Continual corporate malfeasance signals the need for obeying the law and for enhancing business ethics perspectives. Yet, the relationship between law and ethics and its integrative role in defining values are often unclear. While integrity-based ethics programs emphasize ethics values more than law or compliance, viewing ethics as being integrated with law may enhance understanding of an organization’s core values. The author refers to this integration of law and ethics as “substantive ethics,” analogous to the substantive law that evolves over (...) time, which is applied to ethical breaches and carries sanctions for non-compliance. This article describes the integration of law and ethics as a mid-point between two polar views that define law and ethics either as having no relation or as being one and the same. Since corporations expressly state which laws they follow, a sample of corporate compliance statements is used to demonstrate this integrative mid-point. The sample also reveals that corporate ethics codes rarely express ethics and law as being integrated per se. Therefore, the author creates an example of a securities law compliance statement that is introduced with an integrative perspective of law and ethics. Perhaps such revised corporate codes will encourage corporate respect for both law and ethics and enhance ethical sustainability. (shrink)

Using a sample of multinational firms in Germany, we develop and empirically examine a model to test the effects of ethical climate and its antecedents on purchasing social responsibility (PSR). Our results show different effects of benevolence dimensions of ethical climate on PSR: employee-focused climate has no effect, but community-focused climate is a significant driver of PSR. The results also show that top management ethical norms and code of conduct implementation impact PSR directly as well as indirectly through ethical climate.

Ethics researchers advise managers of organizations to link rewards and punishments to ethical and unethical behavior, respectively. We build on prior research maintaining that organizations operate at Kohlbergs stages of moral reasoning, and explain how the over-reliance on rewards and punishments encourages employees to operate at Kohlbergs lowest stages of moral reasoning. We advocate designing organizations as ethical communities and relying on different assumptions about employees in order to foster ethical reasoning at higher levels. Characteristics associated with ethical communities are (...) identified and AES Corporation and Semco S/A serve as examples of corporations exhibiting the design characteristics and assumptions of ethical organizations. (shrink)

Of recent time, there has been a concern about ethical leadership and ethics in business. Research on leadership did not pay a lot of attention to fairness and many authors have studied the relationship between leader fairness and factors such as outcome satisfaction and trust in leader for instance. For the moment, there is no study that focused on the direct relationship between transformational leadership and fairness. That’s why; in this paper our aim is to study the relationship between transformational (...) leadership and the employees’ perceptions of fairness, mainly the three types of fairness which are distributive, procedural, and interactional in French firms. A questionnaire survey was sent to employees working in the industry and service sectors. A sample of 100 respondents was collected. We found a partial relationship between employees’ perceptions of fairness and transformational leadership. More specifically, we found that procedural and interactional fairness are strongly associated with transformational leadership. (shrink)

There are three types of solutions to the problems deriving from companies' ethical, social and environmental responsibilities: those based on regulation by an authority or agency; those deigned to create market incentives; and those that rely on self-regulation by companies themselves. In the specific field we are concerned with here, regulation has significant costs and drawbacks that make it particularly desirable that companies should set up their own ethical, social and environmental management systems or programmes. The purpose of this article (...) is twofold. On the one hand, it explains how implementing voluntary ethical, social and environmental management systems or programmes may help to develop and sustain ethical behaviour in organizations, overcoming the conflict between compulsory regulation and occasional ethical practices. On the other hand, it shows that conditions must be met for an ethical management programme to be effective. (shrink)

This study focuses on comparison of perceptions of ethical business cultures in large business organizations from four largest emerging economies, commonly referred to as the BRICs (Brazil, Russia, India, and China), and from the US. The data were collected from more than 13,000 managers and employees of business organizations in five countries. The study found significant differences among BRIC countries, with respondents from India and Brazil providing more favorable assessments of ethical cultures of their organizations than respondents from China and (...) Russia. Overall, highest mean scores were provided by respondents from India, the US, and Brazil. There were significant similarities in ratings between the US and Brazil. (shrink)

The purpose of this study was to identify general characteristics attributed to ethical business cultures by executives from a variety of industries. Our research identified five clusters of characteristics: Mission- and Values-Driven, Stakeholder Balance, Leadership Effectiveness, Process Integrity, and Long-term Perspective. We propose that these characteristics be used as a foundation of a comprehensive model that can be engaged to influence operational practices in creating and sustaining an ethical business culture.

