

Moral Intensity and Ethical Decision-Making of Marketing Professionals Anusorn Singhapakdi OLD DOMINION UNIVERSITY

Scott J. Vitell UNIVERSITY OF MISSISSIPPI

Kenneth L. Kraft UNIVERSITY OF TAMPA

Ethical decisions are often situational or issue-related. This study represents an initial attempt to investigate the impact of the intensity of a moral issue on two important components of marketing ethics decisions: perceptions of an ethical problem and intentions. The aspects of moral intensity investigated are the magnitude of consequences, social consensus, the probability of effect, temproal immediacy, proximity, and the concentration of effect. The research hypotheses regarding the influences of each of these aspects of rnoral intensity on the marketers' ethical perceptions and intentions were formulated and tested. It was hypothesized that the influences of the different aspects of moral intensity on a marketer's ethical perceptions and intentions would be positive. Four marketing ethics scenarios were utilized as situations for measuring moral intensity, ethical perceptions, and ethical intentions. This study utilized a mail survey of 453 U.S. members of the American Marketing Association. The findings, based on regression analyses, support nearly all of the hypotheses relating the six aspects of moral intensity to ethical perceptions and intentions of marketers. Generally consistent with previous ethical theories, a marketers decision-making process appears to be influenced by situation-specific issues such as the moral intensity of the situation. j BUSN RES 1 9 9 6 . 3 6 . 2 4 5 - 2 5 5

oncern for ethical issues in marketing has dramatically increased over the last decade and, as a result, researchers have shown an intense interest in moral issues. For example, there have been several attempts to develop theoretical models in the marketing ethics area (e.g., Ferrell and Gresham, 1985; Hunt and Vitell, 1986; Dubinsky and Loken, 1989; Ferrell, Gresham, and Fraedrich, 1989; and Hunt and Vitell, 1993). These theoretical models have led to the empirical

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Addresscorrespondenceto Anusorn Singhapakdi,AssociateProfessorof Marketing, College of Business& Public Administration, Old Dominion University, Norfolk, VA 23529-0220. Journal of BusinessResearch36, 245-255 (1996) © 1996 ElsevierScience Inc. 655 Avenue of the Americas, New York, NY 10010

testing of the ethical decision-making processes of marketing professionals. The first test of the Hunt-Vitell model was conducted by Vitell and Hunt (1986, 1990) with a focus on the impacts of deontological and teleological factors on ethical judgments and intentions. Also testing the Hunt-Vitell model, Mayo and Marks (1990) focused their research on the influences of deontological and teleological evaluations on the ethical judgments of marketing researchers as well as the relationship between ethical judgments and ethical intentions. A partial testing of the Ferrell-Gresham model was conducted by Reidenbach and Robin (1990). Some of the factors of ethical decision-making investigated induded values, social knowledge and ethical attitude. Another empirical study by Singhapakdi and Vitell (1990, 1991) focused on the influences of organizational ethical culture, Machiavellianism, and locus of control on deontological norms, ethical perceptions, and perceived alternatives of marketing professionals. Ethical decision-making is often situation-specific. That is, an ethical dilemma is often judged within its situational context. As any ethicist might state: "there can be no resolution of a moral problem which is equally satisfactory for all people or for all time" (Robin, 1980, p. 142). Unfortunately, little is known about the relative influences of situational factors on a marketer's ethical decision-making processes. To date, no one has examined the link between an individual's ethical perceptions and the specific characteristics of a situation involving ethical issues, nor has the relationship of this link to variables such as one's ultimate intentions within the context of that situation been examined. As can be seen from our brief review of the empirical testing of marketing ethics decision-making processes, these studies have focused mainly on the relative influences of the organizational environments or on various personal characteristics of decision-makers. We examine the influence of specific situational factors on important components of the marketers' ethical decision-making

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processes depicted in marketing/business ethics theories. In examining the specific ethics-related characteristics of situational factors, Jones (1981) provides researchers with an appropriate construct, moral intensity, which he defines as "the extent of issue-related moral imperative in a situation" (p. 372). Jones argues that ethics-related situations vary in terms of moral intensity. Clearly, an empirical investigation into the impact of moral intensity on different components of a marketer's decision-making in ethical situations would add significantly to our understanding of marketing ethics decision processes. Thus, this study has the following objectives: (1) to explore the relationship between moral intensity and a marketer's perceptions of an ethical issue, (2) to explore the relationship between moral intensity and a marketer's intentions in situations involving an ethical issue, and (3) to determine the dimensionality of the moral intensity construct.

Theoretical Foundation The assertion that marketing ethics decisions are situational or issue-related is generally consistent with emerging marketing/business ethics models. For example, in their general theory of marketing ethics, Hunt and Vitell (1986, 1993) depict one's perception of an ethical problem situation as the catalyst of the ethical decision process. Implicit in their model is the assumption that the nature of the ethical issue, among other background factors including organizational environment and personal characteristics, influences different components of a marketer's ethical decision-making process. For this study, the nature of the ethical issue will be defined as the characteristics of a marketing situation having ethical content or problem. Ferrell and Gresham (1985), in their contingency model, did not explicitly include the nature or characteristics of the ethical issue as a major factor of marketing ethics decisionmaking. However, they specific "ethical issue" as a construct preceding the individual decision-making process. In her "Person-Situation lnteractionist Model" of ethical decisionmaking, Trevino (1986) specifies situational factors as important determinants of the ethical decision-making process. Citing the work of Higgms, Power, and Kohlberg (1984), Trevino explained that: moral action takes place in social context and can be influenced heavily by situational variables. Therefore, ethical/unethical behavior in practical situations is not simply a product of fixed individual characteristics, but results from an interaction between the individual and the situation (p. 610). The specific situational factor to be investigated in this study is the nature of the ethical issue itself. As pointed out earlier, Jones (1991 ) refers to this category of situational factors as moral intensity or the extent of issue-related moral imperative of a given ethical situation. He argues that the intensity of the moral issue must be explicitly recognized and investigated if we are to have a better understanding of ethical decision processes.

