Corporate scandals in the service industry

Introduction

In the modern competitive business world, globalization and new technological advances, ethics and ethical considerations are becoming increasingly important as the world is experiencing a financial crisis, approximately since 2008, with social ramifications and ethical implications. Many corporate scandals in the service industry, such as Mc Donald’s, Lehman Brothers’, Goldman Sachs’, Ryanair’s, Alitalia’s, Enron, France Telecom’s, BP’s, Shell’s, Monsanto’s (Tsalikis, Beaton, 2006) have contributed to the emergence of a new type of consumer who has been identified by Roddick (2012) as one who is acting more like an “ethical watchdog” rather than a “hungry consumer” being more skeptical and critical than ever, “expecting brands to reflect their ethical concerns”.

Environmental degradation, including issues such as climate change, air and water pollution, resource scarcity and ozone depletion have acquired alarming dimensions and are getting increasingly important not only from a business’ but from a consumer’s perspective as well. As a result, modern consumers demand for more “green” environmentally friendly alternatives (Chen, 2008). Following this trend, modern corporations aim to satisfy this need and differentiate in an “environmental way” implementing various strategies such as Green marketing and Green communication/advertising, claiming “eco”, “earth friendly” and addressing “sustainability” messages, hoping to gain consumers’ “green” trust and eventual “sustainable” purchase.

Nonetheless, in most of the existing literature, terms such as Corporate Social Responsibility, Business Ethics and Corporate Sustainability are studied in association with organizations’ decision-making processes, ignoring possible correlations between business applied ethics and consumer responses, which presents an interesting research gap. Following the urge of Brunk claiming that “The consumer side is still in need of in depth exploration” (Brunk, 2010) and that of Sheth et al. (2011) pointing out that modern companies usually fail to systematically address sustainability concerns relevant to customers, this research aims to investigate the role of the employee as a significant stakeholder of modern companies.

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