This article originally advances the field of organizational whistleblowing by empirically investigating the suitability of the four elements of the fraud diamond as a means to understand the intention to disclose wrongdoing through virtual channels. This article also makes a contribution on the theme of whistleblowing as it relates to customers, an under-studied, however, relevant stakeholder in this field. The main findings of the article are as follows: the four elements of the fraud diamond as they relate to whistleblowing—a combination (...) of pressure, financial incentive, opportunity and rationalization, and capability—can explain the intentions behind customer reports of wrongdoing; online social media channels are customers’ preferred means of whistleblowing; the elements of opportunity and capability are strongly correlated with the use of social media as a method of disclosing wrongdoing; and virtual channels can be useful for whistleblowers in order to avoid potential retaliation. Unique managerial and academic implications of these research findings are also discussed, extending the layers of knowledge on whistleblowing in organizations. (shrink)

Business Ethics: A European Review, EarlyView.

Both the Sarbanes–Oxley Act of 2002 and the Dodd-Frank Act of 2010 include clawback provisions that require executives to pay back incentive compensation earned on financial statements that are restated in a subsequent period. Such provisions intend to reduce unethical reporting behavior by executives who otherwise might be more inclined to misstate financial statements to boost incentive-based compensation. However, such provisions could promote rather than deter unethical behavior. In particular, Pyzoha :2515–2536, 2015) finds that, under certain conditions, executives are less (...) willing to restate financial statements in the presence of a clawback policy. Similarly, auditors might also act unethically by being less likely to propose restatements in the presence of clawbacks to avoid upsetting management. To examine this possibility, this study reports the results of three experiments that examine the effect of clawback provisions on auditor judgment. Contrary to expectations, our three experiments, along with supplemental qualitative evidence consistently indicate that clawbacks do not affect auditors’ propensity to propose restatements. These results suggest that a decrease in the number of restatements in a clawback environment will not be due to auditors acting unethically to appease management. The effects of clawbacks on auditors’ risk assessments, however, are less conclusive. As such, we offer potential post hoc explanations to guide future research. (shrink)

The objective of this paper is to investigate, through a qualitative study based on 38 semi-structured interviews with agents who provide assurance of sustainability reports, how they perceive and manage ethical issues underlying the verification of sustainability reports. Most of the ethical issues observed involve four interconnected aspects: the commercialism underlying sustainability assurance, the symbolic nature of the verification process, interdependency between auditing and consulting activities, and familiarity with the audited companies. The findings shed light on the reflexivity of assurance (...) providers on these issues and the legitimation strategies used to explain how they reconcile the independence and impartiality required for auditing activities with commercial aspects related to client–provider relationships. The study also shows the role of contextual variables in the ethics of assurance services. The paper contributes to the literature on the legitimacy of sustainability assurance and commercialism of the audit function. Practical implications and avenues for future research are also developed. (shrink)

Most of the academic research in the field of consumer ethics has focused on the cognitive antecedents and processes of unethical consumer behavior. However, the specific roles of discrete emotions such as fear have not yet been investigated thoroughly. This research examines the role of the need for cognition, the three affective responses—fear, power, and excitement—and perceived issue importance on moral intensity, ethical perceptions, and ethical intentions for four types of unethical consumer behaviors. A sample of consumers from the two (...) cities of Alexandria and Cairo, Egypt participated in the survey. Most research hypotheses were supported. NFC, issue importance, and affect variables were all predictors of moral intensity, ethical perceptions, and ethical intentions in four different consumer ethics scenarios. The specific predictors varied from one consumer ethics scenario to another, however. (shrink)

This article reports the results of research aimed at developing and validating a multi-item scale to measure consumers' agreement with three main justifications for not engaging in socially responsible consumption behaviours, namely the 'economic rationalist argument' founded on the idea that the costs of SRC are greater than its benefits, the 'economic development reality argument' based on the idea that ethical and moral aspirations are less important than the economic development of countries, and the 'government dependency argument' grounded in the (...) premise that government inaction demonstrates the legal character and the banality of unethical consumption behaviours. The scale items were generated on the basis of a multi-country qualitative study of consumers. The content validity of the scale was assessed in the first study. The second study was a survey of 157 Canadian adult consumers in which the threedimensional scale and other scales measuring relevant concepts were administered. The survey results showed that the 28-item resulting scale is reliable and generally behaves as one would theoretically expect. Implications for consumption ethics researchers and policy makers are proposed. (shrink)

The purpose of this study is to determine whether there are cross-cultural differences between Chinese and Canadian business students with respect to their assessment of the ethicality of various business behaviors. Using a sample of 147 business students, the results indicate cultural crossvergence; the Chinese (72 students) and Canadians (75 students) exhibit different ethical attitudes toward questionable business practices at the individual level but not at the corporate level. A social desirability bias (a tendency to deny socially unacceptable actions and (...) to admit to socially desirable ones) is also found to be a cross-cultural phenomenon, with the Canadians demonstrating a greater bias than the Chinese. Finally, this bias causes respondents to increase their assessment of the un-ethicality of questionable business activities. (shrink)

