Unethical Practices and Online Business: Perspectives of DSMM

Users
Yawo Edem Saba
Department of Marketing, School of Business, Catholic University of Eastern Africa (CUEA), Nairobi,
Kenya
[email protected]
Abstract: The purpose of this paper was to review literature related to unethical practices and online business. The aim is to
understand the perspectives of digital social media and mobile (DSMM) users. In order to do so, this paper was guided by
five key objectives: to investigate the nature and types of unethical practices that are unique in online business, to determine
the causes of unethical online business practices, to determine how users of DSMM are affected by the unethical
practices/behaviors, to identify how the unethical practices/behaviors in online businesses can be minimized/ameliorated
in order to protect online users, and to identify gaps that exist with regard to unethical practices and online business. The
findings of this research paper indicate that there exists various types of unethical practices in online business which include;
online insecurity, mistrust, unreliability of delivery of products and services and deception. The causes of unethical practices
in online business are greed, poor compliance with the legal requirements for doing business, aggressive competition and
insufficient legislative. The DSMM users tend to be affected by these unethical practices in a number of ways that include;
loss of customer loyalty, unsatisfied customers and loss of business reputation. Finally, this research found that the unethical
practices could be ameliorated by raising awareness about the ideals of ethical behavior in various forums and providing
appropriate punishment for unethical behaviors, being truthful, honest, and prompt in all disclosures and external reporting.
Based on these findings, this research work concludes that many online businesses, similar to other businesses have a weak
ethical culture, and little progress has been achieved to reduce misconduct. Also, the study concluded that the consumer
protection laws such as Consumer Protection Act in Kenya have far-reaching impact on (online) businesses; that businesses
have significant roles to play in consumer protection and in the ethical transformation of business sector and that law do
play significant roles in putting pressure on businesses to act in ethically responsible manner.
Keywords: Ethics, DSSM, Business, Marketing

1. Background of the Study

Unethical business practices have been defined variously by different scholars. For instance, Singh and Twalo
(2015) define it as any act within a business that falls short of the minimum company code of conduct criteria.
On his part Martin (2019) define it as an action taken by an individual or an organization that is incorrect and
unacceptable according to moral principles or beliefs while We therefore find that unethical business practices
are those incorrect behaviors that deviate from the ground principles of businesses.
In business, ethics establishes the ground principles for businesses, groups, and even individuals to follow. Doing
business in a legal and ethical manner benefits not just the company but also its stakeholders, which include
employees, customers, suppliers, and investors (Boatright, 2018). Boatright (2018) also observe that
implementing ethics in business allows the company to boost employee motivation, commitment, and
performance at work, and the organization benefits from relationships with suppliers. In online businesses,
Chaffey, Edmundson-Bird and Hemphill (2019) observe that it is critical for stakeholders to have confidence that
the online data acquired by corporations is secure and that every electronic transaction in online businesses is
secure. This is because many information-security breaches can have a negative impact not just on stakeholders
but also on the company’s shares and financial strength.
Moral and ethical issues have become increasingly relevant in organizations and corporate contexts globally. In
Germany for example, Robinson and Bennett (2016) observe that the undermining of moral standards and a lack
of commitment to rules preventing unethical behavior and wrongdoings jeopardize the dependability and
profitability of German businesses. In the same vein Schreyogg and Steinmann (2019) observe that corporate
ethical failures have led the German company Siemens to agree to a $1.6 billion settlement to remedy the
negative consequences of their bribery actions in emerging market. As a result, Germans have embraced ethics
as an essential component of daily business practice, much as corporate social responsibility is (Hussain,
Shahzad, Hassan & Doski, 2021).
Globally, online business networks on social trading have brought e-commerce ethics and the COVID-19
pandemic increased unethical commercial activities all across the world. In particular, Hussain, Shahzad, Hassan
and Doski (2021) observe that Pakistan developed online channels to generate revenue during and after a
pandemic crisis but the sellers’ fraudulent sales rose during the pandemic and continue to occur as a result of
Pakistan's lack of control in the sphere of e-commerce

