Achieving, enhancing, and maintaining a stable market share and customer loyalty in today’s competitive environment is essential to any business organization. Organizations have to put their best efforts and implement sustainable competitive advantages to remain afloat in the business industry. Many factors can lead to competitive advantage and customer satisfaction. Product quality is an essential factor in ensuring the customers are satisfied with the product. Efficient services, on-time delivery, customer-oriented services, and loyalty measures are also competent drivers of customer satisfaction. However, one essential factor that is effectively capable of providing customer satisfaction and business success is ethics all-round the organization. Today, businesses are facing numerous ethical issues that involve standards to be followed, moral judgments, profitable endeavors, and conflicting views between right and wrong. Even minor unethical conduct or actions from an organization can severely dent and harm customer satisfaction and loyalty. These attitudes of dissatisfaction result in customers taking drastic measures to protect themselves and their interests. Such retaliation against dissatisfaction may include refusal to buy from the company or sometimes to seek legal actions against improper conduct ( Martínez-Ruiz et al., 2014). Therefore, this paper examines the effect of business ethics on customer satisfaction. It primarily focuses on specific business practices such as sales, supply, customer service, and Corporate Social Responsibility and examines how ethical practices in these areas impact customer satisfaction.
Customer Satisfaction
Although the customer satisfaction concept was initially introduced in 1954 by Peter Drucker, serious research started in the mid-70s. The aim was to determine the factors that lead to customer satisfaction and to identify some issues that may diminish satisfaction. Today, customer satisfaction is recognized as a vital part of any organizational strategy, as well as a significant driver of competitive advantage, sustainable profitability, and a firm’s market value. Martínez-Ruiz et al. (2014) define customer satisfaction as the customers’ general evaluation in regards to their consumption and purchase experiences with services and goods. Customer satisfaction differs from one customer to another depending on the tastes, attitudes, and preferences. Different customers may express distinct levels of satisfaction for the same product, experience, or service ( Martínez-Ruiz et al., 2014). Therefore, customer satisfaction is not particularly inherent in the product or service but majorly consists of the consumer's perceptions of the products and services attributed to them.
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Customer satisfaction is also dependent on both physical and psychological factors. It also varies depending on the number of alternatives a customer has for comparing and contrasting an organization's performance, products, or services. Thus, the crucial role of customer satisfaction primarily depends on the performance of the firm ( Martínez-Ruiz et al., 2014). Customer satisfaction is a unique and essential measure of a firm's performance. The level of customer satisfaction determines how the products or services delivered by a firm meet, exceed, or miss out on the customers’ expectations.
Ethical Practices and Customer Satisfaction
Studies have been conducted in the past to establish the connection between the perception of ethics and customer satisfaction at both corporate and individual levels. Love et al. (2016) empirically proved that organizational ethics are significant determinants for competitive advantage and customer satisfaction ( Love et al., 2016) . A company’s ethical business operations can provide a favorable brand image to customers, thus encouraging them to develop and maintain positive attitudes towards an organization. Customers are more likely to lean towards products and services produced by an organization that portrays high ethical standards. One key factor that indicates customer satisfaction is customer loyalty and retention. Adoption of ethically honest and excellent practices fosters and maintains customer trust, retention, and recommendation to other potential customers. Love et al. (2016) posit that customer loyalty is primarily influenced by several factors such as ethical advertisement, pricing, service delivery, service to the community, and celebrity endorsement. Fostering an ethical organizational climate encourages ethical behavior from employees as well as moral-based decision-making practices. This strategy results in customer loyalty and eventual corporate success. Several ethical practices can either make or break customer satisfaction. These are discussed below.
Ethical Sales Behavior
Many times, ethical sales behavior does not directly relate to business performance. However, an ethical salesperson can foster positive relationships with customers, thus acquiring their trust and satisfaction ( Diallo & Lambey-Checchin, 2017) . If a salesperson gives falsified information to influence a customer to purchase a product, the customer will be dissatisfied if, eventually, they find out the truth. Such falsehood results in diminished trust and loyalty. Dissatisfied customers are extremely detrimental to the success of an organization, mainly because of their reviews and recommendations ( Diallo & Lambey-Checchin, 2017) . When a customer is not satisfied, they will leave negative reviews on the organization’s website or social media page, which will have adverse results on potential customers and future sales. Dissatisfied customers will also give negative recommendations by word of mouth, thus decreasing sales and entrance of new buyers into the company.
Ethical Advertising
Ethics in advertising is crucial because by being ethical in advertising, an organization is taking responsibility and accountability towards the needs and demands of the customer. Ethical advertising primarily involves presenting information that is truthful and honest (Rivera et al., 2016) . Ethical advertising ensures that the product or service delivers what it is meant to deliver. For example, ethical advertising ensures that a food product contains what is presented on the cover or packaging. Falsehood in advertising leads to unfair expectations, disappointments, and eventual loss of trust and satisfaction among consumers. Ethical advertising levels that playing field for consumers by making available the information that they want for them to make informed decisions on the products that they want to buy, and how these products will influence their lives (Rivera et al., 2016) .
