Download On the Mechanism of Integrity Promoting Enterprise Growth

On the Mechanism of Integrity Promoting Enterprise Growth
——From the Perspective of Integrity Enhancing Marketing
Capabilities
LIU Yulai
Luoyang Normal University, Luoyang, Henan, 471022
Abstract: Integrity is not only the need of market economy, it is also an important tool of the enterprises
to achieve success. Integrity makes enterprises grow up by promoting marketing capability. Integrity has
a chain feature and Matthew which makes integrity get twice the result with half of the effort, and
sometimes it can also take the man who breaks his word a big defeat. Integrity can promote marketing
capability through these ways: Integrity establishes psychological foundation for consolidating and
improving marketing capability, which is a necessary condition of attracting good returned customers,
and helps enterprises eliminate consumers’ perceptional difference. Integrity may dissolve the
consumer discontent, alleviate enterprise crisis and consolidate the consumers positive attitude.
Keywords: Marketing Capability, Integrity, Consumer, Psychology
Introduction
Integrity issues are concerned widely. Some scholars have demonstrated the necessity of integrity and
its significance for enterprise management, whose construction of the system has also been emphasized.
Some researchers have analysed the harm of dishonesty and demonstrated the concrete strategies of
integrity construction. But the research about the mechanism of the role of integrity is relatively weak
and needs to be studied further.
Market economy is equal to every enterprise. In order to achieve equality, the most important safeguard
measure is integrity besides letting the law give everyone equal rights. Integrity principle is the internal
request of market economy which can operate in order. Hu Qingyu Drugstore upheld abstaining fraud
hunging up abstaining fraud board to warn his subordinates: “Pharmaceutical influences life, so it
particularly needs abstaining any fraud.” The idea of abstaining fraud has a deep meaning. In terms of
enterprise management, the most important idea is “genuine”. It means that every enterprise should be
in good faith to every customer no matter who they are, young or old, rich or poor. Abstaining fraud is
the basement of Hu Qingyu Drugstore, which makes the company a high reputaion “JIANGNAN
DRUG KING” for 120 years. On the contrary, SANLU Milk Co. which ever produced fake milk, has set
up a bad example and finally went bankruptcy. Why integrity can help enterprises promote marketing
capability and make enterprises grow up? This paper will explore its Psychological mechanism so as to
enhance the company to understand integrity more deeply.
，
Part I: the Explanation of Integrity Theory
Integrity is the essence of Chinese traditional culture. Traditional Chinese morality considered that the
world is an objective reality, it is not false, empty, assumptive, it is so-called “sincerity”. It embodies the
prophet thoughts about the origin of the world. The principle of the world is true, the principle of people
is the second and the principle of the world is the first. It demands people respect principles of the world,
identify with it and obey it, so people should be sincere and obey this principle, and never be false. The
word “faith” originally means some words said to the heaven and the ancestors when feteing sacrifices,
and gradually it was used beyond religion. In CHUNQIU period, through the advocacy of Confucianism,
“matching words to action” and “keeping your word” were treated as important social ethics. Confucius
listed “faith” as an important item. In Chinese dictionary “cihai”, “faith” is interpretated: “honest; no
177
deceit”, and "credit", namely, “trustworthiness”. So faith means honesty, don't cheat, to keep one’s
promise, and no one is to cheat and be sincere to each other. From the Qin Dynasty, the “sincerity” and
“faith” were used together. Sincerity means faith, and without sincerity, without faith. Integrity in the
marketing process also has an important position. Through specifying behavior, straightening out
relations and order, “truth”, “goodness” and “beauty” can be harmony and unity in marketing, which
have tremendous influence to marketing capability. In the commercial proverbs, there are also a lot of
emphasis of Integrity, for example “enterprises have three key factors to succeed such as personnel,
good position and good reputation”, “Integrity means wealth, cheating means downfall ", “keep your
word, pay attention to credit”, “becoming rich by diligence, honesty is the first”, “no deceit whether old
or young”, “sincerity attracts customers and justice acquires wealth”, and etc.
There are many factors that determines enterprise's success or failure, such as capital, operation,
management methods, timing and place, etc. But if there is no integrity in management, even with very
good external conditions, the company will only succeed for a while, not alone prosper for ever.