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According to Jones, moral intensity is multidimensional and consists of six components: magnitude of consequences, social consensus, probability of effect, temporal immediacy, proximity, and concentration of effect. If the moral intensity of a situation is viewed as weak in terms of these six components, that situation will not be viewed by the decision-maker as having an ethical element.

Research Hypotheses Influence of Moral Intensity Jones (1991) postulates that issues of high moral intensity will be recognized as ethical issues more often than those of low moral intensity. Thus, in general, one would expect a positive relationship between moral intensity and a marketer's perceptions of an ethical conflict. Jones further postulates that moral intensity is linked to a decision-maker's intentions, with moral or ethical intent being established more frequently where issues of high moral intensity are involved. Therefore, one would also expect the relationship between moral intensity and the morality of a marketer's intentions to be positive. As pointed out earlier, six categories of moral intensity were identified by Jones. The definitions of each of these categories of moral intensity, along with the research hypotheses regarding their influences on the marketers' ethical perceptions and intentions, will now be presented. MAGNITUDE OF CONSEQUENCES. Jones defines magnitude of consequences as "the sum of the harms (or benefits) done to victims (or beneficiaries) of the moral act in question" (p. 374). One of the examples he provided is that an act causing death is of greater consequence than one causing minor injury. Jones argued that the inclusion of the magnitude of consequences as a component of moral intensity is not only common sense but also consistent with empirical evidence. Two marketing ethics studies reviewed by Jones are those by Fritzsche and Becker (1983) and Fritzsche (1988), whose results revealed a positive relationship between magnitude of consequences and ethical behavior. A recent study by Hunt and Vasquez-Parraga (1993) found a positive link between organizational consequences and a manager's ethical decisions. The following hypotheses were formulated based on the general relationship found in these studies and the general propositions by Jones that issues of high moral intensity will be recognized as ethical issues more often and will more likely result in a more moral or ethical intent.

Hla: The greater the magnitude of the negative consequences, the more likely that a marketer recognizes an ethical problem. Hl b: The greater the magnitude of the negative consequences, the more likely that a marketer's intentions are ethical. SOCIAL CONSENSUS. According to Jones (p. 375), social con-

sensus is "the degree of social agreement that a proposed act

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is evil (or good)." Since "social consensus" is a somewhat nebulous term, most people are probably influenced by the extent to which significant others (i.e., family, friends, other employees) agree "that a proposed act is evil (or good)." Interestingly, Hunt and Vitell (1986, 1993) specify "cultural norms" as a factor in their marketing ethics model. Although no details were given by them, cultural norms were depicted as a construct affecting various aspects of ethical decision-making such as perceived ethical problem and perceived alternatives. According to Jones, logic is a reason why social consensus is specified as a dimension of moral intensity. As he explained, "it is difficult to act ethically if a person does not know what good ethics prescribes in a situation; a high degree of social consensus reduces the likelihood that ambiguity will exist" (p. 375). Citing the work of Laczniak and Inderrieden (1987),Jones also defends his inclusion of social consensus with empirical evidence. The following statement by Laczniak and Inderrieden (1987, p. 304) was paraphrased by Jones, "In order for individuals to respond appropriately to a given situation, agreement must exist as to whether or not the behavior is appropriate." Of course, this "values agreement" does not necessarily insure that an ethical action will be undertaken in a given situation. Nevertheless, the following hypotheses were formulated. H2a: The greater the social consensus that the proposed act is harmful, the more likely that a marketer recognizes an ethical problem. H2b: The greater the social consensus that the proposed act is harmful, the more likely that a marketer's intentions are ethical. PROBABILITYOF EFFECT. Probability of effect is defined as "a joint

function of the probability that the act in question will actually take place and the act in question will actually cause the harm (benefit)" (Jones, p. 375). This dimension of moral intensity is consistent with Hunt and Vitell (1986, 1993) who depict "probabilities of consequences" as a component of an individual's teleological evaluation. In particular, citing the work of Dayton (1979), Hunt and Vitell stated that "an individual's preferences for alternatives in situations having an ethical content will be in proportion to the probability that the actions contribute to the individual's goal attainment" (p. 9). According to Jones, the inclusion of this dimension of moral intensity is a matter of logic. In other words, as he illustrated, the magnitude of a moral act would be "discounted" if either the probability of its occurrence or the probability of its harm is less than 1.00. According to this conceptualization and consistent with the general propositions about the impact of moral intensity, we would expect the probability of a negative consequence to have a positive effect on a marketer's ethical perceptions and on a marketer's intentions. In particular, the following hypotheses were tested: H3a: The greater the probability of the negative consequence, the more likely that a marketer recognizes an ethical problem.