We examine the impact of an ethics education program on reporting behavior using two groups of students: fourth year Masters of Accounting students who just completed a newly instituted ethics education program, and fifth year students in the same program who did not receive the ethics program. In an experiment providing both the opportunity and motivation to misreport for more money, we design two social condition treatments – anonymity and public disclosure – to examine whether or to what extent ethical (...) values are internalized by students. We find that when participants are anonymous, misreporting rates are nearly the same regardless of ethics program participation. However, when their reporting behavior is made public to the cohort, participants who completed the ethics program misreported at significantly lower rates than those who did not receive the ethics program. The results suggest that ethics education does not necessarily result in internalized ethical values, but it can impact ethical behavior. (shrink)

The article reconstructs, in economic terms, managerial business ethics perceptions in the Japanese consumer market for fast-moving daily consumption products. An economic, three-level model of moral agency was applied that distinguishes unintentional moral agency, passive intentional moral agency and active intentional moral agency. The study took a qualitative approach and utilized as empirical research design an interview procedure. The study found that moral agency of Japanese firms mostly extended up to unintentional and intentional passive moral agency. Certain myopic managerial views (...) were found to affect active moral agency. This leaves room for business ethics program that aim at the development of active moral agency. (shrink)

This review summarizes and critiques the empirical ethical decision-making literature from 1996–2003. One hundred and seventy-four articles were published in top business journals during this period. Tables are included that summarize the findings by dependent variable – awareness, judgment, intent, and behavior. We compare this review with past reviews in order to draw conclusions regarding trends in the ethical decision-making literature and to surface directions for future research.

This study examines whether truth-telling in the form of honest reporting is associated with cognitive moral development. Conventional agency theory assumes that people are self-interested and willing to tell a lie to increase their personal payoffs, while recent empirical evidence shows that some people give up monetary rewards to tell the truth. The social psychology literature suggests that cognitive moral development influences individuals’ ethical decisions. We carried out an experiment whereby participants submitted managerial reports in which truth-telling decreased their monetary (...) payoff. Despite the fact that their decisions were not subject to monitoring, auditing, or reputation effects, some participants reported honestly or partially honestly. We find the relationship between honest reporting and cognitive moral development to be both positive and linear. Compared with those at lower stages of cognitive moral development, participants at higher stages of cognitive moral development were more likely to submit an honest report and give up potential monetary gains from lying. We further examine the economic impact of honest reporting on the firm’s profit. With the assumption of self-interest and profit maximization, Antle and Eppen suggest that a contract with a hurdle-rate feature reduces managers’ information rent. We find that in comparison with the expected outcome of a hurdle contract, the firm can yield higher profits with a trust contract by hiring managers with a P-score higher than 16.67. (shrink)

In recent years, and in close connection with a number of well-known financial malpractice cases, public debate on business ethics has intensified worldwide, and particularly in ethics-unfriendly environments, such as Spain, with many recent fraud and corruption scandals. In the context of growing consensus on the need of balancing social prosperity and business profits, concern is increasing for introducing business ethics in higher education curricula. The purpose is to improve ethical behaviour of future business people, and of accounting professionals in (...) particular. In this study, from a sample of 551 business students at a Spanish university, the importance of accounting ethics is investigated. The aim of this paper is twofold. First, we attempt to examine students’ overall perceptions of business ethics in unfriendly environments and, specifically, their views on the importance and goals of accounting ethics education. Second, we intend to investigate whether potential differences in such perceptions depend on previous business ethics courses taken, gender, and age of students. Our results show that those students who have previously taken an ethics course are especially prone to considering that accounting education should include ethical considerations, and show greater interest in further introducing this subject in their curricula. These facts should encourage universities offering business degrees in ethics-unfriendly environments to extend the implementation of ethics courses in their curricula. Besides, significant differences in students’ perceptions on the importance of accounting ethics are found depending on their gender and age. In line with previous research findings, female and older students show more ethical inclinations than, respectively, male and younger students. Thus, ethics-unfriendly environments can be treated as contexts where general trends on students’ ethical attitudes are also clearly visible. This fact, together with the evidenced impact of ethics courses on students’ ethical inclinations, places ethics-unfriendly environments as crucial research settings for further inquiring into the nuances that help explain students’ attitudes towards accounting ethics and the role of ethics courses in business degree curricula. (shrink)

It has been suggested that a reporting channel administered by a third-party may represent a stronger procedural safeguard of anonymity and avoids the appearance of impropriety. This study examines whistleblowing intentions among lower-tier employees, specifically examines whether an externally-administered reporting channel increases whistleblowing intentions compared to an internally-administered one. In contrast to the findings of an earlier study by Kaplan et al. :273–288, 2009), our results suggest that whistle-blowing intentions are higher when the reporting channel is administered externally than when (...) it is administered internally. We also find that an externally-administered reporting channel mitigates the negative effect of bystanders on whistleblowing intentions. Implications are discussed. (shrink)