Codes of ethics exist in many, if not the majority, of all large U.S. companies today. But how the impact of these written codes affect managerial attitudes and behavior is still not clearly documented or explained. This study takes a step in that direction by proposing that attention should shift from the codes themselves as the sources of ethical behavior to the persons whose behavior is the focus of these codes. In particular, this study investigates the role of code familiarity (...) as a factor impacting the influence of an ethics code on manager behavior. Data collected from 286 executives from companies in the direct selling industry are used to test hypotheses (1) that the perceived usefulness of ethics codes is positively related to the degree of familiarity with the code, and (2) that ethical climate as assessed by managers is positively related to the code''s perceived usefulness. Both hypotheses are supported, and their implications and further research directions are discussed. (shrink)

Abstract:Organizational justice and injustice are widely noted influences on employees’ ethical behavior. Corporate ethics programs also raise issues of justice; organizations that fail to “follow-through” on their ethics policies may be perceived as violating employees’ expectations of procedural and retributive justice. In this empirical study of four large corporations, we considered employees’ perceptions of general organizational justice, and their perceptions of ethics program follow-through, in relation to unethical behavior that harms the organization, and to employees’ willingness to help the organization (...) by reporting ethical problems and issues to management. Results show that when employees perceive general organizational justice and ethics program follow-through, there is less unethical behavior and greater willingness to report problems. General justice and ethics program follow-through also interact with each other, showing that the impact of ethics initiatives is influenced by the organizational context. (shrink)

Abstract:This essay examines how normative theories of enterprise can be strengthened by incorporating the empirical study of motivation into the theory-development process. The link between moral conduct and motivation in the literature is reviewed, the framework for Motivational Appeal Analysis introduced and applied, and implications for theory and research are discussed.

This study examined the direct influence of national economic condition, as well as the indirect effects through the strength of noneconomic institutions on supervisors’ ethical reasoning using the institutional anomie theory developed by Messner and Rosenfeld :1393–1416, 2001). Utilizing data of 20,025 supervisors across 52 countries, the analyses showed that high disparity in the economic distribution directly and indirectly leads to unethical values. High economic inequality in a country resulted in high tendency of supervisors to justify unethical acts. In addition, (...) some of this influence went through the institutional strength of family, education, polity, and religion, thereby indicating partial mediation. As a result, the study presented the important roles of social institutions in explaining supervisors’ attitude and behavior. The findings of this research contribute to the institutional anomie theory by clarifying the multilevel path of the macrostructures’ conditions in explaining supervisors’ ethicality. Moreover, since some of the relationships between variables resulted in the direction opposite to the propositions of the theory, this study suggested other theoretical models that may be integrated with IAT. Along with these theoretical contributions, practical implications to businesses and society are discussed to strengthen supervisors’ ethics. (shrink)

Abstract:This field survey focused on two constructs that have been developed to represent the ethical context in organizations: ethical climate and ethical culture. We first examined issues of convergence and divergence between these constructs through factor analysis and correlational analysis. Results suggested that the two constructs are measuring somewhat different, but strongly related dimensions of the ethical context. We then investigated the relationships between the emergent ethical context factors and an ethics-related attitude (organizational commitment) and behavior (observed unethical conduct) for (...) respondents who work in organizations with and without ethics codes. Regression results indicated that an ethical culture-based dimension was more strongly associated with observed unethical conduct in code organizations while climate-based dimensions were more strongly associated with observed unethical conduct in non-code organizations. Ethical culture and ethical climate-based factors influenced organizational commitment similarly in both types of organizations. Normative implications of the study are discussed, as are implications for future theorizing, research and management practice. (shrink)