H3b: The greater the probability of the negative consequence, the more likely that a marketer's intentions are ethical. TEMPORAL IMMEDIACY. Jones (p. 376) defines temporal im-

mediacy as the "length of time between the present and the onset of consequences of the moral act in question." Jones argues that "people tend to discount the impact of events that occur in the future . . . . The greater the time period, the greater the discount" (p. 376). According to Jones, this may be because people tend to perceive that the greater the time between the act and its consequences, the lower the probability of the act causing any harm. Therefore, the following hypotheses were formulated. H4a: The shorter the length of time between the present and the perceived onset of negative consequences, the more likely that a marketer perceives an ethical problem. H4b: The shorter the length of time between the present and the perceived onset of negative consequences, the more likely that a marketer's intentions are ethical. PROXIMITY. Proximity was defined as the "feeling of nearness

(social, cultural, psychological, or physical) that the moral agent has for victims (beneficiaries) of the evil (beneficial) act in question" p. 376). Jones asserts that "people care more about other people who are close to them (socially, culturally, psychologically, or physically) than they do for people who are distant" (p. 376). Proximity as a factor of ethical decision-making is consistent with the ethics model by Hunt and Vitell (1986, 1993) where "importance of stakeholders" is specified as a construct influencing ethical judgments of marketers. Based on their review of the work by Brenner and Molander (1977) and ZeyFerrell, Weaver, and Ferrell (1979), the following important stakeholder groups were documented: customers, stockholders, employees, peers, interfacers, and managers. The perceived importance of stakeholder groups was the focus of a study by Vitell and Singhapakdi (1991 ) who found that the strict enforcement of codes of ethics within an organization can have positive impacts on the way marketers assess their own importance. They also found that Machiavellians tend to place more importance on personal interests than on their clients' interests. The following hypotheses were formulated based on the general assertion that people tend to place more importance on those who are closer to them. H5a: The greater the feeling of nearness that a marketer has for the victims, the more likely that the marketer recognizes an ethical problem. H5b: The greater the feeling of nearness that a marketer has for the victims, the more likely that the marketer's intentions are ethical. CONCENTRATION OF EFFECT. Concentration of effect was defined

as "an inverse function of the number of people affected by an

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act of given magnitude" (Jones, 1991, p. 377). A marketing example was given by Jones: A change in a warranty policy denying coverage to 10 people with claims of $10,000 has a more concentrated effect than a change denying coverage to 10,000 people with claims of $10.00 (p. 376). The concept of concentration of effect is consistent with the normative philosophy of ethical utilitarianism, which essentially holds that "an act is right only if it produces for all people a greater balance of good consequences over bad consequences than other available alternatives (i.e., 'the greatest good for the greatest number')" (Hunt and Vitell, 1986, p. 7). Since a high concentration of negative effects means that an act is "bad" for a large number of people or else it is "extremely bad" for a few, then, according to a utilitarian philosophy, it would be less ethf'cal than an act that did not have a high concentration of negative effects. Thus, the following hypotheses relating to concentration of effect were formulated.

H6a: The greater the concentration of negative effect, the more likely that a marketer recognizes an ethical problem. H6b: The greater the concentration of negative effect, the more likely that a marketer's intentions are ethical.

Methodology Oper ationaliz ation Scenarios are commonly used as part of research instruments in marketing ethics studies (e.g., Laczniak, Lusch, and Strang, 1981; Chonko and Hunt, 1985; Singhapakdi and Vitell, 1990). The use of scenarios is generally considered to be a good solution to improve the quality of data from questionnaires. As Alexander and Becket (1978) pointed out, the use of scenarios "helps to standardize the social stimulus across respondents and at the same time makes the decision-making situation more real" (p. 103). In fact, Hunt and Vitell (1986) recognize the use of scenarios as suitable for marketing ethics research. For this study, several marketing ethics scenarios developed by Dornoff and Tankersley (1975) and Reidenbach, Robin, and Dawson (1991) were pretested and adapted as general scenarios for measuring the three constructs of the s t u d y - m o r a l intensity, ethical perceptions, and ethical intentions. Ultimately, four scenarios were used in this study and are included in Appendix A. MORAL INTENSITY. The six components of moral intensity are:

magnitude of consequences, social consensus, probability of effect, temporal immediacy, proximity, and concentration of effect. For this study, a single statement was developed to reflect each of the six aspects of moral intensity (see Appendix B). The intensity of the moral issues depicted in each scenario was measured directly by asking each respondent to indicate his or her degree of agreement or disagreement with each of these statements. A nine-point Likert-type scale was used.

ETHICAL PERCEPTIONS. Consistent with Singhapakdi and Vitell (1990), the construct ethical perceptions was measured directly by asking the respondents whether the situation described in each scenario involves an ethical problem. In particular, respondents were asked to express their degree of agreement or disagreement regarding the statement, "The situation above involves an ethical problem." A nine-point, Likert-type scale was used for measurement.