Unlike previous studies that examine the direct effect of employees’ perceived corporate social responsibility (CSR) on affective organizational commitment (AOC), this article examines a mediated link through organizational trust and organizational identification. Social exchange and social identity theory provide the foundation for predictions that the primary outcomes of CSR initiatives are organizational trust and organizational identification, which in turn affect AOC. The test of the research model relies on data collected from 378 employees of local and multinational companies in South (...) Asia, as well as structural equation modeling to test the postulated relationships. Both organizational trust and organizational identification fully mediate the CSR–AOC link. However, the identification mechanism is significantly stronger than the trust mechanism in terms of building AOC from CSR. Out of four CSR components, CSR toward employees is the strongest predictor of employees’ trust, identification, and AOC, followed by CSR toward community, whereas CSR toward the environment has no effect. Finally, CSR toward community and employees are more associated with social exchange, whereas CSR toward consumers relates more to the social identity process. (shrink)

This study investigated students? perceptions of their own and their peers? academic dishonesty (AD), their reasons for this dishonesty, their achievement goals, and their willingness to report AD (WRAD) within a Chinese cultural context. The results identified students? belief that their peers had a greater likelihood of engaging in AD and had more motivation to do so than did the students themselves. Gender and academic major did not affect students? WRAD. However, students were significantly more willing to report classmates than (...) friends. In terms of the participants? self-perceptions and peer perceptions concerning motivations for AD, more female students cited the lack of penalties as the reason for their own and their peers? AD, whereas male students more frequently cited their lack of attention to schoolwork as the reason for their own AD. In contrast to students in the social sciences, business students more frequently cited inadequate capabilities as the reason for their AD, and engineering students more frequently attributed their AD to self-interest. Multiple regression analysis demonstrated that three motivations for AD (opportunism, inadequacy, and self-promotion) could positively predict AD, whereas mastery-approach goals could negatively predict AD. (shrink)

We study how an organization’s error-management climate affects organizational members’ beliefs about other members’ willingness to report errors that they discover when chance of error detection by superiors and others is extremely low. An error-management climate, as a component of the organizational climate, is said to be “high” when errors are accepted as part of everyday life as long as they are learned from and not repeated. Alternatively, the error-management climate is said to be an “error averse” climate when discovery (...) of errors invokes the laying of blame on those admitting to or found committing errors. We examine the effects of this error-management climate in a professional services environment where uncorrected errors may have severe consequences and discovery of work errors is crucial for organizational success. We find that error-management climate affects organizational members’ beliefs about what other members will report about discovered self-made errors, with a high error-management (versus error averse) climate leading to greater reporting willingness. We also find a significant interaction with a key contextual variable, error type (conceptual or calculation), that suggests the effect is more significant for conceptual errors than calculation errors. Our findings suggest that an organization’s error-management climate is an important factor in promoting ethical behavior of employees, especially junior employees, carrying out routine tasks whose failure to report errors discovered incidental to those tasks may have severe implications for their organizations. (shrink)

This study examined academic dishonesty (AD) of 586 Taiwanese graduate students, the relationship between students' AD and their perceptions of AD of their peers, and their judgments regarding the seriousness of AD. Results showed that female students were more critical of AD than their male counterparts were in the areas of fraudulence, plagiarism, and falsification. Male students demonstrated more awareness of peer involvement in AD in the area of falsification than did female students. Master's students confessed to greater involvement in (...) AD compared with the PhD students. Doctoral students were more judgmental with respect to unethical acts of fraudulence, plagiarism, and falsification. (shrink)

How do individuals respond when they perceive that their family business has been built upon unethical business conduct? Drawing on an expanded version of Hirschman’s typology of generic responses to declining situations (Exit, Voice and Loyalty: Responses to Decline in Firms, Organizations, and States, Harvard University Press, Cambridge, MA, 1970), which includes responses of Exit, Voice, Loyalty, and Neglect, we offer a model that predicts probability of intended response behavior as a function of normative obligation (i.e., what one perceives ought (...) to be done), managerial discretion (i.e., what one perceives can be done), and successor commitment to the firm. The model is tested on 124 business school students exposed to a scenario depicting an inherited ethical dilemma occurring in a family business from Arthur Miller’s play All My Sons, and shows support for elements of the proposed framework. Most notable is a significant negative relationship between normative firm-directed commitment and the response of Neglect. (shrink)

This article explores the extent to which consumers consider ethics in luxury goods consumption. In particular, it explores whether there is a significant difference between consumers’ propensity to consider ethics in luxury versus commodity purchase and whether consumers are ready to purchase ethical-luxury. Prior research in ethical consumption focuses on low value, commoditized product categories such as food, cosmetics and high street apparel. It is debatable if consumers follow similar ethical consumption patterns in luxury purchases. Findings indicate that consumers’ propensity (...) to consider ethics is significantly lower in luxury purchases when compared to commoditized purchases and explores some of the potential reasons for this reduced propensity to identify or act upon ethical issues in luxury consumption. (shrink)

