Studies on the ethical culture of organizations have mainly focused on ethical culture at the organizational level. This study explores ethical culture at the team level because this can add a more detailed understanding of the ethics of an organization, which is necessary for more customized and effective management interventions. To find out whether various teams within an organization can have different ethical cultures, we employ the differentiation perspective and conduct a survey of 180 teams from one organization. The results (...) show that there are significant differences between the ethical cultures of teams. These differences are relevant given the different relationships that were established between high and low clusters of team ethical culture and two outcome variables. The results also show that the dimensions of ethical cultures among teams have different patterns, which indicates the usefulness of using a multidimensional scale for capturing further differences among team ethical cultures. (shrink)

Studies on the ethical culture of organizations have mainly focused on ethical culture at the organizational level. This study explores ethical culture at the team level because this can add a more detailed understanding of the ethics of an organization, which is necessary for more customized and effective management interventions. To find out whether various teams within an organization can have different ethical cultures, we employ the differentiation perspective and conduct a survey of 180 teams from one organization. The results (...) show that there are significant differences between the ethical cultures of teams. These differences are relevant given the different relationships that were established between high and low clusters of team ethical culture and two outcome variables. The results also show that the dimensions of ethical cultures among teams have different patterns, which indicates the usefulness of using a multidimensional scale for capturing further differences among team ethical cultures. (shrink)

This paper presents a review of 100 empirical papers studying corporate codes of ethics in business organizations from the time period mid-2005 until mid-2016, following approximately an 11-year time period after the previous review of the literature. The reviewed papers are broadly categorized as content-oriented, output-oriented, or transformation-oriented. The review sheds light on empirical focus, context, questions addressed, methods, findings and theory. The findings are discussed in terms of the three categories as well as the aggregate, stock of empirical CCE (...) studies in comparison with previous reviews, answering the question “where are we now?” Content and output studies still stand for the majority of the studies, whereas the transformation studies are fewer. Within these areas, two new trends are found to have emerged: discursive analyses and a focus on labor conditions. The review finds that the content of CCEs is still predominantly self-defensive, that CCEs are insufficient in themselves in terms of protecting workers’ rights, that CCEs are likely to encounter tensions when implemented across national and organizational boundaries, and that while perception of CCEs is generally positive, CCEs may lead to both positive and negative outcomes. Based on these findings, potential areas for further exploration in the area of CCE research are suggested. (shrink)

A genuine commitment to ethics and compliance (E&C) programs means that top management adopt them for what they represent and not for other purposes. Only then can they truly build socially responsible behavior and a successful and sustainable business, as stated in the latest international standard for compliance management practice (ISO 37301:2021), which we found to be consistent with a new business narrative as conceptualized in Freeman's work. However, it also requires that top managers place a moral value on these (...) practices, rather than simply using them for instrumental reasons. Building on Kohlberg's six stages of moral development as applied to managers' moral thinking, this manuscript offers a model to explain how top managers' moral valuing of these practices varies along a moral reasoning continuum, resulting in four distinct modes. It also theorizes that each mode of moral valuing yields an archetype of E&C programs. It thus offers a new approach that contributes to the business ethics and management literature by incorporating a morally grounded perspective on the adoption and implementation of E&C practices and how it might shape their features and characteristics. It also aims to improve professional practice and business contributions to Freeman's ideas through genuine ethics‐based E&C programs. (shrink)

This exploratory study investigates the manifold conceptions of the internal auditing of risk culture prevalent among four influential actors of the financial sector—regulators, normalizers, consultants, and implementers. By inductive analysis of 20 interviews and 295 documents, we illustrate a two-step interpretive scheme utilized by the four actors in their IA approaches of risk culture: defining broad goals and designing visibility schemes. The visibility schemes were tied to the demarcation, measurement, as well as the IA data collection techniques of risk culture. (...) Our results indicate two dichotomous interpretations among the four actors concerning the IA of risk culture. The first interpretation, prevalent among regulators and implementers, promotes the control of risk culture primarily through verification. The second interpretation, adopted by consultants and normalizers, promotes the control of risk culture by IA along with the empowerment of employees through training programs. Our results not only contribute to understanding IA expansions, specifically to non-tangible domains such as risk culture but also enrich the literature exploring the mechanisms different stakeholders utilize to shape weakly professionalized IA practices. (shrink)