This study elucidates the link and effect of ethical reinforcement in the post‐financial crisis era by taking two congruent directions to demonstrate that ethical reinforcement can be accomplished by either a continuous ethical training or a meticulous code of business ethics—which members of the mutual fund industry claim they adhere to—as both have a positive effect on the funds’ performance, including sizeable gains to investors. Furthermore, evidence divulges that ethical reinforcement moderates the performance of ethical or socially responsible investments (SRI) (...) funds more than nonethical investments, suggesting that a perspective of ethical or SRI classification of a fund alone is not sufficient, but it is necessary to have the institutional ethical environment and/or managers’ continuous ethical training. This result supports the notion of financial market discipline and reveals some factors behind SRI or ethical funds returns, notably during the period following the recent financial crisis. (shrink)

Media increasingly accuse firms of exploiting suppliers, and these allegations often result in lurid headlines that threaten the reputations and therefore business successes of these firms. Neither has the phenomenon of supplier exploitation been investigated from a rigorous, ethical standpoint, nor have answers been provided regarding why some firms pursue exploitative approaches. By systemically contrasting economic liberalism and just prices as two divergent perspectives on supplier exploitation, we introduce a distinction of common business practice and unethical supplier exploitation. Since supplier (...) exploitation is based on power, we elucidate several levels of power as antecedents and investigate the role of ethical climate as a moderator. This study extends Victor and Cullen’s ethical climate matrix according to a supply chain dimension and is summarized in an integrated, conceptual model of five propositions for future theory testing. Results provide a frame of reference for executives and scholars, who can now delineate unethical exploitation and understand important antecedents of the phenomenon better. (shrink)

The authors use the theoretical notion of anomie to examine the impact of top management's control mechanisms on the environment of the marketing function. Based on a literature review and in-depth field interviews with marketing managers in diverse industries, a conceptual model is proposed that incorporates the two managerial control mechanisms, viz. output and process control, and relates their distinctive influence to anomie in the marketing function. Three contingency variables, i.e., resource scarcity, power, and ethics codification, are proposed to moderate (...) the relationship between control mechanisms and anomie. The authors also argue for the link between anomic environments and the propensity of unethical marketing practices to occur. Theoretical and managerial implications of the proposed conceptual model are discussed. (shrink)

In modern and well-structured universities, ethics centers are playing a key role in hosting, organizing, and managing activities to enrich and guide students’ ethical thinking and analysis. This paper presents a comprehensive survey of the goals, activities, and administration of ethics centers, as well as their role in promoting ethical thinking for academic, career, and business purposes. The paper also gives an overview of the most common activities organized by these hubs in order to highlight their contributions to pedagogy, student (...) learning and intellectual growth, research development, and community service. This study is based on an intensive review conducted on seventy-five ethics centers established in universities and colleges around the globe. First, it provides administrations of academic institutions with the basic knowledge needed to plan for potential new ethics centers. They can benefit from the present expertise of described ethics centers and project the practical methodologies on their university needs. In addition, directors and coordinators of established ethics centers would enhance their experience by including new activities and collaborations to their plans. Finally, ethics course instructors can benefit from the listed activities to increase student involvement by including practical methods and discussions beyond the classroom. (shrink)

Abstract:The randomized response technique (RRT) is used to study the deceptive behavior of purchasing agents. We test the proposition that purchasing agents’ perceptions of organizational expectations influence their behavior. Results indicate that perceived pressure to perform and ethical ambiguity on the part of the firm are correlated with purchasing agents’ unethical behavior, in the form of acknowledged deception of suppliers.