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Sub-Saharan African countries, particularly Nigeria, have reached alarming levels, with the country being singled
out as one of the countries with the highest rates of electronic fraud (Ogundele, Hassan, Idris & Aliu, 2018). To
strengthen the consumer-brand relationship there is need to evaluate and support a company's moral aspect
and ethical ties with customers.
In Kenya, there is an increase in adoption and expansion of internet and related increase of online businesses.
Indeed, Kenya has seen great adoption and expansion of internet usage over the previous two decades, resulting
in a 2.9 percent rise in Kenya's Gross Domestic Product (GDP) (Mutula, 2018). However, while this increase in
acceptance and usage has offered several financial opportunities, it has also introduced a slew of ethical and
social concerns to corporate enterprises. A recent report by the Ministry of Information, Communications and
Technology of 2020, shows that Kenya loses over 2 billion Kenya shillings each year as a result of cybercrime,
prompting the need to implement appropriate legislation that strike a balance between individual rights to
privacy and the communal good of the country and its residents. Therefore, the Kenyan government could
evaluate the necessity of resolving online business trust, security, and privacy.
Unethical practices fall into four broad categories: unethical customer behaviors, unethical staff practices, unfair
competition, and legal but unethical tactics (Kaptein, 2018). Businesses have inflated the benefits of their
products while downplaying the drawbacks. However, unethical business practices will persist unless consumers
become aware. Indeed, to rebuild and sustain a culture that promotes honest and ethical behavior, Remisova,
Lasakova and Bohinska (2019) argue that corporate leaders must promote an ethical environment verbally and
aggressively by making ethical behavior a priority on the organization's agenda. They must adopt business ethics
rules to guide employees’ actions. Titus and Bradford (2016) advise that annual corporate ethics training for
workers, as well as a solid whistleblowing system, should be established.
In online businesses, most organizations use their social media platform accounts to attract the public. But these
platforms can instantly bring down organizations if they are affiliated with something deemed inappropriate by
the public, hence destroying their public image (Kim & Ko, 2019). To mitigate this, businesses must engage
seriously with the public, to the extent of implementing all professional principles of customer service and
communication management. Moreover, as observed by Gonzalez-Herrero and Smith (2020), it is critical for
businesses to anticipate the possibility of a crisis before it becomes deplorable.
In the same line of argument, Weller (2017) observes that Social media has changed the way people,
communities, and organizations generate, distribute, and consume information. Social networks have also aided
people in communicating, breaking down geographical obstacles that previously limited quick connection,
allowing for successful social media-facilitated collaboration. However, many social media users are also
confronted with new issues linked with the negative aspects of social media use. These include, among other
things, ethical and privacy violations, data exploitation and misuse, and the legitimacy of social media material.
Because of the complexity and intangibility of the digital environment, some ethical issues have arisen. As the
number of e-transactions increases, so do the number of ethical issues.

1.1 Objectives of the Study

The purpose of this study is to evaluate unethical practices and online business: a perspective of DSMM users.
The specific objectives are:
• To investigate the nature and types of unethical practices in online business
• To determine the causes of unethical practices in online business practices
• To determine how users of DSMM are affected by the unethical practices in online business
• To identify how the unethical behaviors in online businesses can be minimized in order to protect online
users, and to identify gaps that exist with regard to unethical practices and online business.

2. Literature Review
This chapter underlines the empirical review based on the objectives of this study. It presents the findings of the
research and reveals the gaps of the study.

2.1 Empirical Review

The discussion in this subsection is guided by research objectives.

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2.1.1 Nature and Types of Unethical Practices on Online Business