Everybody knows the Shanxi Merchants could be brilliant for 600 years, one of the most important
reasons was that they kept the feature of “sincerity” and “faith”. Today, the market competition is
intense. If one enterprise wants to dominate in its industry, they must rely on not only their trustworthy
products but also trustworthy service. Only the enterprise with trustworthiness can have a long-term
development.[1] Integrity is the inevitable requirement of the enterprise modern management philosophy.
Though there are many modern management ideas, integrity belongs to ideas that run through the
management, affecting everone in enterprises and management consequence. It is the symbol of modern
civilization, the inevitable requirement of new era characteristics and the basic quality of modern
management. Based on it, a lot of new management means have derived. Integrity has a variety of utility,
which can resolve various contradictions, create lots of wealth. “Today, integrity is one of the most
powerful propellers.” “Integrity culture can make any organization become more efficient and
productive, and create a better environment to work in.” [2]Marketing capability exists among many
kinds of relationships, it is affected by environmental factors. There is no marketing capability
improving without environmental factors supportting. Integrity deficiency causes enterprise
environmental degradation, everything can not achieve with all kinds of difficulty. Just as the economist
Li Yining said:“ In market economy, the consequences of fooling all is being tricked by all the people,
no winners. The collapse of the credit system will bring great harm to econimic life, bring social life of
disastrous consequences. Core of the ultimate goal of economic behavio is integrity.”[3] Integrity is the
kernel competitiveness of enterprises. [4] Against the integrity standards will cause the conflict as follow:
The chain characteristics and Matthew make integrity investment get more earnings with less input, and
they can also make those losing trust fail. The chain reaction in physics refers to the heavy elements
such as uranium and plutonium fiss into a few fragments being attacked by nuclear neutrons, and gives
out a certain number of neutron, again attack the uranium nucleus of plutonium, this action can keep on
continuous. The characteristic of the reaction is that the reaction process quality elements are heavy,
continuously and it can release a huge energy. The enterprise prestige and its influence and the
comprehensive effect is very similar to the chanin action. Credit enterprise itself and the influence of
social response is a continuous reaction, the chain reaction to release the value of enterprises is a kind of
tremendous energy. According to the statistics from international authorities survey, enterprises invest 1
to the image of credibility and then 227 times benefits can be produced. Enterprises’ credit will bring
positive comprehensive benefits. This is proved by the fact that the numerous Chinese and foreign
enterprises achieve success. Once enterprise credit is good, all is good, “a flower bloom effect million”.
If enterprise credit develop negatively, it will produce a chain reaction and damage is more difficult to
measure. Some problems may lead to “one lose, all will lose”. If prestige is not good, the consequence
will be fatal, and even an misunderstanding of integritywill be also fatal.
178
Part II: The Mechanism of Integrity Affecting Marketing Capabilities and
Enterprise Growth
Integrity can help enterprises to iron out the consumers’ cognition difference, to resolve consumers’
grievances, to resolve enterprises’ crisis, to strongthen consumers’ positive attitude and solitude
consumer’s tolerance point. Integrity will also help improve customer’s loyalty, reduce or prevent the
consumer fleeing and ensure a virtuous circle.
1. Integrity Is a Necessary Condition for a Consumer’s Virtuous Circle
From the perspective of economic ethics, marketing activities can actually be seen as an operator to
achieve self-serving transactions through benefiting other people. The operators’ interests is based on
consumers’ interest and the consumers’ biggest interest is integerily served and avoid being fooled. The
honest enterprises easily establish consumers’ awareness of brand loyalty. When people trust a brand,
they will form a sense of brand loyalty, and buy this products frequently, and this will benefit a variety
of enterprise products or service lines of this brand, this brand’s enterprise products and service will
have a good reputation. In order to make them buy the products again or the company's other products,
or introduce the products to other people, rather than flee to other brand The company which has strong
marketing capabilities, must focus on the consumer's behavior before buying, to attract consumers to
buy the company's products and give them appraise, and make consumers’ feel that their purchase
decision is correct, the result of this repeated buying behavior will form consumers’ consistent manner.