Recently, Hosmer (1994a) proposed a model linking right, just, and fair treatment of extended stakeholders with trust and innovation in organizations. The current study tests this model by using Victor and Cullen''s (1988) ethical work climate instrument to measure the perceptions of the right, just, and fair treatment of employee stakeholders.In addition, this study extends Hosmer''s model to include the effect of right, just, and fair treatment on employee communication, also believed to be an underlying dynamic of trust.More specifically, the (...) current study used a survey of 111 managers to test (1) whether right, just, and fair treatment influences trust, both directly as well as indirectly via communication, and (2) whether trust influences perceptions of commitment and innovation. Strong support for the study''s hypotheses and Hosmer''s (1994a) model was found. Such findings support those who argue that moral management may be good management. (shrink)

Abstract:The randomized response technique (RRT) is used to study the deceptive behavior of purchasing agents. We test the proposition that purchasing agents’ perceptions of organizational expectations influence their behavior. Results indicate that perceived pressure to perform and ethical ambiguity on the part of the firm are correlated with purchasing agents’ unethical behavior, in the form of acknowledged deception of suppliers.

This article introduces a new scale to measure executive servant leadership, situating the need for this scale within the context of ethical leadership and its impacts on followers, organizations and the greater society. The literature on servant leadership is reviewed and servant leadership is compared to other concepts that share dimensions of ethical leadership (e.g., transformational, authentic, and spiritual leadership). Next, the Executive Servant Leadership Scale (ESLS) is introduced, and its contributions and limitations discussed. We conclude with an agenda for (...) future research, describing ways the measure can be used to test hypotheses about organizational moral climate, ethical organizational culture, corporate responsibility, and institutional theory. (shrink)

The authors propose the integrity capacity construct with its four dimensions (process, judgment, development and system dimensions) as a framework for analyzing and resolving behavioral, moral and legal complexity in business ethics' issues at the individual and collective levels. They claim that moral progress in business comes about through the increase in stakeholders who regularly handle moral complexity by demonstrating process, judgment, developmental and system integrity capacity domestically and globally.

There is a need for further research to understand how social capital in the workplace can be promoted. This article studies the generation of social capital from a comprehensive perspective that integrates ethics and general management. We propose the concept of “ethical work context” as an influential antecedent of the social capital in the firm. The ethical work context, which is aligned with the “humanizing culture” approach proposed by Melé ( Journal of Business Ethics 45 (1), 3–14, 2003a ), allows (...) a broader comprehension of the concrete management practices and organizational dynamics that generate organizational social capital. It is argued that social capital, understood as a by-product of the ethical work context, results both from organizational design and ongoing managerial activity. Creating an ethical work context brings ethics and social capital into the realm of the general manager; a figure that has remained absent from the social capital literature. (shrink)

Abstract:This field survey focused on two constructs that have been developed to represent the ethical context in organizations: ethical climate and ethical culture. We first examined issues of convergence and divergence between these constructs through factor analysis and correlational analysis. Results suggested that the two constructs are measuring somewhat different, but strongly related dimensions of the ethical context. We then investigated the relationships between the emergent ethical context factors and an ethics-related attitude (organizational commitment) and behavior (observed unethical conduct) for (...) respondents who work in organizations with and without ethics codes. Regression results indicated that an ethical culture-based dimension was more strongly associated with observed unethical conduct in code organizations while climate-based dimensions were more strongly associated with observed unethical conduct in non-code organizations. Ethical culture and ethical climate-based factors influenced organizational commitment similarly in both types of organizations. Normative implications of the study are discussed, as are implications for future theorizing, research and management practice. (shrink)

ABSTRACT:Despite widespread attention to corruption and organizational change in the literature, to our knowledge, no research has attempted to understand the linkages between these two powerful organizational phenomena. Accordingly, we draw on major theories in ethics, sociology, and management to develop a theoretical framework for understanding how organizational change can sometimes generate corruption. We extend anomie theory and ethical climate theory to articulate the deinstitutionalization of the normative control system and argue that, through this deinstitutionalization, organizations have the potential to (...) become incubators for corruption. We qualify this process by proposing conditions more ripe for anomie and under which this deinstitutionalization is more likely to occur, propounding moderating relationships that influence organizational reconfiguration. Examples of turbulence in the contemporary business environment that can trigger change highlight our discussion. We conclude with managerial implications, offering means by which the deleterious effects of corruption may be arrested or controlled. (shrink)