ETHICALINTENTIONS. Ethical intentions were measured by asking respondents to indicate if they would act in the same, questionable manner as the marketer depicted in each of the scenarios. In particular, the statement, "I would act in the same manner as [marketer] did in the above scenario" was used. This construct was also measured by a nine-point disagree/agree scale. Agreement with the action taken in the scenario indicated less ethical intentions than disagreement did. According to a survey of consumers by Dornoff and Tankersley (1975) and based on our pretest results, most people disagreed with the actions depicted in each of the scenarios used in the study. Accordingly, for this study, it is assumed that agreeing with the actions means that one's ethical intentions are "less ethical" and vice versa. This assumption is consistent with that of Jones (1991, p. 367) who defined ethical decision as "a decision that is both legal and morally acceptable to the larger community."

Pretesting A pretest of the research instrument is commonly used as a final step in questionnaire development (Churchill, 1979). For this study, the research instrument was pretested using 153 senior and Master's level business students from three universities, one each from the midwest, mid-atlantic, and south. Most pretest respondents were male (55%). The largest group was MBA students (69%). A large portion of respondents (80%) were 25 years of age or older, and most of them (56%) had at least five years of business experience. Based on the pretest results, some of the original scenarios were dropped and some of the questions developed in this study were revised. In the pretest, the four scenarios judged by respondents to involve ethical issues were included in the final instrument. Additionally, the wording of some of the moral intensity questions was modified to clarify their meaning in the final questionnaire.

Sample A self-administered questionnaire was used as the data collection method. An American Marketing Association (AMA) mailing list of U.S. members was selected as the sampling frame. The questionnaires were mailed to 2,000 randomly selected practitioner members of the AMA (approximately 15% of total U.S. membership). Of the 1,995 sets delivered, 453 persons responded for a response rate of 23%. The response rate is comparable to those of previous marketing ethics surveys that have also used an AMA mailing list as the sampling frame (e.g., Hunt

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and Chonko [1984] obtained 25%, Singhapakdi and Vitell [1991] obtained 27%). Although the response rate is judged adequate, a test for nonresponse bias was also carried out by comparing responses from "early" respondents with those from "late" respondents. This approach is based on the assumption underlying the "extrapolation methods" pointed out by Armstrong and Overton (1977, p. 397) that "subjects who respond less readily are more like nonrespondents." Two demographic characteristics, age and income, along with the two dependent variables of this study (i.e., ethical perceptions and intentions) were used for this purpose. An analysis of variance (ANOVA) between the "early" and "late" respondent groups showed that there were no statistical differences between the two groups on any of these variables. Of the 453 sets of questionnaires returned, 442 sets are usable. A detailed profile of the characteristics of the 442 respondents is presented in Table 1: about half of the respondents were men (51%) with the majority (37%) being between 30 and 39 years old. Overall, the respondents were highly educated with 30% having an undergraduate degree and 62% having some graduate education. More than half of the respondents reported their income at $40,000 or higher per year. The respondents represented various industries with the largest group from the service sectors. The majority of respondents were in middle management positions. Finally, regarding their geographical distribution, the respondents were scattered throughout the United States.

Mean Responsesfor Moral Intensity Components Because moral intensity is the key construct of this study, a preliminary analysis of the responses for each of the six measures of moral intensity for each scenario was carried out. The means along with standard deviations of the responses are given in Table 2. In general, scenarios 1 and 4 ("Misleading the Appraiser" and "Failure to Honor a Warranty") appear to be more "intense" than scenarios 2 and 3. Also, the scenario depicting failure to honor a warranty (scenario 1) was generally perceived as the most "intense" moral situation of the four situations. These results indicate various degrees of moral intensity among the four scenarios used in this study. That is, the perceived intensity for each of the different components of moral intensity appeared to vary, as can be expected, depending on the nature of the scenarios or situations presented to the respondents. This result clearly supports Jones' (1991 ) theory. Marketers obviously look at diverse situations differently, finding some to be more "morally intense" than others.

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Table 1. Profile of Respondents

Variables

Percentage

Sex

Male Female

51 49

Agea Under 30 30 to 39 40 to 49 50 to 59 60 and over

17 37 29 13 4

Education a High school or less Some college Bachelor's degree Some graduate school Master's degree Doctorate

1 6 30 13 43 6

Annual compensation $10,000-20,000 $20,000-30,000 $30,000-40,000 $40,000-50,000 $50,000-60,000 $60,000-70,000 $70,000-80,000 $80,000-90,000 $90,000-100,000 Over $100,000

2 8 15 15 14 12 9 5 4 17

Industry Wholesale or retail Manufacturer or construction Services Communications Advertising or public relations Marketing consulting Other Current job title President/Owner Vice president Corporate manager/director Division/Product manager District manager, Analyst Junior analyst/Sales Other Geographical distribution West Central Northeastern Southeastern

12 17 35 9 7 18 2 18 12 17 28 15 8 2 22 32 18 28

" These variables were measured at the continuous level and have been categorized here

Manipulation Check Given that the "ethical content" of the situation is a prerequisite triggering the whole ethical decision-making process (Hunt and Vitell, 1986), a manipulation check of the ethical content of the scenarios was carried out. The variable "ethical perceptions" was judged appropriate for this purpose. Ethical perceptions were measured by asking the respondents to indicate their

agreement or disagreement as to whether the situations in each of the four scenarios involved an ethical problem. The results indicated that all scenarios were perceived as involving ethical problems with mean responses ranging from 6.25 to 8.42. Univariate tests were also carried out with results indicating

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Table 2. Means for Measures of Intensity Componentsa Scenarios b Intensity Components

Magnitude of consequence Social consensus Probability of effect Temporal immediacy Proximity Concentration of effect