Gender is one of the most frequently studied variables within the ethics literature. In prior studies that find gender differences, females consistently report more ethical responses than males. However, prior research also indicates that females are more prone to responding in a socially desirable fashion. Consequently, it is uncertain whether gender differences in ethical decision-making exist because females are more ethical or perhaps because females are more prone to the social desirability response bias. Using a sample of 30 scenarios from (...) prior studies that find gender differences, we examine whether these gender differences remain robust once social desirability is controlled for in the analysis. Our data suggest that the effect of gender on ethical decision-making is largely attenuated once social desirability is included in the analysis. In essence, the social desirability response bias appears to be driving a significant portion of the relationship between gender and ethical decision-making. We discuss several important research implications of this study. (shrink)

Recent financial fraud legislation such as the Dodd–Frank Act and the Sarbanes–Oxley Act (U.S. House of Representatives, Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, [H.R. 4173], 2010 ; U.S. House of Representatives, The Sarbanes–Oxley Act of 2002, Public Law 107-204 [H.R. 3763], 2002 ) relies heavily on whistleblowers for enforcement, and offers protection and incentives for whistleblowers. However, little is known about many aspects of the whistleblowing decision, especially the effects of contextual and wrongdoing attributes on organizational (...) members’ willingness to report fraud. We extend the ethics literature by experimentally investigating how the nature of the wrongdoing and the awareness of those surrounding the whistleblower can influence whistleblowing. As predicted, we find that employees are less likely to report: (1) financial statement fraud than theft; (2) immaterial than material financial statement fraud; (3) when the wrongdoer is aware that the potential whistleblower has knowledge of the fraud; and (4) when others in addition to the wrongdoer are not aware of the fraud. Our findings extend whistleblowing research in several ways. For instance, prior research provides little evidence concerning the effects of fraud type, wrongdoer awareness, and others’ awareness on whistleblowing intentions. We also provide evidence that whistleblowing settings represent an exception to the well-accepted theory of diffusion of responsibility. Our participants are professionals who represent the likely pool of potential whistleblowers in organizations. (shrink)

This review summarizes and critiques the empirical ethical decision-making literature from 1996-2003. One hundred and seventy-four articles were published in top business journals during this period. Tables are included that summarize the findings by dependent variable - awareness, judgment, intent, and behavior. We compare this review with past reviews in order to draw conclusions regarding trends in the ethical decision-making literature and to surface directions for future research.

The extant literature acknowledges social desirability response bias (SDRB) is a pervasive issue for research that uses survey data and proposes several approaches to mitigating the issue, including: self-administered questionnaires, indirect questioning, and direct measurement. The objective of this study is to provide empirical evidence related to the importance of controlling for SDRB and the efficacy of these approaches. Using a primary sample of 365 business majors, we find the most common methodologies used to control for SDRB, self-administered questionnaires and (...) indirect questions, are insufficient. A direct measure of SDRB remains significant when these approaches are used, and the exclusion of this measure affects the significance of other variables. Less than 5% of accounting-and-ethics research using survey data includes a direct control for SDRB. Our study provides empirical evidence on a methodological issue addressed in few existing studies. (shrink)

Unethical pro-organisational behaviour is an ongoing concern, prompting the need for more nuanced understanding of the workplace environment most likely to inhibit it. This study considers the role of risk climate, sometimes referred to as risk culture, as well as ethical climate, for reducing UPB. The study investigates whether four risk climate factors can, by focusing on the long-term consequences of UPB to the organisation, and providing guidance on behavioural norms, reduce UPB misconduct. Surveying employees in three financial institutions we (...) found that only one of the risk climate factors, avoidance, is consistently associated with UPB. On the other hand, a self-interested, ethical climate significantly increases UPB in all samples. In multi-climate analysis, we found that risk climate factors interacted with ethical climate to predict UPB. That is, when employees perceive that the workplace ethos is not self-interested, three factors of risk climate—avoidance, proactive and manager—significantly predict UPB. UPB is least likely when self-interest is low, avoidance risk climate is low, proactive risk climate is high and manager risk climate is high. Implications for leaders are discussed. (shrink)

Empowerment and teamwork are buzzwords of progressive human resource practices. Along with these new job design methods come reduced hierarchical control mechanisms. In light of recent ethical scandals, there is considerable concern regarding the effectiveness of the control systems of these more recent work designs. This study compared the willingness of participants to report unethical behavior when presented with work scenarios in which the perpetrator was in the relative position of team member, peer, or subordinate and in cohesive or non-cohesive (...) conditions of relational closeness. After accounting for the covariates, both main effects and interaction effects were found, indicating that reporting behavior was influenced by relative position and relational closeness. (shrink)