Drawing on the theoretical insights from the resource-based view of the firm, this paper explores how human resource systems may contribute to competitive advantage by facilitating the development and maintenance of five types of ethical climates, and conversely, how HR systems may hinder competitive advantage by inhibiting the development and maintenance of these climate types. In so doing, this paper contributes to the literature by highlighting the resource worthiness of a firm's ethical climates and showing how HR systems may influence (...) that value. In addition, it advances theory that underpins the concept of competitive advantage sustainability and provides a platform for future empirical research. (shrink)

A major challenge in global sales research is helping managers understand sales ethics across countries. Addressing this challenge, our research investigates whether a few demographic variables and psychographic variables reduce unethical sales behaviors (USBs) in Canada, Mexico, and the USA. Further, using literatures associated with business ethics, national culture, and customer orientation advocacy, we hypothesize why sales managers should expect similarities and differences in USBs between countries. We tested hypotheses using a sales contest scenario and six USBs, examining survey responses (...) from 948 business-to-business salespeople of a multinational company’s sales force in Canada, Mexico, and the USA. The results reveal that several psychographic variables (such as commitment, relationship to sales manager, and achievement need) affect salespeople’s tendency to engage in USBs differently in each country. In addition, business ethics, individualism, and customer orientation advocacy associated with each country can be used to anticipate similarities and differences in USBs between countries. This research offers important theoretical contributions and implications for more effectively managing sales forces and reducing USBs across countries. (shrink)

Efforts to institutionalize ethics in corporations have been discussed without first addressing the desirability of norm conformity or the possibility that the means used to elicit conformity will be coercive. This article presents a theoretical context, grounded in models of social control, within which ethics initiatives may be evaluated. Ethics initiatives are discussed in relation to variables that already exert control in the workplace, such as environmental controls, organizational controls, and personal controls.

Family firm leaders acting as stewards of a close-knit enterprise may attempt to build a positive atmosphere of trust, clarity, and cohesiveness in the firm’s operation. Yet, conditions unique to family firms may lead some family members to develop a heightened sense of entitlement and weaker bonds to the organization. This creates conditions for a Fredo effect, where a family member’s incompetence, opportunistic behaviors, and/or ethically dubious actions can impede the firm’s success, potentially resulting in a scandal that could lead (...) to the firm’s demise and negative economic impact on employees, customers, and other stakeholders. Surveying 147 family-firm members, we examine the role that linkages among perceptions of family harmony norms, distributive fairness, role ambiguity, and relationship conflict play in the emergence of a family member who acts as an impediment to the firm, which can be manifested in damaging unethical behaviors. As hypothesized, family harmony norms and fairness perceptions are negatively related to family impediment, while role ambiguity is positively related to family impediment. However, relationship conflict mediates these connections, underscoring the potential damage this type of conflict can create in a family firm, even if leaders of the firm attempt to establish conditions that reflect a stewardship approach to firm governance. We discuss how these findings impact the development of an ethical climate in the family firm and the implications for family business survival or scandal. (shrink)

This article reports the results of research to develop a survey instrument and its use to validate an ethical business culture construct (CEBC Model). The reported three-stage quantitative study builds on our previous qualitative work, aimed at identifying dimensions of ethical business cultures. The research resulted in a parsimonious construct, covering five dimensions of ethical business cultures, and a ten-question instrument, measuring this construct. In this article, we report results of exploratory and confirmatory factor analyses and convergent construct validity testing, (...) discuss the potential applications of the construct and instrument in assessment and development of ethical business cultures, and provide recommendations for industry practitioners and for further research. (shrink)