1

2

3

4

7.1 (2.03) 7.2 (1.84) 7.3 (1.85) 7.0 (2.04) 5.8 (3.36) 7.0 (2.15)

6.5 (2.08) 6.3 (2.09) 6.4 (2.13) 6.4 (2.15) 5.8 (3.10) 6.7 (2.01)

5.2 (2.46) 5.5 (2.36) 5.2 (2.43) 4.7 (2.52) 5.1 (3.04) 5.3 (2.46)

8.2 (1.24) 7.9 (1.93) 8.0 (1.42) 7.9 (1.65) 5.9 (3.40) 7.5 (2.04)

,' Standard deviationsare givenin parentheses

h Scenario 1: Misleadingthe appraiser Scenario2: Overeagersalesperson.Scenario3: Withholdinginformation.Scenario4: Failure to honor a warranty

that the means for "ethical perceptions" were significantly greater than the neutral level (value of 5) for all four scenarios. According to Hunt and Vitell (1986), "it is extremely important that any situations or scenarios used to test the model empirically be perceived by respondents as having ethical content" (p. 7). Therefore, the fact that the mean responses for "ethical perceptions" were significantly greater than the neutral level indicates that the situations used are appropriate for this empirical study. In addition, the results indicate that the respondents are, on average, ethically sensitive. That is, most respondents perceive that the ethical situations used in our survey instrument have ethical problems. This finding is positive, because it is generally consistent with that from Dornoff and Tankersley's (1975) survey which revealed that most consumers disagreed with the actions depicted in these scenarios.

Test of Hypotheses The independent variables of this study are the six components of moral intensity. As a preliminary step, correlation analysis of these six intensity components was carried out for all four scenarios (see Table 3). The results revealed that these components, for the most part, were highly correlated. Given the significant relationships among independent variables, pairwise correlation was selected over regression analysis to test the research hypotheses. In this way the multicollinearity problem was eliminated. The results of the hypotheses tests are presented in Table 4. All six components of moral intensity are significantly, positively correlated with ethical perceptions for all four scenarios tested. That is, the correlation results indicate that the ethical perceptions of marketers are positively related to all components of moral intensity. Accordingly, all hypotheses relating to the relationship among the six components of moral inten-

sity and ethical perceptions are supported (i.e., Hla, H2a, H3a, H4a, HSa, and H6a). In particular, relating to the magnitude of consequences component, the results indicate that a marketer will be more likely to recognize an ethical problem in situations where the magnitude of the negative consequences is greater. Regarding the social consensus component of moral issues, the results reveal that the greater the social consensus that the proposed act is harmful, the more likely that a marketer will recognize an ethical problem. As for the probability of effect component, the results show that the greater the probability of the negative effect, the more likely that a marketer will recognize an ethical problem. Regarding the temporal immediacy of the situation, the results indicate that the shorter the length of time between the present and the onset of negative consequences, the more likely that a marketer will recognize an ethical problem. Concerning the proximity component, the results indicate that the greater the feeling of nearness that the marketer has for the victims, the more likely that a marketer will recognize an ethical problem. Lastly, the greater the concentration of negative effect, the more likely that a marketer will recognize an ethical problem. Overall, the correlation analysis results regarding the relationship among the six components of moral intensity and a marketer's ethical intentions also support the research hypotheses. The sole exception to this is that the proximity component does not appear to be, generally, related to ethical intentions (i.e., H5b). The correlation between proximity and ethical intentions was only significant for the third scenario, which involved the withholding of information. Apparently, whether or not a marketing decision-maker is "near" to the potential victim is irrelevant to their choice of actions.

Dimensionality of Moral Intensity An exploratory factor analysis was performed on the six individual components of moral intensity for each of the four scenarios. The Kaiser-Meyer-Olkin measure of sampling adequacy ranged from 0.75 to 0.87, indicating that factor analysis was, indeed, an appropriate technique. The results of these principal component factor analyses, using varimax rotations, appear in Table 5 and show that moral intensity appears to have two dimensions. One dimension is composed of the magnitude of consequences, the probability of effect, the temporal immediacy, and the concentration of effect components. This dimension might be labeled the "perceived potential harm/no harm" dimension. It explained between 43 and 60% of the variance depending upon the specific scenario. The second dimension consisted of the social consensus and the proximity components of moral intensity and might be labeled the "perceived social pressure" dimension. This dimension explained between 15 and 18% of the variance depending upon the particular scenario. The same two-dimensional pattern for moral intensity was supported in three of the four scenarios. Only scenario 2, dealing with the overeager salesperson, resulted in a one-factor so-

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Table 3. Correlations among Intensity Components Scenario 1: Misleading the appraiser (n = 418) I1. Magnitude of consequences I2. Social consensus 13. Probability of effect I4. Temporal immediacy I5. Proximity I6. Concentration of effect 2: Overeager Salesperson (n - 414) I1. Magnitude of consequences I2. Social consensus I3. Probability of effect I4. Temporal immediacy I5. Proximity I6. Concentration of effect 3: Withholding information (n = 414) I1. Magnitude of consequences 12. Social consensus I3. Probability of effect I4. Temporal immediacy I5. Proximity I6. Concentration of effect 4: Failure to Honor a Warranty (n = 415) I1. Magnitude of consequences I2. Social consensus I3. Probability of effect t4. Temporal immediacy I5. Proximity I6. Concentration of effect