The Sarbanes–Oxley Act of 2002 requires company executives to certify financial statements and internal controls as a means of reducing fraud. Many companies have operationalized this by instituting a sub-certification process and requiring lower-level managers to sign certification statements. These lower-level organizational members are often the individuals who are aware of fraud and are in the best position to provide information on the fraudulent act. However, the sub-certification process may have the effect of reducing employees’ intentions to report wrongdoing. We (...) suggest that subordinates with knowledge of a superior who committed a fraudulent act and certified that there is no fraud will feel less personal responsibility to report the act, thus, decreasing reporting intentions. Additionally, we suggest that if the fraud is discovered subsequent to the reports being filed with the Securities and Exchange Commission, employees will perceive lower management responsiveness to investigate the fraud, which will reduce intentions to report. Using an experimental approach, we manipulate two between-participant variables: the presence or absence of sub-certification by the transgressor and the timing of fraud discovery, either before or after the reports have been filed with the SEC. We find that when sub-certification is present, perceived personal responsibility and intentions to report were diminished compared to when sub-certification is absent. Timing of the discovery of the fraudulent act did not influence perceived management responsiveness or reporting intentions. Supplemental analysis shows that personal responsibility partially mediates the relationship between sub-certification and reporting intentions. Our findings suggest that audit committees and senior executives may want to carefully consider the costs and benefits of the sub-certification process. (shrink)

This article reports the results of research aimed at developing and validating a multi-item scale to measure consumers’ agreement with three main justifications for not engaging in socially responsible consumption (SRC) behaviours, namely the ‘economic rationalist argument’ founded on the idea that the costs of SRC are greater than its benefits, the ‘economic development reality argument’ based on the idea that ethical and moral aspirations are less important than the economic development of countries, and the ‘government dependency argument’ grounded in (...) the premise that government inaction demonstrates the legal character and the banality of unethical consumption behaviours. The scale items were generated on the basis of a multi-country qualitative study of consumers (Eckhardt et al., 2006, ‘Why Don’t Consumers Behave Ethically’. DVD Document, AGSM). The content validity of the scale was assessed in the first study. The second study was a survey of 157 Canadian adult consumers in which the three-dimensional scale and other scales measuring relevant concepts were administered. The survey results showed that the 28-item resulting scale is reliable and generally behaves as one would theoretically expect. Implications for consumption ethics researchers and policy makers are proposed. (shrink)

Most consumer morality studies focus on consumer immorality, i.e. different types and degrees of consumer dishonesty or deviance. This paper follows this tradition, by looking at insurance customer dishonesty. For looking at insurance customer dishonesty in a wider perspective, the paper drafts a sociology of insurance customer morality, including outlines of micro-level, meso-level and macro-level moral sociologies of insurance fraud, as well as a discussion of moral heterogeneity and a critical understanding of deviance. As a next step a few empirical (...) rsearch questions are formulated and illustrated with data from a Norwegian-German pilot study. (shrink)

Although naming-and-shaming (shaming) is a commonly used tax enforcement mechanism, little is known about the efficacy of shaming tax evaders. Through two experiments, this study examines the effects of shaming tax evaders on third-party observers’ perceptions of retributive justice and tax compliance intentions, and whether the salience of persuasion of observers moderates these relationships. Based on insights from defiance theory, the message learning model, and persuasive communications, this study predicts and finds that shaming evaders increases observers’ tax compliance intentions. Furthermore, (...) the results show that higher persuasion, which includes sanction and normative appeals, affects observers’ tax compliance intentions. This study also suggests that shaming has a positive effect on perceptions of retributive justice. Importantly, the results reveal that perceptions of retributive justice in shaming punishment mediate the effect of shaming on tax compliance intentions. The implications for theory and practice are discussed. (shrink)

This article draws attention to the importance of enchantment in business ethics research. Starting from a Weberian understanding of disenchantment, as a force that arises through modernity and scientific rationality, we show how rationalist business ethics research has become disenchanted as a consequence of the normalization of positivist, quantitative methods of inquiry. Such methods absent the relational and lively nature of business ethics research and detract from the ethical meaning that can be generated through research encounters. To address this issue, (...) we draw on the work of political theorist and philosopher, Jane Bennett, using this to show how interpretive qualitative research creates possibilities for enchantment. We identify three opportunities for reenchanting business ethics research related to: moments of novelty or disruption; deep, meaningful attachments to things studied; and possibilities for embodied, affective encounters. In conclusion, we suggest that business ethics research needs to recognize and reorient scholarship towards an appreciation of the ethical value of interpretive, qualitative research as a source of potential enchantment. (shrink)

Whistleblowers who need to decide whether or not they should report wrongdoing usually experience several anxieties and pressures before making a final decision. As whistleblowers continue to attract the attention of a wide range of stakeholders, more research is necessary to understand the effects of the perceived seriousness of threats and perceived seriousness of wrongdoing, as well as the effect of the rationalization process on the intention to blow the whistle. We make the original proposal that the rationalization process can (...) affect how PST and PSW trigger whistleblowing intentions. We tested our model using employees of tax offices operating in an emerging economy. We suggest several research findings, which can be summarized as follows: PST reduces individuals’ intention to blow the whistle. That is, the greater the threat perceived by whistleblowers, the higher the likelihood they will choose to remain silent; we find evidence of a positive relationship between PSW and whistleblowing intention, whereby PSW increases individuals’ intention to blow the whistle. That is, the more serious the wrongdoing perceived by potential whistleblowers, the more likely they are to choose to blow the whistle; and we find evidence of the important role of rationalization in moderating the relationships between PST, PSW, and whistleblowing intention. The implications of these findings for business ethics scholars, managers, and end-users interested in whistleblowing are also presented. (shrink)