A number of studies have examined ethical issues in online businesses. For instance, Sharma and Lijuan (2016)
conducted an empirical examination into the ethical viewpoints on e-commerce. An online survey of Second Life
users was undertaken to investigate ethical issues in e-commerce and the factors that influence them. The
ethical performance of the e-commerce website will foster an increase in trust, which will promote customer
commitment and loyalty. It was also observed that E-commerce networks are becoming increasingly important
in online business, and consumers are becoming increasingly concerned about e-commerce ethics such as
security, privacy, and trust.
A related study by Agag (2019) investigated the nature of online business ethics and their impact on buyer
repurchase intentions and loyalty in a small and medium Egyptian business. The results of using SEM to analyze
data collected from a sample of SME e-commerce firms in Egypt show that buyers' perceptions of supplier ethics
construct are composed of six dimensions that include security, non-deception, fulfilment/reliability, service
recovery, shared value, and communication and are strongly predictive of online buyer repurchase intentions
and loyalty. Furthermore, the findings show that the most effective relationship-building dimensions are
dependability/fulfillment and non-deception.
Through the lens of online retailing, Nardal and Sahin's (2019) explored ethical challenges in e-commerce. They
used a survey of 400 internet shoppers in three cities in Turkey (Izmir, Manisa, Mersin) in order to assess
consumers' perceptions of ethical issues in online purchasing utilizing a scale of Consumers’ Perceptions
regarding to Ethics of Online Retailers (CPEOR). Ethical problems like security, privacy, reliability and non-
deception on Internet are core issues that limit the growth of online retailing. Findings indicate that; four factors
(security, privacy, non-deception and reliability) are strongly predictive of online consumers’ satisfaction.
Thus, we find that the nature and types of unethical practices that includes, insecurity, mistrust and unreliability
in product and service provision negatively affects the successful online business transaction. It negatively
influences potential buyers’ decisions to interact with sellers. These types also have a higher significance in
online business operations as customers often have little knowledge of sellers and must deal with doubt,
uncertainty and risks.

2.1.2 Causes of Unethical Practices on Online Business

In Pakistani, Zaman, Phil, Mahmood, Scholar, and Arslan (2015) investigated the causes of ethical considerations
on advertisement effectiveness as a case study. According to the study's findings, celebrity endorser ethics have
a negligible impact on advertising ethics.
In Australia, Al-Saggaf, Burmeister and Weckert (2015) did an empirical investigation on the reasons behind
unethical behaviour in the Australian Information Communication Technology (ICT) workplace. A qualitative
research methodology was used in the investigation. During the month of February 2014, 43 ICT professionals
were interviewed in six Australian capital cities. All interviews were performed face-to-face and used a semi-
structured interviewing technique that included open-ended inquiries as well as additional probing questions.
The purposive sample included ICT specialists from large and small organizations, as well as the public and
private sectors. Thirty percent of participants agreed on five significant causes for unethical behavior in ICT
settings out of the 25 reasons identified: pressure, poor management, avarice, a lack of regard for ICT, and
communication problems.
A meta-analysis study was conducted to investigate what triggers unethical behavior (Belle & Cantarelli, 2017).
The analysis revealed that exposure to misbehaving in-group members or individuals who benefit from unethical
behaviors, greediness, egocentrism, self-justification, exposure to incremental dishonesty, loss aversion, hard
performance goals, or time pressure all enhance unethical behavior. Employee monitoring, moral reminders,
and individuals’ willingness to preserve a positive self-image, on the other hand, reduce unethical behavior.
Relatedly, Ayuba and Aliyu (2018) conducted research on unethical business activities in Nigeria: causes,
repercussions, and control. The study discovered that most customer complaints about ethical abuses were
common in the mobile telecommunications, health, manufacturing, and automobile sub-sectors, where
unethical business practices were caused by a combination of three broad factors, namely, external factors
(aggressive competition and insufficient legislative elaboration), personal characteristics (greed) and improper
control (poor compliance with the legal requirements) which for doing business in Nigeria,.

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In Kenya, Mwangi (2019) conducted research on ethics management among Kenyan contractors. The study took
a descriptive survey technique, with structured questionnaires used to collect primary data. According to the
study findings, the majority of construction organizations surveyed (80.6 percent) have an ineffective ethics
management system and lack established ethical decision-making procedures. They do not have proper ethics
guidelines, such as a code of ethics or value declarations. There was also a lack of commitment from senior
management to strengthening ethics management in their own organizations, as seen by a lack of ethics
infrastructure, with just 10% having ethics divisions.
We therefore find that unethical practices are caused by peer pressure, poor management modeling, and so on.
Management frequently puts pressure on employees to act unethically or to obtain profitable business at any
cost, which may include the use of any dirty tricks. Employees may choose to act unethically based on unrealistic
expectations to succeed. Many businesses make the mistake of assuming that their employees understand what
behaviors are unethical.