I1

12

13

0.71 b

1.00 0.48 b 0.36 b 0.24 b 0.44 b

1.00 0.70 u 0.25 b 0.74 b

1.00 0.23 u 0.58 b 0.47 b 0.10 0.47 b

0.22 b 0.14 a 0.10 0.11

1.00 0.73 b 0.09 0.47 b

1.00 0.55 b 0.78 b 0.65 b 0.25 b

14

I5

16

1.00 0.20 b 0.66 b

1.00 0.24 b

1.00

1.00 0.04 0.42 b

1.00 0.13 a

1.00

1.00

1.00 0.21 b 0.57 b 0.38 b 0.11 0.50 b

0.19 b

1.00

0.19 b 0.15 a 0.19 b

0.58b 0.05 0.50 b

1.00 -0.04 0.42 b

1.00 0.06

1.00

1.00 0.28 b 0.64 b 0.56 b 0.10 0.62 b

0.33 b 0.28 b 0.19 b 0.29 b

1.00 0.71b 0.12 a 0.67 b

1.00 0.05 0.66 b

1.00 0.09

1.00

1.00

1.00

p < .01.

b p < .001.

lution. However, when a two-factor solution was "forced" for this scenario, the factor structure was the same as for the other scenarios. Separate regression analyses were then performed for each of the four scenarios with ethical perceptions and ethical intentions as dependent variables and the two dimensions of moral intensity as independent variables. Results appear in Tables 6 and 7 and indicate that both dimensions of moral intensity are significant determinants of ethical perceptions and intentions. The only exception was that, for the fourth scenario, the "perceived social pressure" dimension was not a significant determinant of ethical intentions, primarily because the proximity component was not significantly related to intentions. Nevertheless, even this relationship was significant (p = .059). Statistically, the most loosely connected component of moral intensity is proximity. Proximity has the lowest correlations with all of the other components of moral intensity. Also, proximity is not significantly correlated with ethical intentions in three of the four scenarios. As one of only two variables in the second factor ("perceived social pressure"), instability in proximity could easily distort the results related to that factor (dimension) of intensity. Thus, we have further evidence supporting our hypotheses

that the elements of moral intensity play a significant role in determining, first, the decision-maker's perception of whether or not an ethical problem even exists and, secondly, the degree of ethical intentions of certain actions in situations involving ethical problems.

Discussion We have explored the impact of moral intensity on a decisionmakers' perceptions of an ethical problem and their intentions. Hypotheses were formulated based upon Jones' (1991) theoretical framework, which depicts moral intensity as consisting of six separate components. According to Jones, these components may effect the degree of"moral imperative in a situation." Nearly all of the hypotheses relating the six components of moral intensity to ethical perceptions and intentions were strongly supported. Only the proximity component, which is the feeling of nearness that the decision-maker has for victims, was not significantly related to intentions. It was, however, significantly related to ethical perceptions. All other components of moral intensity were related to both intentions and ethical perceptions. Thus, the individual decision-making process appears to be

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Table 5. Principal Components Analysis of Intensity Items

T a b l e 4 . Correlation Analysis

Intensity

Ethical Perceptions

Scenario 1: Misleading the Appraiser Magnitude of consequence 0.42 b Social consensus 0.25 b Probability of effect 0.34 b Temporal immediacy 0.26 b Proximity 0.21 b Concentration of effect 0.35 b Scenario 2: Overeager Salesperson Magnitude of consequence 0.48 b Social consensus 0.31 b Probability of effect 0.45 b Temporal immediacy 0.43 b Proximity 0.19 b Concentration of effect 0.52 b Scenario 3: Withholding Information Magnitude of consequence 0.68 b Social consensus 0.66 b Probability of effect 0.63 b Temporal immediacy 0.48 b Proximity 0.26 b Concentration of effect 0.58 b Scenario 4: Failure to Honor a Warranty Magnitude of consequence 0.46 b Social consensus 0.29 b Probability of effect 0.40 b Temporal immediacy 0.37 b Proximity 0.20 b Concentration of effect 0.39 b

Ethical Intentions

-0.32 b -0.26 b -0.33 b -0.29 b -0.07 -0.37 b -0.34 b -0.27 b -0.338 -0.31 b -0.07 --0.40 b --0.55 b

-0.59 b -0.56 b -0.46 b -0.20 b - 0.58 b -0.33 b -0.19 b -0.25 b -0.11 -0.05 - 0.13 a

a p _ ,01. b p _ .001,

influenced by situation-specific issues such as the moral intensit'/of the situation, and Jones' (1991 ) theory is supported. Consequently, our general finding supports the normative arguments from moral philosophy, which the concept "moral intensity" was derived, that moral responsibility can be differentiated based on "proportionality" (see Jones, 1991, p. 373). Additionally, these findings are consistent with previous ethical theories. For example, the findings generally support the thesis of Hunt and Vitell (1986, 1993) that perception of the nature of an ethical situation serves as the catalyst of the whole decision-making process. Our findings also support the position of Ferrell and Gresham (1985) who specify "ethical issue" as a construct preceding the individual decision-making process. In addition, the results from our survey support Trevino's (1986) "PersonSituation lnteractionist Model" where situational variables are specified as important determinants of the ethical decisions. After the individual hypotheses were tested to determine the significance of each of Jones' components, exploratory factor analysis was performed on the six components. The results of these factor analyses supported a two-factor solution with magnitude of consequences, probability of effect, temporal immediacy, and concentration of effect making up one dimension and proximity and social consensus representing the other

Items

Factor 1 a

Scenario 1: Misleading the Appraiserc Magnitude of consequences 0.75 Social consensus 0.28 Probability of effect 0.85 Temporal immediacy 0.77 Proximity -0.03 Concentration of effect 0.75

Factor 2 b

0.18 0.59 0.03 -0.11 0.87 0.08

Eigenvalue - 2.580, 43.0% of variance explained. b Eigenvalue - 1.095, 18.2% of variance explained. Factor Ioadings of 0.50 and greater are italicized.

