No Matter Your Company’s Size, Customers Will Hold You Accountable for Ethical Lapses

Survey: No Matter Your Company’s Size, Customers Will Hold You Accountable for Ethical Lapses

A new report from ‘Harvard Business Review’ shows how a company’s perceived ethical violations can impact public opinion.

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Companies of all sizes have a responsibility to do the right thing–according to their customers, at least.

When it comes to ethical concerns–namely, human rights–consumers hold large corporations and small businesses to virtually equal standards, according to a new report by Harvard Business Review. This finding comes from a survey of 2,420 Americans, who were asked to react to a series of hypothetical situations involving fake businesses. Their answers revealed how likely U.S. consumers are to negatively perceive businesses based on their alleged ethical violations.

Given the survey’s findings, it may be in the best interest of all companies, small and large, to do their due diligence, especially when it comes to potential human rights violations. Transparency in this regard can help companies in the court of public opinion. The survey found that customers were more willing to favorably view companies that undertook measures like impact assessments to minimize or address negative consequences, regardless of whether or not those companies actually succeeded in mitigating potential human rights abuses.04:51

Early responses to the war in Ukraine are a recent example of how public opinion regarding human rights violations can impact companies: An April 2022 survey found that customers believed brands shared a responsibility to combat misinformation about the war and to “bring people together.” Public opinion may have also been a contributing factor to many companies, even small businesses, pulling Russian-made products earlier this year.

But consumers don’t view all potential ethical violations equally, the HBR survey also found. U.S. consumers overwhelmingly viewed companies associated with child labor as committing human rights violations, but they were less likely to feel as negatively towards businesses associated with partners who failed to pay a living wage, contaminated a community’s environment, or engaged in discrimination.

Customers may not be monolithic, and some may feel more strongly towards some perceived ethical violations than others. HBR’s survey found that customers’ perceptions are more driven by their individual moral reasoning than existing legal structures, like the United Nations Human Rights Council. There may not always be a clear right way to act to satisfy all customers, but due diligence and transparency can go a long way for businesses, big and small.

Here’s a thought

Understanding your customers is as easy as asking their opinion.  Using our survey tools can get you the insight you need to keep your business customer focused.  Need help in creating a stronger service culture? Give us a call.

BY REBECCA DECZYNSKI AND CARL PHILLIPS