Can customer loyalty be explained by virtue ethics? The Chinese way

Abstract

Virtue ethics is regarded as the key in search of moral excellence among corporations. Yet, there are limited works to empirically investigate what virtuous character morally good corporations is expected to exhibit in the course of business from the perspective of customers. To fill this gap, we argue that customers are to evaluate firm's virtuous character using Confucian cardinal virtues (ren, yi, and li) and perceived virtuousness determines customer loyalty. We test this argument using a sample of 276 Hong Kong Chinese. The result suggests that a corporation not only has to offer a good value and high quality to customers but also needs to develop and acquire virtuous character in retaining customer loyalty. Firm has to embrace ren, yi, and li as the primary business goal. In fact, they are not the means but the end in themselves. The continuous pursuit of these cardinal virtues at the firm level not only establishes proper corporate values but also enables a firm to act morally in the course of business. Such kind of firm is known as junzi corporation.

Understanding corporate culture and business performance from a Confucian perspective

“…Our academic contribution is to propose and develop a measurement scale for a new business orientation based on the Confucianism philosophy. Ip (2009) proposed a conceptual model using Confucianism and the concept of Junzi as a basis of business practices with three dimensions “Ren,” “Yi,” “Li.” Kwong et al. (2015) provided empirical support for the model with the three dimensions through developing a 16-item measurement scale and showed its positive impact on customer loyalty using 276 Hong Kong Chinese customers as the sample.…”

“…Few studies have been conducted to examine the association between Junzi ethical conducts and a firm's performance. For example, Kwong et al. (2015) demonstrated that a firm that pursues Confucian cardinal virtues (“Ren,” “Yi” and “Li”) significantly impacts the loyalty of Hong Kong Chinese customers.…”

“…This study filled the gap by developing the measurement scale and test for the relationship with business performances with empirical data. While the scale in Kwong et al. (2015) focuses on the consumer perspective, the new scale in this paper focuses on the firm perspective.…”

The utility of virtue: management spirituality and ethics for a secular business world

“…Secondary data were also drawn from published testimonies on Aquino, both from friends and Bhostile^acquaintances, to strengthen the validity of the research. Semistructured interview questions were developed with the aid of general management and leadership (Steingard 2005;Schwartz 2013;Michaelson 2012;Langvardt 2012;Karakas and Sarigollu 2012), management and workplace spirituality (Ashforth and Pratt 2003;Ashmos and Duchon 2000;Benefiel 2003;Brandt 1996;Cash et al 2000;Driscoll and Wiebe 2007;Fry 2003;Giacalone and Jurkiewicz 2003;Gotsis and Kortezi 2007;Grant et al 2004;Hicks 2003;King 2007;Kolodinsky et al 2007;Liu and Robertson 2011;Milliman et al 2003;Pearce and Manz 2014;Poole 2008;Sheep 2006;Weaver and Agle 2002;Wuthnow 1999), business and politics (Aranzadi 2013;Haydu and Lee 2004;Thanetsunthorn 2015), and virtue ethics literature (Cavanagh and Bandsuch 2002;Flynn 2008;Kwong et al 2015). As validity refers to the extent to which an empirical measure (in this case, the questionnaire) adequately reflects the real meaning of a concept under consideration (in this case, management spirituality's significance in Aquino's leadership), the authors married leadership concepts from The respondents were also afforded the opportunity to discuss issues not addressed by the questions, but relevant to the research topic.…”

“…Moreover, one who demonstrates a spirituality that results in virtuous attitudes is more likely to make ethical decisions; exhibit honesty, trustworthiness, and organizational citizenship behavior; and possess personal integrity (Cavanagh & Bandsuch in Gotsis and Kortezi 2007). At the same time, Kwong et al (2015) found that in order to retain customer loyalty, corporations need to develop and acquire virtuous characters. Thus, we agree with Cavanagh and Bandsuch (2002) that the benchmark for management spirituality is for the manager to simply determine whether the particular spirituality helps to develop a virtuous person who practices good moral habits.…”