Items

Factor 1 a

Scenario 2: Overeager Salesperson c Magnitude of consequences Social consensus Probability of effect Temporal immediacy Proximity Concentration of effect

0.81 0.39 0.88 0.86 002 0.86

Factor 2 b

0.07 0.56 0.08 -0.02 0.90 0.03

a Eigenvalue - 3.118, 520% of variance explained. b Eigenvalue - 1062, 17.7% of variance explained. Factor loadings of 0.50 and greater are italicized.

Items

Factor I a

Scenario 3: Withholding Informationb Magnitude of consequences Social consensus Probability of effect Temporal immediacy Proximity Concentration of effect

0.89 0.65 0.90 0.81 0.38 0.86

Eigenvalue - 3.569, 59.5% of variance explained. b Factor loadings of 0.50 and greater are italicized.

Items

Factor 1 a

Scenario 4: Failure to Honor a Warrantyb Magnitude of consequences 0.77 Social consensus 0.25 Probability of effect 0.88 Temporal immediacy 0.84 Proximity 0.02 Concentration of effect 0.69

Factor 2 b

0.14 0.55 0.04 -0.07 0.86 0.11

Eigenvalue - 2.678, 44.6% of variance explained. 6 Eigenvalue - 1.025, 17.1% of variance explained Factor loadings of 0.50 and greater are italicized.

dimension. Thus, Jones' six components may actually be synthesized into just two dimensions as far as decision-makers are concerned. The first of these dimensions seems to be measuring how much actual harm is being done to the victim, whereas the second may be measuring the degree of "social pressure" involved in the situation.

Marketing Ethics Decisions

J Busn Res 1996:36:245-255

Table 6. Regression Models with Ethical Perceptions as Dependent Variable

Variables

~8

Scenario 1: Perceived Perceived Scenario 2: Perceived Perceived Scenario 3: Perceived Perceived Scenario 4: Perceived Perceived a Adjusted b Adjusted c Adjusted d Adjusted

R2 R2 R2 R2

Misleading the Appraiser a potential harm/no harm 0.398 social pressure 0.225 Overeager Salesperson b potential harm/no harm 0.490 social pressure 0.177 Withholding Informationc potential harm/no harm 0.531 social pressure 0.296 Failure to Honor a Warranty d potential harm/no harm 0.459 social pressure 0.218 -

0.23; 0.31; 0.52; 0.29;

F F F F

-

6427; 95.07; 22373; 86.97;

t

p

9.13 5.17

0.000 0.000

11.63 4.20

0.000 0.000

13.71 7.63

0.000 0.000

10.86 5.15

0.000 0.000

significant F less t h a n 0 1 . significant F less t h a n .01. significant F less t h a n 0 1 . significant F less t h a n .01.

These two dimensions were then used to form two new constructs, which were the independent variables in regression analyses with ethical perceptions and intentions as dependent variables. The results of these analyses generally supported the assertions regarding the influences of moral intensity stipulated by Jones (1991). That is, both dimensions significantly determined both ethical perceptions and intentions. Thus, there is further evidence that the moral intensity of the situation is considered significant by decision-makers when making decisions about whether or not an ethical problem exists and when considering courses of action to follow in ethical situations. The results of this research have various implications. For example, as decision-makers may use the criteria contained in the moral intensity components to help them decide whether

Table 7. Regression Models with Ethical Intentions as Dependent Variable Variables

Scenario 1: Perceived Perceived Scenario 2: Perceived Perceived Scenario 3: Perceived Perceived Scenario 4: Perceived Perceived Adjusted b Adjusted Adjusted d Adjusted

R2 R2 R2 R2

j8

Misleading the Appraiser a potential harm/no harm -0.399 social pressure -0.112 Overeager Salesperson b potential harm/no harm -0.373 social pressure -0.097 Withholding Informationc potential harm/no harm -0.500 social pressure -0.228 Failure to Honor a Warranty d potential harm/no harm -0.222 social pressure -0.092 = = = =

0.18; 0.16; 0.41; 006;

