The Impacts of Ethical Action on Repurchase Intention Mediated By Customer Satisfaction on Online Business

Abstract

This study aims to examine the impacts of ethical action taken by the company on customer satisfaction and intention to repurchase the products. The study was motivated by the emergence of unethical behaviour during online transactions due to limited direct contact between businesses and customers. Some companies have attempted to resolve these unethical issues. The issue of unethical behaviour still frequently arises. In contrast, unethical behaviour is less likely to stop customers from repurchasing the products. Dissatisfied customers repeat buying products from the same company or marketplaces even after they deal with an unsatisfied situation. Organisational citizenship theory is used as the framework for this study. Using a quantitative method through a survey, this study examines 171 users of the Indonesian marketplace, Tokopedia, in South Jakarta Indonesia. The survey is focused on the perception of ethical behaviour, customer satisfaction, and repurchase intention. Structural Equation Modelling (SEM) and Partial Least Square (PLS) 4 are used to examine the data. This study reveals that presenting ethical actions such as security and trust may not help the business sustain itself. Complaints and dissatisfaction with customers should be handled by offering compensation rather than apologies which may hinder them from repurchasing the products. Repurchasing is therefore essential to a sustainable firm, and customer satisfaction can only act as a mediator between a company’s ethical behaviour and customer intention to repurchase if the company’s ethical behaviour can first satisfy the consumer.