Escaping behavior is dominated by psychology, with few is because of irresistible force, such as
location shift, demand changes, but in many cases the escaping behavior is consumers’ protest against
dishonesty. Therefore, if there is deception in marketing, the enterprises will boom for a very short time
like a year and then disappear. The way to deal with the situation is the total implementation of
integerity to affect consumers’ purchase preparation and evaluation, and in the meantime, it also makes
a good preparation to impact on a new round of purchasing and re-purchasing, to realiaze the connection
of the beginning and ending purchase behavior, and recycling from then on. Purchase evaluation stage is
the differentiation stage of buying behavior. Loyal customers will stay and at the same time, and some
consumers will escape. The number is determined if you have integrity and a series of other factors. “No
matter what industry, customer loyalty must be to win through attention and careful analysis, consistent
providing enthusiastic care. If successful, the effect of which would completely change the direction of a
company's overall operations and growth potential. If the company ignores customers’ loyalty to carry
high short-term rate of profit, it is choosing a greater risk and ultimately a more difficult road to go.”[5]
Integrity is a powerful tool to open up consumer psychology channels. Marketing capability in certain
sense can be said to be the capablity to open up the consumers’ buying psychology. If enterprises really
want to keep consumers, they must give consumers very good feeling, fighting for consumers’ positive
attitude, make them remember their products and establish a long relationship. Credibility is a sharp
weapon to open up the channels of consumer psychology, honesty is the magic weapon to win the
recognition of consumer psychology. As a world-known psychologist, founder of advertising
psychological, Northwestern University H • T • Scott’s motto expressed, the company “not to sell goods,
it would better bribe the customers.” All things are destined, consumers accepting operators or not all
have their corresponding psychological basis.
，
2. Integrity Can Help Companies Eliminate the Differences of Consumer’
Awareness
Almost all of the purchase have cognitive differences, there are psychological conflicts and
contradictions after the purchase. After buying, on the one hand, customers are glad that they have made
179
the most reasonable choice, have got the desired benefit as much as possible and avoided a loss, but on
the other hand, they will be upset and frustrated for not getting entire profit and the loss of the
opportunity to buy the other brand. It is the effectiveness of Alzheimer’s. Customers’ psychological
feeling and attitudes to produce supplier are affected by two sides: First, obtained effect after using the
products or services; the second is through a series of related information when using and the
consumption of products or services, and this may constitute the consumers’ next purchasing
information background and reference system. The results of consumer behavior and attitudes are
affected by the degree of enterprise information and real validity, the different combination will lead to
different feelings and the following act. There are four combinations (the following table):
High-validity intensify
High- information
intensify
Sense of achievement
- positive repeat
low -information
intensify
Happiness - the positive repeat
low- validity intensify
Feeling cheated- withdrawal
Dull feeling - Accidental repeat
In order to eliminate consumers’ psychology discomfort after purchasing, the enterprises must take
products and service into account, improving the validity and meet the consumers’ psychological need
for purchased products’ reputation.
3. Consumer Discontent and Enterprises Crisis Can Be Resovled by Honesty
Dissatisfaction expressing can always be expanded, and the dissatisfactor would often deviates from the
object that he is dissatisfied with, so that it is more urgency to resolve these dissatisfaction. People tend
to pay attention to the information of self-interest and the things that has outstanding features. This is the
nature of attention. Indeed, good news can not be spread more fast than bad news, bad news are more
irritating, regardless of the media or general consumers, more attention can be taken. As a researcher
pointed out, the bad things can always be published at the frontpage of the newspaper, but afer you
correct the bad things, your corrective actions and results may be published on the 25th edition.
Suppressed feelings need distraction, which needs a telling process of propagation. Satisfied customers
will tell three people their product buying experience and feelings, and dissatisfied customers would
complained to the 11 others. In fact, a study showed that 13% of the people with dissatisfaction of a
company will complain to more than 20 persons. Obviously bad news can go faster and vaster than good
news, which will affect other consumers’ attitude to the operator and product. About 96% of dissatisfied
customers would not complain to their operators, but to their friends and neighbors. As that, a wise
operator should take an evaluation of the consumers’ attitude at a certain time instead of waiting for
their complaintments.
4. Steadying Consumers’ Positive Attitude
Attitude is a phychological trend from subject to object. It is divided into positive and negative attitude.