2.1.3 Effects of Unethical Practices on Online Business

Unethical practices affect customers and businesses in many ways. In Mekelle, Ethiopia, Negassa (2015)
investigated the effects of business ethics on consumers’ impressions of merchandising and service-giving
enterprises. The study's target group was Mekelle's consumers and corporate organizations. The acquired data
was evaluated using both qualitative and quantitative methods, with descriptive analysis being used. As a result
of various company misconducts and corporate discussions, a new type of customer has emerged who is more
skeptical and critical than ever before, influencing individual choices, perceptions, and value systems. The study
discovered that consumers appear to be growing more hostile to marketing, owing to marketing professionals'
disregard for the ethical consequences of their actions.
Using a case study of Toyota, Ehtesham and Kuchey (2016) investigated the impact of unethical online business
practices. The study was to determine the impact of Toyota's unethical behaviors on stakeholders. The study
found that people lost trust in Toyota vehicles as a result of Toyota's lack of safety knowledge, and they went
for other vehicles. As a result, Toyota's brand reputation suffered. Toyota automobile sales in the United States
declined 16% in January 2010 and 8.7% in February compared to the same months in 2009. In addition, a lack of
openness and a refusal to work with the regulatory body created a sense of uneasiness among their
stakeholders, particularly their customers and suppliers.
We therefore find that for both individuals customers and organizations, unethical behavior has serious
consequences. It can result in job loss and reputation loss, organizations losing credibility, general morale and
productivity declining, or significant fines and/or financial loss. One of the most serious consequences of
unethical behavior in business is the inability of a company to form or maintain long-term relationships with
customers. Furthermore, it becomes vulnerable to lengthy and costly legal proceedings.

2.1.4 Prevention of Unethical Practices on Online Business

Given the rapid expansion and developing trend of e-commerce, which has changed consumer preferences to
purchase online, Chawla and Kumar’s (2021) examined the increasing trend of E-commerce and consumer
protection in India. The study examined the current Indian legislative framework that protects the interests of
online customers. A thorough examination of the two recently adopted regulations, namely the Consumer
Protection Act of 2019 and the Consumer Protection (E-commerce) Rules of 2020, as well as a literature study,
assist an analysis of 290 online customers in answering research questions and fulfilling research objectives. The
key results are that a safe and dependable system is required for e-business businesses to operate successfully;
cash on delivery is the preferred method of payment for online purchases; and website information and effective
customer care services develop a client's trust. The new restrictions appear to be robust enough to defend and
secure the rights of online customers while also boosting India's e-commerce boom. Aside from security, privacy,
warranty, customer service, and website information, consumer rights protection laws in e-commerce influence
customers’ trust (Ishan & Alam, 2019).
Within the construction industry in United Kingdom (UK), Shah and Alotaibi (2018) conducted research on
unethical practices and potential prevention methods. The survey was conducted to gather the perspectives of
key stakeholders from various impacted parties on the concept of business ethics in the building and
construction industry, which has a substantial impact on rising countries' national economic growth. According
to the study, avoiding conflicts of interest and promoting ethical rules to experts will assist to restore investor
and public confidence, client trust, and improve the quality of buildings and infrastructures.