F F F F

= -

4 7 1 3 ; significant F less t h a n .01. 4 1 5 2 ; significant F less t h a n 0 1 . 143.70; significant F less t h a n 0 1 . 1 4 5 2 ; significant F less than 01

t

p

-8.86 -2.49

0.000 0.013

-7.99 -2.07

0.000 0.039

-11.67 -5.31

0.000 0.000

-4.57 -1.89

0.000 0.059

253

or not an ethical problem exists in a given situation, then some degree of ethical training of employees is probably needed to sensitize them as to the company's position on certain ethical issues. For instance, although there is evidence that the greater the negative consequences (i.e., the magnitude of consequences component) the more likely one is to recognize an ethical problem, there is still the possibility that a decision-maker might not recognize negative consequences in all situations where they might exist. This is where ethical training, which includes exposure to situations that are likely to arise later on the job and which includes sensitizing employees to all of the possible ramifications of their behavior, would help to correct problems in this area. This could be done through training sessions where employees are exposed to realistic scenarios that might occur later in their job. These scenarios would involve ethical issues or dilemmas and could include possible alternatives that one might choose. Employees could be divided into teams of three to four persons for discussion of these issues. Once each group has completed its discussion, an overall discussion, including the preferred alternative, could follow. Of course, such an approach would have to be moderated by someone well-trained in business ethics. This study is an initial investigation of the role of moral intensity in the ethical decision-making of marketing professionals. Future research needs to be conducted to determine the validity and the generalizability of these results. In particular, other samples of marketers (e.g., non-AMA members) should be studied as should other kinds of situations/scenarios. For example, ethical situations dealing with different types of products, different types of injury (i.e., social, financial, physical) and different ethical issues should be examined in future research. Additionally, future studies should attempt to operationalize moral intensity differently. For example, other components of moral intensity could be identified and measured. Moreover, for future studies additional items for measuring each of the six components of moral intensity should be developed. In fact, the use of single item to measure each of the six components of moral intensity may constitute a limitation. Although we believe that for this exploratory study the use of single items is sufficient, it is recommended that, for future studies, more items for each of the components of moral intensity should be generated to improve the psychometric quality of the scale. Indeed, we recommend that future studies generate several items per component so that information is elicited that is as complete a fit as possible to the definition of each component. Instead of measuring moral intensity directly, an experimental design could also be used. That is, within an experimental design, respondents could be exposed to scenarios manipulating some or all of the components of moral intensity, and the differences in dependent variables such as ethical judgments or intentions could then be observed. Other relationships should also be examined. For example, the relationship between moral intensity and ethical judgments could be explored further. Future research should also examine other potential covariates of moral intensity like organiza-

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A. Singhapakdi et al.

1996:36:245-255

tional, social/cultural, and industrial factors along with the personal characteristics of the d e c i s i o n - m a k e r as specified in marketing ethics theories (e.g., Ferrell and Gresham, 1985; Hunt and Vitell, 1986). Knowledge about the relative influences of these factors as well as any interaction effects on a marketer's decision process will help increase our u n d e r s t a n d i n g of marketing ethics decisions and, in addition, have i m p o r t a n t implications for both marketing organizations and public policymakers. Finally, the dimensionality of moral intensity that was discovered in this study needs to be tested in subsequent research.

properly. At this time, the transmission was completely overhauled.

Action: Because the warranty was for only one year (12 months from the date of purchase), the dealer charged the full price for parts and labor.

Source:Reidenbach, Robin, and Dawson (1991) h Source:Dornoffand Tankersly (1975) a

Appendix B.

Moral Intensity Items

Magnitude of Consequences The authors thank Professor Lawrence B. Chonko of Baylor University for his valuable comments on a previous version of this article. This research was partially funded by the Alumni Association of the University of Mississippi.

The overall harm (if any) done as a result of the [marketer]'s action would be very small.

Social Consensus Most people would agree that the Imarketer]'s action is wrong.

Probability 9]- Effect There is a very small likelihood that the [marketer]'s action will actually cause any harm.

Appendix A.

Marketing Ethics Scenarios

Scenario 1: Misleading the Appraiser ~ An automobile salesman is engine problem exists with desire to make the sale, he appraiser at the dealership,

told by a customer that a serious a trade-in. However, because of his does not inform the used car and the problem is not identified.

Action: The salesman closes the deal that includes the trade-in.

Temporal Immediacy The [marketer]'s action will not cause any harm in an immediate future.

Proximity If the [marketer] is a personal friend of the [victim], the action is wrong.

Concentration of Effect The [marketer]'s action will harm very few people (if any).

Scenario 2: Overeager Salesperson ~ A young man, recently hired as a salesman for a local retail store, has been working very hard to favorably impress his boss with his selling ability. At times, this young man, anxious for an order, has been a little overeager. To get the order, he exaggerates the value of the item or withholds relevant information concerning the product he is trying to sell. No fraud or deceit is intended by his actions, he is simply overeager.

Action: The owner of the retail store is aware of this salesman's actions but has done nothing to stop such practice.

Scenario 3: Withholding Information ~ Sets of a well-known brand of "good" china dinnerware are advertised on sale at a considerable discount by a local retailer. Several patterns of a typical 45-piece service for eight are listed. The customer may also buy any "odd" pieces that are available in stock (for instance, a butter dish, a gravy bowl, etc.). The ad does not include, however, that these patterns have been discontinued by the manufacturer.

Action: The retailer offers this information only if the customer directly asks if the merchandise is discontinued.

Scenario 4: Failure to Honor a Warranty h A person bought a new car from a franchised automobile dealership in the local area. Eight months after the car was purchased, he began having problems with the transmission. He took the car back to the dealer, and some minor adjustments were made. During the next few months he continually had a similar problem with the transmission slipping. Each time the dealer made only minor adjustments on the car. Again, during the 13th month after the car had been bought, the man returned to the dealer because the transmission still was not functioning

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