Despite its prevalence in emerging economies, everyday-life business deviance and its antecedents have received surprisingly little research attention. Drawing on strain theory and the business-ethics literature, we develop a socio-psychological explanation for this deviance. Our analysis of 741 owners of Chinese small- and medium-sized enterprises suggests that materialism and trust in institutional justice affect EBD both directly and indirectly in a relationship mediated by the ethical standards of SME owners. These findings have important implications for researching deviant business behavior within (...) SMEs. (shrink)

This work empirically tests the concept of the ‘whistleblowing triangle,’ which is modeled on the three factors encapsulated by the fraud triangle, in the Indonesian context. Anchored in the proposition of an original research framework on the whistleblowing triangle and derived hypotheses, this work aims to expand the body of knowledge on this topic by providing empirical evidence. The sample used is taken from audit firms affiliated with both the big 4 and non-big 4 companies operating in Indonesia. The results (...) of analysis using the PLS-PM method found a significant relationship between the components of the whistleblowing triangle and the intention of blowing the whistle. We found that financial incentives are the most significant predictor of auditors’ intention to blow the whistle in Indonesia. Other components, such as opportunity and rationalization, also play an important role in supporting auditors’ intention to blow the whistle. Our findings also suggest that related pressures are the top priority for audit firms in Indonesia to consider in increasing whistleblowing intention. We expand the previous literature on whistleblowing which has been derived from the components of the fraud triangle :28–56, 2016; Smaili and Arroyo in J Bus Ethics, https://doi.org/10.1007/s10551-017-3663-7, 2017) by adding empirical evidence. (shrink)

Within the limited, but growing, literature on small business ethics almost no attention has been paid to the issue of social responsibility within ethnic minority businesses. Using a social capital perspective, this paper reports on an exploratory and qualitative investigation into the attitudinal and behavioural manifestations of CSR within small and medium-sized Asian owned or managed firms in the U.K., with particular reference to the distinctive factors motivating organisational responses. It offers alternative explanations of entrepreneurial behaviour and suggests areas for (...) further research. (shrink)

. This study measures social desirability bias (SD bias) by comparing the level of discipline sales managers believe they would administer when supervising unethical selling behavior with the level of discipline they perceive other sales managers would select. Results indicate the presence of SD bias; the sales manager respondents consistently claimed that they would be stricter while their peers would be more lenient. Using an analytical technique that takes social desirability bias into account, it appears that sales managers use of (...) discipline is affected by the sales performance of the salesperson being disciplined resulting in more lenient discipline for top sales performers. In addition, the more lenient treatment for top sales performers persists even when there is a pattern of a prior ethical infraction and the existence of an explicit organizational policy proscribing the act in question. Sales managers believe that, like themselves, others would be stricter when an unethical act is committed for the second time but not as strict as they personally would be. A within-subjects interaction effect indicates more SD bias under the condition of the unethical act being committed for the second time. (shrink)

We examined whether differences in climate-friendly choices between the supporters of left-wing and right-wing ideologies are based on different moral foundations. Moreover, we compared general and issue-specific endorsement of moral foundations applied to climate change. Study 1 examined the endorsement of general moral foundations of university students living in Finland. Individualizing foundations were associated with increased climate-friendly choices and binding foundations were associated with decreased climate-friendly choices; the endorsement of moral foundations made the effect of political orientation disappear. In Study (...) 2 we developed and tested an issue-specific measure of moral foundations. The issue-specific endorsement of both types of foundations was directly associated with increased climate-friendly consumption. Binding foundations were associated with the avoidance of climate-friendly choices through right-wing orientation. These findings increase our understanding of differences between general and issue-specific moral concerns and their association to political orientation and pro-environmental behavior. (shrink)

The desire to control how others see us is a ubiquitous phenomenon. Decades of research have suggested that the results associated with how others see us are too great an influence to ignore. The tactics we use and behaviors we engage in to control how others see us is known as impression management. This study examines the relationship between regulatory focus and the use of exemplification or supplication impression management tactics. We use regulatory focus theory to examine this phenomenon. First, (...) we investigate the main effects that occur between prevention-focused individuals and exemplification, and between promotion-focused individuals and exemplification and supplication. We then introduce supervisor behavioral integrity as a moderator between regulatory focus and impression management. Our findings suggest a positive relationship between prevention-focused and exemplification, and between promotion-focused and exemplification and supplication. We also find that behavioral integrity strengthens the relationship between prevention-focused and exemplification and promotion-focused and supplication, but not promotion-focused and exemplification. Implications and future research directions are discussed. (shrink)

