||Early examinations of ethical behavior largely focused on the need to establish public confidence in such profession as the legal, medical, accounting, and marketing communities. Yet, recent corporate scandals brought to light by the implosion of firms such as Enron, Tyco, and Worldcom have again negatively impacted public perceptions of a profession’s ability to self-regulate. A normative prescriptive framework for ethical conduct on the part of the business community is vital and an adequate understanding of ethical evaluation of corporate behaviors by consumer is imperative. Nwachukwu et al., Smith and Cooper-Martin indicated that earlier studies have implied that despite product category, the marketing of more harmful product to any group was generally considered to be unethical. Smith and Cooper-Martin argued that harmful products have been defined as any product that is known to be unsafe and/or unfit for its intended use. When the consumer is unable to identify or incorrectly identifies either the level of product harm or the degree of consumer vulnerability, the consumer may not even recognize that a moral issue is present, resulting in a flawed ethical evaluation process. There are few studies considered the effects of the product harm, product knowledge and negative information on firms’ ethical evaluation. For this reason, the main purpose of this study is to explore the effects of product knowledge and negative information, in addition to product harm, on firms’ ethical evaluation. Especially, the moderating effects of product knowledge and negative information on the relationship between product harm and firms’ ethical evaluation will be examined.
In this study a 3×2×2 between-subject design with three level of product harm (harmless, less harmful & more harmful), two level of product knowledge (low knowledge & high knowledge), and two treatments of negative information (disclosure & undisclosure) is used to test research hypotheses. The data is collected by convenient sampling from female consumers and there were 387 effective questionnaires with an effective response rate of 86 percent. This study adopted SPSS 14.0 for windows to testing hypothesis of this study.
The result of this study reveals that:
1. The level of product harm influences the firms’ ethical evaluation. Product harm will reduce the firms’ ethical evaluation.
2. The degree of subjective product knowledge influences the firms’ ethical evaluation, while it does not influence the relationship between the product harm and firms’ ethical evaluation. The degree of objective product knowledge does not influence the firms’ ethical evaluation.
3. The disclosure of negative information reduces ethical evaluation.
4. The level of firms’ ethical evaluation positively influences purchase intention.
Key words: Product Harm, Product Knowledge, Negative Information Disclosure, Ethical Evaluation