A study was conducted in order to examine the relationship between corporate codes of ethics and behaviour. Fifty-seven interviews of employees, managers, and ethics officers were conducted at four large Canadian companies. The study found that codes of ethics are a potential factor influencing the behaviour of corporate agents. Reasons are provided why codes are violated as well as complied with. A set of eight metaphors are developed which help to explain how codes of ethics influence behaviour.

Are corporate codes of ethics necessarily ethical? To challenge this notion, an initial set of universal moral standards is proposed by which all corporate codes of ethics can be ethically evaluated. The set of universal moral standards includes: (1) trustworthiness; (2) respect; (3) responsibility; (4) fairness; (5) caring; and (6) citizenship. By applying the six moral standards to four different stages of code development (i.e., content, creation, implementation, administration), a code of ethics for corporate codes of ethics is constructed by (...) which companies can be ethically audited for compliance. The newly proposed code of ethics for corporate codes of ethics was then applied to four large Canadian companies representing a variety of industries: telecommunications; banking, manufacturing, and high technology. The ethical audit of the four companies' ethics programs based on the proposed code indicates that all four companies have room to improve the ethical nature of their codes of ethics (i.e., content, creation, implementation, administration). (shrink)

Board composition, insider participation on compensation committees, and director compensation practices can potentially cause conflicts of interest between directors and shareholders. If these corporate governance structures result in situations where actions beneficial to directors do not also benefit shareholders, then shareholders may suffer.Corporate ethics programs usually address conflicts of interest that may arise in the firm''s activities. Some boards of directors take active roles in their firms'' ethics programs by actively overseeing the programs. This paper empirically examines the relationship between (...) ethics programs and potential conflicts of interest and the relationship between board involvement in a firm''s ethics program and potential conflicts of interest. (shrink)

In 1999, the Journal of Business Ethics published its 1 500th article. This article commemorates the journal's quest "to improve the human condition" (Michalos, 1988, p. 1) with a summary and assessment of the first eighteen volumes. The first part provides an overview of JBE, highlighting the journal's growth, types of methodologies published, and the breadth of the field. The second part provides a detailed account of the quantitative research findings. Major research topics include (1) prevalence of ethical behavior, (2) (...) ethical sensitivities, (3) ethics codes and programs, (4) corporate social performance and policies, (5) human resource practices and policies, and (6) professions – accounting, marketing/sales, and finance/strategy. Much remains to be done. (shrink)

Notwithstanding empirical evidence that combining ethics and compliance into one function or programme is likely to erode an ethical culture in organisations, the praxis to coalesce ethics and compliance conceptually and structurally remains attractive and continues in many organisations. Drawing on systems psychodynamic theory, this study enquires into unconscious complexities and drivers that may contribute to adverse consequences when combining ethics and compliance. Whereas previous research demonstrates that compliance dominates ethics because of self‐regulation issues, this research provides deeper insight into (...) why this happens. On explicating the unconscious dynamics that underlie the apparent lure of combination, it becomes clear that this praxis remains attractive because of its function to repress anxieties, maintain phantasies, and provide psychological comfort. In recognising the role of unconscious dynamics in the decision to combine ethics and compliance and the consequences thereof, cognition of this combination and its outcomes is moved beyond a conscious rational process. This elucidates the commanding opposing unconscious forces potentially at play in this decision. Insights could lessen adverse outcomes by prompting organisations to think of the combination of ethics and compliance as unconsciously motivated systemic processes that require sincere consideration before pursuing them. (shrink)

Since its inception, Stakeholder Management Capability (SMC) has constituted a powerful hermeneutic through which business organizations have understood and leveraged stakeholder relationships. On this model, achieving a high level of capability largely depends on managerial ability to effectively bargain with stakeholders and establish solidarity vis-à-vis the successful negotiation, implementation, and execution of "win–win" transactional exchanges. Against this account, it is rightly pointed out that a transactional explanation of stakeholder relationships, regarded by many as the bottom line for stakeholder management, fails (...) to provide managerial direction regarding how to resolve a variety of normative stakeholder claims that resist commoditization. In response to this issue, this paper has two overlapping goals. It seeks to elaborate a discourse theoretical approach to the problem by first drawing out Jurgen Habermas’ theory of communicative action and delineating the various types of rational discourse. Second, the paper attempts to present concrete implications for SMC relative to reshaping the contours of rational, process, and transactional analysis in light of central discourse theoretical conclusions. (shrink)