The article deals with the influence of organizational ethics program components on managerial ethical behavior. The main aim was to establish which EP components are perceived as valuable and useful to foster the ethical behavior of managers. Moreover, we also aimed to investigate the role of ethics training in this context and to explore whether it can potentially increase managers’ trust in EP components as effective tools for the promotion of ethical behavior. The article advances the EP theory in several (...) ways. It offers novel insights into both business ethics and EP development in the specific cultural and social circumstances of a former socialist country in the Central and Eastern European region, Slovakia. It shows that codes of ethics and related reporting and control mechanisms are perceived as the most effective EP components to shape managerial ethical behavior. Furthermore, based on empirical evidence, and to some extent contrary to prior theory, the article unveils three EP functions, namely the ‘compliance with group norms,’ the ‘ethics education through collective discussion,’ and the ‘counselling and resolving of ethical issues’ at workplace. In addition, the article shows that ethics trainings can help to boost the trust of managers toward EP components and might be conceptualized as a precursor for an effectively functioning EP. (shrink)

The paper explores the interrelations between ethical organisational culture and organisational innovativeness in two different socio-cultural contexts, Finland and Lithuania. According to the Global Innovation Index 2013, Finland ranked 6th and Lithuania 40th in terms of the national capacity to produce innovations. Prior research by Riivari and Lämsä and Riivari et al. argues the importance of the ethical dimension of organisational culture in fostering the organisational capacity to innovate. In this paper, a different context is taken to test hypothesised differences (...) between the two multidimensional phenomena. The paper discusses the findings of 2 surveys in Finnish and Lithuanian public organisations. Data analysis shows that ethical organisational culture affects organisational innovativeness, in particular process and behaviour innovativeness in both organisations. The findings suggest that some ethical virtues such as congruency of management, discussability and clarity can be explained by an institutional rather than socio-cultural context. However, the effect of transparency and sanctionability in the Finnish organisation and congruency of supervisors, supportability and feasibility in the Lithuanian organisation rests on peculiarities of a socio-cultural context. (shrink)

Corporate social responsibility (CSR) aspirations by companies have been identified as a motivating factor for active employee participation in CSR implementation. However, a failure to practise what one preaches can backfire and lead to attribution of hypocrisy. Drawing on a qualitative study of an award-winning sustainability pioneer in the cosmetics sector, we explore the role of moral judgement in how and when employees interpret word–deed misalignment in CSR implementation as hypocritical. First, our case reveals that high CSR aspirations by companies (...) raise employees’ moral expectations. Second, we develop a framework that explains variations in employees’ hypocrisy interpretations based on consequentialist and deontological forms of moral judgement. Our research advances a contextual view of hypocrisy, not as an objective characteristic of an organisation, but as an outcome of interpretative processes of perceived motives and results in CSR implementation. Our framework thereby explains why even highly committed organisations may face accusations of hypocrisy. (shrink)

AbstractEnduring unethical behavior in trading has generated much research interest, and scholars disagree on the reasons for this situation. According to MacIntyre (2015), this has to do with the personal traits of traders, whereas Rocchi and Thunder (2019) argue this is due to permissive work environment that can potentially be changed to favoring ethical trading. We contribute to this debate by exploring how interactions between organizational culture and management control systems (MCSs) may affect the enduring unethical behaviors of traders. We (...) conceptualize this with the concepts of organized hypocrisy (Brunsson 1986, 1989, 1993) and decoupling (Meyer and Rowan 1977). An in-depth case study of fraud (Jerome Kerviel at Societe Generale), informs the empirical inquiry. We develop the concept of organized decoupling to characterize how the MCSs are articulated with the organizational culture favoring unethical behavior, while being used as a ‘safety mechanism’ to manage the legal and reputational risk of the bank. The analysis highlights three key features of the organized decoupling of MCS: physical distance, technical distance and social distance. The study contribution lies in showing that decoupling is not only emergent but might be intended and therefore organized. The findings also raise doubts on the role of MCSs in monitoring trading activities as presented by investment banking institutions and regulators, suggesting more organized hypocrisy, and raising significant concerns regarding the creation of tolerable work environment welcoming ethical behaviors in the investment banking sector. (shrink)