Ethical advertising leads to trust between the consumer and the company. For example, when a company's product or service effectively fulfils its intended purpose, customers become fulfilled and satisfied. They will, therefore, lean towards the company and its products in the future. As such, there is an increased recommendation, loyalty, and mutual understanding (Rivera et al., 2016) . A company that exhibits ethical advertising shows that it cares about the needs and well-being of its customers, showing that the organization is interested in protecting the consumer.
Ethical CSR Practices
Corporate social responsibility (CSR) is a business model that enables a company to be socially responsible and accountable to its stakeholders, the public, and itself. By practising CSR, organizations can be consciously aware of the kinds of impact they have on all aspects of society, such as environmental, social, and economic (Rivera et al., 2016). CSR plays a significant role in showing an organization’s ethical standards. A company that participates in effective CSR practices has been found to attract more customers than others that do not participate in CSR.
One example of CSR involves participating in charitable events and helping the less fortunate members of the community. For example, a company named Toms includes CSR in their advertising and business operations (Rivera et al., 2016). The company promises to give the less fortunate one pair of shoes every time a customer buys a pair of shoes from their store. This move is especially exciting to Millenials and other charitable people because they get a sense that they are making a difference in the society, while at the same time benefiting themselves. Not only do customers get to buy shoes for themselves, but they also ensure that a less fortunate person also gets a pair (Mercadé-Melé et al., 2018). The company made this commitment to help the international community and has thus created a sense of global citizenship and unity around its brand.
This strategy has seen the company increase its sales and grow immensely over the past five years. The brand is now competing with popular brands such as Adidas and Nike. CSR also involves including members of the community in an organization’s business operations. It may include hiring members of the local community as employees in the organization. For example, McDonald’s has created a strategy where it ensures that its management hires local people to take senior and junior roles. This move fosters a sense of loyalty, satisfaction, and belonging (Mercadé-Melé et al., 2018). When customers feel that an organization caters to their personal needs, they are more likely to become loyal to the brand. Therefore, studies show that the implementation of CSR strategies into companies generates competitive advantage and customers' loyalty and satisfaction. Investing in CSR generates an added value for consumers, which in turn results in satisfaction.
Delivery Times
Customer lead time is the time it takes from when a customer makes an order to the time it reaches the consumer. Expected customer lead time is the time that a customer expects goods or services to reach them. These terms are commonly used in fields such as material requirement planning, project management, supply chain management, and manufacturing, among others ( Marino et al., 2018) . Typically, every business has a customer lead time, which makes them anticipate the arrival of their products. Lead time has a direct influence on customer satisfaction. An organization that has poor lead times experience low customer satisfaction and low sales. When customers do not receive their goods on time, they become impatient, and this experience makes them skeptical about trying out the organization's services the next time.
For example, many companies today operate online ( Marino et al., 2018) . Many times, customers will place an order for their products and are given a certain period for the arrival of their product. Because of online logistic issues, these products may take longer to reach the customer. These issues in online lead time delays have made most customers skeptical about purchasing products online, especially if the products have to be shipped over long distances ( Marino et al., 2018) . Even in small businesses such as restaurants, customers often get satisfied with the fast and effective delivery of their services. If a meal takes over 20 minutes to be served, customers often get restless and impatient, thus becoming skeptical about visiting the place the second time.
Conclusion
Many factors often lead to consumer satisfaction. Factors such as product quality and customer-oriented services have been found to have a positive relationship with consumer satisfaction. However, business ethics in any organization has been found to have positive relationships with consumer satisfaction in the long run. Consumers who perceive business practices as being ethical are highly likely to become loyal and satisfied, thus resulting in success for the entire business. Every organization should strive to implement ethical practices in all areas of operation, including advertising, sales, CSR, and supply. Ethical considerations in all these areas ensure that customers feel a sense of belonging, trust, loyalty, and satisfaction. Satisfied customers offer positive reviews and recommendations to potential customers, which, in turn, offer a business competitive advantage and added value.
References
Diallo, M. F., & Lambey-Checchin, C. (2017). Consumers’ perceptions of retail business ethics and loyalty to the retailer: The Moderating Role of Social Discount Practices. Journal of Business Ethics , 141 (3), 435-449.
Love, E., Staton, M., & Rotman, J. D. (2016). Loyalty as a Matter of Principle: The influence of standards of judgment on customer loyalty. Marketing Letters , 27 (4), 661-674.
Marino, G., Zotteri, G., & Montagna, F. (2018). Consumer Sensitivity to Delivery Lead Time: A furniture retail case. International Journal of Physical Distribution & Logistics Management , 48(6), 610-629
Martínez-Ruiz, M. P., Ruiz-Palomino, P., Martinez-Canas, R., & Blázquez-Resino, J. J. (2014). Consumer Satisfaction and Loyalty in Private-label Food Stores. British Food Journal , 116 (5), 849-871.
Mercadé-Melé, P., Molinillo, S., Fernández-Morales, A., & Porcu, L. (2018). CSR Activities and Consumer Loyalty: The effect of the type of publicizing medium. Journal of Business Economics and Management , 19 (3), 431-455.
Rivera, J. J., Bigne, E., & Curras-Perez, R. (2016). Effects of Corporate Social Responsibility Perception on Consumer Satisfaction with the Brand. Spanish Journal of Marketing-ESIC , 20 (2), 104-114.