Friendly persuasion, in contrast to deterrent measures like tax audits and penalties on underreported taxes, is a positive and possibly a cost effective method of increasing taxpayer compliance. However, prior studies have failed to show that friendly persuasion has a significant impact on compliance (Blumenthal et al., 2001; McGraw and Scholz, 1991). In our study, in contrast to prior studies, we examine the impact of generating and reading reasons supporting compliance as friendly persuasion on individuals' income reporting behavior as well (...) as control for gender effects. Specifically, we predict an interaction effect between friendly persuasion and gender on compliance behavior. We carried out a 2 (friendly persuasion and control) × 2 (men and women) full factorial experiment, where participants earned $30 by completing two questionnaires. Participants in the friendly persuasion group were required first to generate and second to read a list of reasons why they should comply fully. Afterwards, participants in both groups were asked to report the income they earned and pay tax on the reported income. The results show a significant main effect for gender as well as a significant interaction effect between gender and friendly persuasion on income reported. Women in the friendly persuasion group reported significantly higher income compared to men in that group. Other comparisons were not significant. Policy implications for increasing taxpayers' ethics and compliance are highlighted. (shrink)

This study derives an improved model of managers' decision-making behavior regarding possibly failing projects. Instead of adopting cognitive moral development used by Rutledge and Karim (Accounting, Organization and Society 24, 173-184, 1999) this investigation uses the agency theory framework to consider individual moral philosophy for the improvement of decisions regarding possibly failing projects. This research hypothesizes that a manager with low relativism has a stronger tendency to discontinue a possibly failing project than one with high relativism when agency problem are (...) present or absent. Also, this study suggests that a manager with high idealism has a stronger tendency to discontinue a possibly failing project than one with low idealism. Through experiments this work finds that agency problem is a significant factor on decisions regarding possibly failing projects in all circumstances. This result is consistent with prior literature and shows agency problem universality. Next, the empirical evidence supports the hypothesis that a project manager with low relativism tends to discontinue a possibly failing project more than one with high relativism, showing that individual moral philosophy can partially mitigate the phenomenon of escalating managers' commitment. (shrink)

The purpose of this paper is to determine whether there is a relationship between a person's degree of religiousness and corporate social responsibility orientation. A total of 411 managers and 506 students from seven universities were surveyed. The statistical analysis showed that religiousness does influence students' orientation toward the economic, ethical, and philanthropic responsibilities of business. It does not, however, have a significant impact upon the managers' attitudes. When the "low religiousness" students and managers were compared, differences were found with (...) respect to the economic, ethical, and philanthropic components of corporate social responsibility. Similar results were obtained when the "high religiousness" students and managers were compared. The implications of these findings are discussed. (shrink)

ABSTRACT People tend to be unable to evaluate themselves accurately in many areas. One such area is their own and others’ morality. The current research explores the self–other moral valuation difference in the context of moral foundation theory. We propose that people generally have a moral positive illusion. Specifically, people overestimate their own morality and underestimate the morality of others. Two studies provide converging evidence that individuals underestimate the average moral valuations of others on the five dimensions of moral foundation (...) theory. In particular, we demonstrate three moderators for moral positive illusion: moral foundation type, gender, and political identity. Specifically, compared with the binding foundations, people have greater moral positive illusions based on the individualizing foundations; compared to men, women have greater moral positive illusions; and compared with liberals, conservatives have greater moral positive illusions based on the binding foundations. (shrink)

Although consumers increasingly claim to demand ethical products and state that they are willing to reward firms that are ethical, studies have highlighted that there is a significant gap between consumers’ explicit attitudes toward ethical products and their actual purchase behavior. This has major implications for firm policies revolving around business ethics. This research contributes to the understanding of the attitude–behavior gap in ethical consumption that literature has identified but not explored much. We utilize the model of dual attitudes as (...) a basis for the arguments presented in the paper and test them. We suggest that the gap in ethical consumerism exists because individuals have implicit as well as explicit attitudes, which are impacted differentially by stimuli and elicit dissimilar behavioral responses and thus have different implications for business ethics policies. Two longitudinal studies are conducted to better understand the impact of an individual’s dual attitudes on preferences and choice. Our findings support the presence of dual attitudes in consumers. Explicit attitudes are found to be easily influenced by the nature of the stimuli. On the other hand, implicit attitudes are relatively unaffected by the nature of the stimuli present and remain relatively constant. Based on the findings, implicit attitudes guide behavior and determine an individual’s preferences. Even though explicit attitudes react to the stimuli presented, our findings suggest they have no impact on the choice of consumers. These findings improve the understanding of ethical consumption, provide a reason as to why the attitude–behavior gap exists, provide a foundation for future researchers and help firms better understand the impact of perceived business on creating a behavioral shift in ethical consumption. (shrink)

Prior research has demonstrated that accountants differ from the general population on many personality traits. Understanding accountants’ personality traits is important when these characteristics may impact professional behavior or ability to work with members of the business community. Our study investigates the relationship between Machiavellianism, ethical orientation, anti-intellectualism, and social desirability response bias in Canadian accountants. We find that Canadian accountants score much higher on the Machiavellianism scale than U.S. accountants. Additionally, our results show a significant relationship between Machiavellianism and (...) relativism, idealism, anti-intellectualism, and social desirability response bias. Our results indicate that professional Canadian accountants may not share the same personality characteristics as U.S. accountants. We extend previous research investigating Canadian accountants, by explicitly recognizing the impact of social desirability response bias, and by including anti-intellectualism. (shrink)