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In SA, research into ethical business practices with regard to consumer protection Act and socioeconomic
transformation in South Africa was carried out by Reddy and Rampersad's (2019). They examined specific Act
sections, with a focus on the role of business in transformation in terms of consumer protection, including the
importance of plain and understandable language in contracts. In terms of consumer rights, the study used a
descriptive approach to illustrate business's social responsibilities in a changing society. The Consumer
Protection Act (CPA) 68 of 2008, which went into force in South Africa on 1 April 2011, establishes the foundation
for consumer protection in the country and is the first of its type. It supports a fair and open market for consumer
goods and services. It also establishes ethical principles and national standards for consumer protection.
Moreover, in Kenya, study by Muriuki and Mathenge (2019) investigated relationship between business ethics
and market share of tier one deposit taking SACCOs in Nairobi County, Kenya. Using a descriptive research
approach, the study targeted 294 management personnel from various functional areas, yielding a sample size
of 147 respondents (equal to 50% of the population) drawn from Nairobi's 12 Tier 1 SACCOs. According to the
study, ethical policies had the greatest impact on market share, with a direct, robust, and statistically significant
effect, followed by discrepancy measures. Although the association with market share was statistically
significant for each category, ethics programs and codes of conduct had the least influence on market share. It
was suggested that SACCOs pledge to be truthful, honest, and prompt in all disclosures and external reporting.
They should commit to not allowing criminal acts like as corruption, theft, fraud, and uncompetitive activity, as
well as activities that are in direct violation of organizational policies, and to monitoring any such activities.

2.2 Findings of this study

Based on the research objectives, this study’s findings are that: the nature and types of unethical practices that
includes, insecurity, mistrust and unreliability in product and service provision negatively affects the successful
online business transaction. Unethical practices are caused by a variety of issues, including peer pressure, poor
management modeling, and so on. In both individuals and organizations, unethical behavior has serious
consequences. It can result in job loss and reputation loss, organizations losing credibility, general morale and
productivity declining, or significant fines and/or financial loss. A safe and dependable system is required for e-
business businesses to operate successfully, avoiding conflicts of interest and promoting ethical rules to experts
will assist to restore investor and public confidence, client trust and so on.

2.3 Research Gaps and Further Research

This paper aimed at reviewing and identifying research gaps in both theoretical and empirical literature related
to unethical practices and online business: a perspective of DSMM users. The study has revealed that there are
quite a number of published studies in relation to the influence of unethical practices on online business.
However, none of the studies looked at how unethical practices on online business particularly on DSMM users.
This is in answer to Rowley and Keegan, (2019) observation on the need for the inclusion of further research on
both (1) social media practice and strategy, and (2) social media consumer behavior. Felix et al., (2017) also
argue that ‘extant marketing research does not analyze social media marketing from an overarching, holistic
perspective (where management, employees and customers share notions of their respective roles). Indeed,
Quinton (2013, p.913) suggests that with the advent of social media, the linear, relational exchange-based
partnership model of business-customer interaction needs to be replaced with a more interactional orientation
with a focus on multi-layered and multi-facetted interactions that cross venues and media, and emphasizes
multifaceted relationships (Dwivedi, 2021).
Given that the majority of studies examining the relationship between unethical practices and online business
were conducted primarily in developed countries with a few exceptions in Africa. Google’s approach to SEO in
2019 is by focusing on three big areas, a) the shift from answers to journeys, b) the shift from queries to providing
a query-less way to obtain information, and c) the shift from text to voice and a more visual option of finding
information (Dwivedi, 2021). Given this situation, then the question is what strategies can marketers use to
develop metrics and scales for consumer protection in the DSMM implementation? Therefore, the study
suggests that further studies should be carried out that focus on other aspects of unethical practices. Some of
the research questions that may have some practical implication for the marketers include: how marketers build
trust for their brands in the social media marketing platforms. In addition, further studies can be done that focus
on a different perspective apart from DSMM users.

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Conclusion
This research paper focused on how unethical practices influence online businesses with the aim of establishing
gaps in various aspects either from the contextual, theoretical and methodological point of view. The study
reaches to a conclusion that many businesses have a weak ethical culture, and little progress has been achieved
to reduce misconduct. The unethical practices are insecurity, mistrust, unreliability in products and services and
deception that affect negatively and significantly the online business transactions. The DSMM users tend to be
affected by these unethical practices in a number of ways that include loss of customer loyalty, unsatisfied
customers and loss of business reputation. Also, the study concluded that the Consumer Protection Act has a
far-reaching impact on business; that business has a significant role to play in consumer protection and the
transformation of a historically disadvantaged society; and that the law does play a role in putting pressure on
businesses to act in a socially responsible manner. It is therefore urgent and very important for researchers to
carry out other studies that focus on the unethical practices in DSMM transactions.

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