ABSTRACT:Anomie is a condition in which normative guidelines for governing conduct are absent. Using survey data from a sample of U.S. manufacturing firms, we explore the impact of internal (cultural) and external (environmental) determinants of organizational anomie. We suggest that four internal organizational factors can generate or suppress organizational anomie, including strategic aggressiveness, long-term orientation, competitor orientation, and strategic flexibility. Similarly, we argue that external contextual factors, including competitive intensity and technological turbulence, can influence organizational anomie. We extend anomie and (...) ethics research by considering the impact of these firm cultural and environmental factors according to whether firms are publicly-traded or privately-held. Findings demonstrate that a number of firm cultural and environmental factors can generate or reduce anomie in firms. Moreover, strategic aggressiveness, long-term orientation, and strategic flexibility influence organizational anomie differently depending on whether the firm is publicly-traded or privately-held. Theoretical and practical implications of our findings are discussed. (shrink)

Due to the frequent occurrence of ethical transgressions and unethical employee behaviors, there has lately been an increasing interest in the ethical foundations of contemporary organizations. However, large-scale comprehensive analyses of organizational ethics are still comparatively limited. Our study contributes to both management control and business ethics literature by empirically examining potential antecedents as well as resulting effects of ethical work climates on organizational-level outcomes. Based on a cross-sectional survey among 295 large- and medium-sized companies, we find that more informal (...) means of control constitute important elements of a broader organizational control context that are strongly related to the emergence of coherent ethical work climates with an increased awareness of ethical issues. Moreover, our results show that the relationship between ethical work climates and organizational performance can be considered as rather indirect as it is fully mediated by increased mutual trust among employees. Overall, our study thus supports the particular importance of ethical work climates and identifies appropriate means to encourage ethical conduct. (shrink)

The paper reports on research undertaken in three organisations seeking to explore anomie at work. This research explores whether a distinction in the levels of anomie between people's perception of the work and non-work contexts exists in three organisations, that is whether people are more likely to feel more hopeless and helpless in their work or non-work life. It also looks at whether people in different organisations have significantly different levels of anomie. A significant difference in the non-work anomie between (...) organisations, but no significant difference in work anomie between organisations, was found. In the three organisations researched, the anomie score in the non-work context is lower than in the work context, indicating that respondents perceive the work context as more anomic. The work anomie for the total sample was found to be significantly higher that the non-work anomie. The implications for ethical behaviour at work and business ethics are discussed. (shrink)

The Kohlberg Gilligan Controversy has received intermittent but inconclusive attention for many years, perhaps reflecting the difficulty of bridging the two positions. This article explores the published evidence for Gilligan’s claims of gender difference, gender identity difference, and role of caring in people’s ethics. It seems that the evidence for pronounced gender differences in ethical attitudes within business is weak, even if gender identity is used instead of physical gender. The main propositions of Care Theory and recent advances in its (...) thinking are discussed. Special focus emerges on the notion of Attachment which seems to be the Care Theory ingredient both most able to survive critical scrutiny and most promising for bridging the divide between the Kohlberg and Gilligan paradigms. The Social Bonding Model and other possible bridge building conceptual structures are introduced. Finally, Max Weber’s division between ethics of conviction and ethics of responsibility provides an overarching perspective both of the gap still to be bridged and the need to keep trying to bridge it. (shrink)

The Kohlberg Gilligan Controversy has received intermittent but inconclusive attention for many years, perhaps reflecting the difficulty of bridging the two positions. This article explores the published evidence for Gilligan's claims of gender difference, gender identity difference, and role of caring in people's ethics. It seems that the evidence for pronounced gender differences in ethical attitudes within business is weak, even if gender identity is used instead of physical gender. The main propositions of Care Theory and recent advances in its (...) thinking are discussed. Special focus emerges on the notion of Attachment which seems to be the Care Theory ingredient both most able to survive critical scrutiny and most promising for bridging the divide between the Kohlberg and Gilligan paradigms. The Social Bonding Model and other possible bridge building conceptual structures are introduced. Finally, Max Weber's division between ethics of conviction and ethics of responsibility provides an overarching perspective both of the gap still to be bridged and the need to keep trying to bridge it. (shrink)