This study derives an improved model of managers’ decision-making behavior regarding possibly failing projects. Instead of adopting cognitive moral development used by Rutledge and Karim this investigation uses the agency theory framework to consider individual moral philosophy for the improvement of decisions regarding possibly failing projects. This research hypothesizes that a manager with low relativism has a stronger tendency to discontinue a possibly failing project than one with high relativism when agency problem are present or absent. Also, this study suggests (...) that a manager with high idealism has a stronger tendency to discontinue a possibly failing project than one with low idealism. Through experiments this work finds that agency problem is a significant factor on decisions regarding possibly failing projects in all circumstances. This result is consistent with prior literature and shows agency problem universality. Next, the empirical evidence supports the hypothesis that a project manager with low relativism tends to discontinue a possibly failing project more than one with high relativism, showing that individual moral philosophy can partially mitigate the phenomenon of escalating managers’ commitment. (shrink)

While previous authors have broadly examined the motivations and outcomes of the philanthropic activities of organizations, the present study extends Miska et al.’s rationalistic approach to examine the degree to which managerial philanthropic decision-making behaviour is dominated by morality. This study also tackles the question of whether this relationship is moderated by the strength of the geographical proximity and amount of the donation within an agency framework. To probe the radical agency problem and the effect of intervention, an alternative heuristic (...) scenario is also developed to provide evidence that managers under the same moral level show significant differences in donation intention under a variety of agency conditions. The results indicate a significant difference between the existence and non-existence of agency problems in charitable decision-making by managers high in idealism and relativism; however, at the same time, philanthropic behaviour is intertwined with various dilemma-related contexts. These findings bridge the gap in the literature on ethics and corporate social responsibility, and challenge current thinking on corporate governance mechanisms in this area by offering researchers and practitioners an integrated model that responds to a strong sceptical bias or a high premium placed on morality. (shrink)

In recent years, there has been an increasing interest in unethical work behavior. Several types of survey instruments to collect information about unethical work behavior are available. Nevertheless, to date little attention has been paid to design issues of those surveys. There are, however, several important problems that may influence reliability and validity of questionnaire data on the topic, such as social desirability bias. This paper addresses two important issues in the design of online surveys on unethical work behavior: the (...) response scale for questions regarding the frequency of certain types of unethical work behavior and the location of the background questions in an online survey. We present the results of an analysis of a double split-ballot experiment in a large sample (n = 3,386) on governmental integrity. We found that, when comparing response scales that have labels for all categories with response scales that only have anchors at the end, the latter provided answers with higher validity. The study did not provide support for the conventional practice of asking background questions at the end. (shrink)

The article reports the findings of a study conducted among 387 consumers regarding their perceptions of the unethicality of business practices of firms and how these affect their response behavior, in terms of trust, satisfaction, and loyalty. The study confirmed that high levels of perceived corporate unethicality decrease consumer trust. This in turn reduces consumer satisfaction, which ultimately has negative effects on customer loyalty. It was also revealed that, although both consumer gender and urbanity have a moderating effect on the (...) link between perceived unethicality and trust, the age group and level of education of the consumer did not exhibit such an effect. With regard to consumer cultural characteristics, both high uncertainty avoidance and low individualism were found to increase the negative impact of business unethicality on trust, as opposed to power distance and masculinity that did not have any moderating effect on this relationship. Implications for managers are extracted from the study findings, as well as directions for future research. (shrink)

The purpose of this exploratory study is to examine the use of an ethical intervention strategy - counterexplanation - on individuals' ethical decision-Making. As opposed to providing reasons to support a decision in the case of explanation, counterexplanation is the provision of reasons that either speak against or provide evidence against a chosen course of action. The number of explanations and/or counterexplanations provided by the participants is expected to have a significant effect on ethical evaluation and intention. The number of (...) explanations is expected to be negatively related to ethical decision-making while the number of counterexplanations is expected to be positively related to ethical decision-making. The experiment, that made use of five ethical vignettes, manipulated four treatment groups - explanation, counterexplanation, explanation/counterexplanation, and counterexplanation/explanation. Participants were randomly assigned to one of the four reatments. They performed the requirements of their treatment before recording their ethical evaluations and intentions. As expected, larger numbers of explanations led to less ethical decision-making and larger numbers of counterexplanations led to more ethical decision-making. However, when both types of explanations are required, the order of counterexplaining before explaining is more desirable as it leads to more ethical decision-making. The study also reports that individuals with high social desirability bias may generate less counterexplanations. Implications of the findings are explained in the paper. (shrink)

The purpose of this paper is to determine whether there is a relationship between a person's degree of religiousness and corporate social responsibility orientation. A total of 411 managers and 506 students from seven universities were surveyed. The statistical analysis showed that religiousness does influence students' orientation toward the economic, ethical, and philanthropic responsibilities of business. It does not, however, have a significant impact upon the managers' attitudes. When the "low religiousness" students and managers were compared, differences were found with (...) respect to the economic, ethical, and philanthropic components of corporate social responsibility. Similar results were obtained when the "high religiousness" students and managers were compared. The implications of these findings are discussed. (shrink)