Consumers’ attitude is very important to the whole market. This is because purchase attitude directly
affects purchase decision. In broad concept, purchase decision almost lies on consumers’ attitude. The
production and conversion of attitude are due to many factors. For example, physical stimulation,
acception of the information. sometimes, individual accept information from the outside. They
180
distinguish the nature from those original information, assimilating them and then the attitude is
producing; The joining of the group: the attitude of the consumers is directly or indirectly influenced by
the group; Affecting by personality, obtaining the experence, consumers profoundly remenbers that
practical experences from an object, an event or some incidents in his life. Which will be their basis
when they do the similler thing next time. These affecting factors besides physical and personal factors,
are directly affected by enterprises’ behaviors. Enterprises can put influences directly on purchase
attitude. The producing of the consunmers’ experence, it is not only their own matters, but also needs the
operator’s participation.
The basic ingredients of attitude are cognitive attitudes, affection attitudes and behavior intention. Any
one of them can lead to changes in attitude. At the same time, the attitude is affacted by a series of
psychological effect, some important factors are First Sight Effect, Recency Effect, Halo Effect
Stereotype Effect. Their orientation, stability, relationship and conversion request that the enterprises
must attach importance to attitude and constantly input in the principle of credit.
，
5. Integrity Can Solidify the Tolerate Boundary and Give More Tolerate
It is easy for excessive expectations to stimulate greater dissatisfaction. According to expectancy circle
theory, a brand will establish an expected standard in the minds of consumers, and they will experience a
result after purchasing goods or services and using them. Degree of satisfaction is the ratio that compare
expected standard with results. Degree of satisfaction of consumers(S) is function of expectancy(E) and
perception (P), namelE=f(E,P),when E=P, consumers are satisfied with it, when E<P, consumers are
satisfied with it very much, when E=P, consumers are very satisfied, when E>P, consumers dissatisfied
with it. Consumers inform the expectations of the product according to the opinion of the sellers, their
friends and other sources. The gap is allowed. When the gap becomes bigger, the degree of satisfaction
is lower. When the gap becomes less, the degree of satisfaction is higher. If the seller exaggerate virtue
of goods, consumers will feel that expectancy can not be taken place .The bigger the gap between E and
P, the less satisfaction, the less the gap between E and P, the more satisfaction. So managers need seek a
best tolerate boundary between them. In other words, brand promotion on a degree of hyperbole is
allowed, but a point between integrity and no integrity must be sought, breaking it, there is no integrity.
In the marketing process, enterprises should not only embellish a brand, but need to care for the gap
between expected standard and results that promotion has brought about.
Conclusion
，
Enterprises need to know the importance of integrity deeply in thought never forgetting being integrity.
They should grasp the law that credit play, strengthen the construction of integrity, construct reputation,
repair growth environment, and create a comfortable environment for the public. Integrity is not only a
shortcut to improve marketing capability, but also a fundamental way to promote enterprises grow. It is
the need of both enterprises civilization and social civilization.
About the author: Liu Yulai, who was born in 1963, male, Henan Nanzhao, management Ph.D.,
professor, Luoyang Normal University Enterprise School Dean, is mainly engaged in marketing,
management of the agricultural economy.
Address: Henan Province, Luoyang, Longmen Road 71, Luoyang Normal University Enterprise School,
471022
Phone number: 0379-65526203 13938821673
Email: [email protected]
181
References
[1]. Chen zhixiu sincerity is the development of the enterprise's way The Merchandise and
Quality 2009(11): 10
[2]. Arthur.·R·Ciancutti, Thomas·L·Stantine shape the faith-based organizations-----A competitive
cultures pattern
The People's Posts and Telecommunications Press 2003, version1:1, 8
[3]. Liu xuemei The root causes of China's missing "good faith" and countermeasures Journal of
Wuhan Communication Management Institute 2002, (2): 4-7
[4]. Chen zhiping Credibility is the core competitiveness of enterprises Guide to
Enterprise ,2009(2) : 184—186
[5]. Fredric. Leahy value of loyalty, huaxia Press, 2001
[6]. Chen Wenhua Consumer Psychology and Marketing Strategy, China Radio International Press,
January 2002 version 1, 50
182