Organizations are faced with the question, not only whether to adopt an ethics program, but also which components to adopt when. This study shows that unethical behavior occurs less frequently in organizations that have an ethics program than in organizations that do not have an ethics program. Nine components of ethics programs were identified and examined. The results show that there is a direct relationship between the number of components adopted and the frequency of observed unethical behavior. No relationship was (...) found between pre-employment screening and unethical behavior, while the strongest relationship was discerned between accountability policies and unethical behavior. The study further reveals that the best sequence for adopting components of an ethics program is a code of ethics, ethics training and communication, accountability policies, monitoring and auditing, and investigation and correction policies—all of which are directly related to less unethical behavior—followed by an ethics office, ethics report line, and incentive policies—all of which are indirectly related to less unethical behavior. With the exception of pre-employment screening, this sequence corresponds closely to the pattern of adoption of organizations in the U.S. (shrink)

While there are companies whose codes of ethics state that mere appearance of unethical behavior by employees is morally unacceptable, this so‐called appearance standard has hardly received any attention in the business ethics literature. Using corporate integrity theory, this article explores the criteria that may explain how mere appearances of unethical behavior can arise (i.e., the presence of conflicts of interests, the entanglement of these interests, a reputation for lack of integrity, and deviant outcomes) and those that may make such (...) appearances morally unacceptable (i.e., foreseeability, avoidability, and seriousness). The article proposes remedies for preventing and resolving instances when mere appearance of unethical behavior is morally unacceptable. (shrink)

Due to the economic globalization which is characterized with business scandals, scholars and practitioners are increasingly engaged with the implementation of codes of ethics as a regulatory mechanism for stimulating ethical behaviours within an organization. The aim of this study is to examine various organizational practices regarding the effective implementation of codes of ethics within construction contracting companies. Views on ethics management in construction organizations together with the recommendations for improvement were gleaned through 19 semi-structured interviews, involving construction practitioners from (...) various construction companies in Hong Kong. The findings suggested some practices for effective implementation of codes of ethics in order to diffuse ethical behaviours in an organizational setting which include; introduction of effective reward schemes, arrangement of ethics training for employees, and leadership responsiveness to reported wrongdoings. Since most of the construction companies in Hong Kong have codes of ethics, emphasis is made on the practical implementation of codes within the organizations. Hence, implications were drawn from the recommended measures to guide construction companies and policy makers. (shrink)

Multi-level marketing companies such as Amway, Herbalife, or Tupperware differ from most other companies. They market their products and services by means of self-employed distributors who typically work from home, sell products to end consumers, and recruit, motivate, and educate new distributors to do the same. Although the industry’s growth seems to illustrate the attractiveness of MLMs, the industry has been facing several legal and ethical problems. In this paper, we focus on these problems and argue that an extended MLM (...) model may help us to understand why such problems continue to occur, despite the countermeasures that have been implemented. By explicating how problems relate to a specific but often overlooked characteristic of MLMs, i.e., the so-called distributor network, we provide an extended understanding of MLMs’ mode of operation, the sources of their legal and ethical problems, and the reason that currently implemented and suggested countermeasures may not suffice. Moreover, based on our extended understanding of MLMs and their problems, we propose additional countermeasures. (shrink)

Business and Society Review, Volume 127, Issue 1, Page 69-96, Spring 2022.