In the process of implementing an ethical code of conduct, a business organization uses formal methods. Of these, training, courses and means of enforcement are common and are also suitable for self-regulation. The USA is encouraging business corporations to self regulate with the Federal Sentencing Guidelines (FSG). The Guidelines prescribe similar formal methods and specify that, unless such methods are used, the process of implementation will be considered ineffective, and the business will therefore not be considered to have complied with (...) the guidelines. Business organizations invest enormous funds on formal methods. However, recent events indicate that these are not, by themselves, yielding the desired results. Our study, based on a sample of 812 employees and conducted in an Israeli subsidiary of a leading multinational High-Tech corporation headquartered in the US, indicates that, of the methods used in the process of implementation, one of the informal methods (namely, the social norms of the organization) is perceived by employees to have the most influence on their conduct. This result, when examined against employee tenure, remains relatively stable over the years, and stands in contradistinction to the formalistic approach embedded in the FSG. We indirectly measure the effectiveness of the percieved most influential implementation process methods by analyzing their impact on employee attitudes (namely, personal ethical commitment and employees'' commitment to organizational values). Our results indicate that the informal methods (manager sets an example or social norms of the organization) are likely to yield greater commitment with respect to both employee attitudes than the formal method (training and courses on the subject of ethics). The personal control method (my own personal values) differs significantly from all the other methods in that it yields the highest degree of personal ethical commitment and the lowest degree of employees'' commitment to organizational values. (shrink)

A two stage model was developed and tested to explain how ethical leadership relates to followers’ ethical judgment in an organizational context. Drawing on social learning theory, ethical leadership was hypothesized to promote followers’ self-leadership focused on ethics. It was found that followers’ perceived accountability fully accounts for this relationship. In stage two, the relationship between self-leadership focused on ethics and moral judgment in a dual decision-making system was described and tested. Self-leadership focused on ethics was only related to moral (...) judgment when followers use active judgment as opposed to their intuition. This provides support that a deliberate application of self-leadership focused on ethics leads to higher moral judgment. Theoretical and practical implications as well as future research opportunities are discussed. (shrink)

The purpose of this paper is to provide a constructive criticism of Corporate Social Responsibility (CSR) standards. After pointing out a number of benefits and limitations in the effectiveness of CSR standards, both from a theoretical point of view and in the light of empirical evidence, we formulate and discuss a Paradox of CSR standards: despite being well-intended, CSR standards can favor the emergence of a thoughtless, blind and blinkered mindset which is counterproductive of their aim of enhancing the social (...) responsibility of the organization. We analyze three problems that might underlie the Paradox—namely the problem of deceptive measurements; the problem of responsibility erosion and the problem of blinkered culture. We apply the philosophical tradition of American Pragmatism to reflect on these issues in relation to different types of existing standards, and conclude by suggesting a number of considerations that could help both CSR standards developers and users to address the Paradox. (shrink)

Models of moral responsibility rely on foundational views about moral agency. Many scholars believe that only humans can be moral agents, and therefore business needs to create models that foster greater receptivity to others through ethical dialog. This view leads to a difficulty if no specific person is the sole causal agent for an act, or if something comes about through aggregated action in a corporate setting. An alternate approach suggests that corporations are moral agents sufficiently like humans to be (...) treated as persons, which leads to questions of intentionality and the organizational structure required to support the claim. In this article, I make an intermediate claim combining Goodpaster and Matthews' (60:132–141, 1982 ) view that a corporation may have a moral culture which affects subjective choices, with those of Painter-Morland (17(3):515–534, 2007 ) who points out that we should move from a model that posits discrete persons acting on each other to one where morality comes about through shared experience between agents who participate in each other’s lives. I argue that the discussion has been trapped in traditional dichotomies, and is better served by language that more accurately represents the dynamic interplay between organization and individual. I underwrite this claim by looking at recent changes in British and American legal approaches to corporate responsibility. These provide greater incentives for owners and business leaders to encourage employees to discuss the reflexive nature of legal and moral responsibility in business, facilitate workers to voice their moral concerns, and create structures and processes that allow those concerns to be heard. (shrink)

This study explores differences between executives in the U.S. and Spain in their perceptions of ethical issues in pricing, specifically comparing a domestic firm's actions affecting a foreign market versus a foreign firm's actions affecting the domestic market. Overall, Spanish and American executives provided somewhat different responses to the scenarios. Findings indicate that ethical judgments and intentions among Spanish executives did not vary based on which country was harmed. U.S. executives generally perceived that a morally questionable act directed at a (...) foreign country was more unethical than a morally questionable act directed at the United States. Possible explanations for these findings are suggested. (shrink)

This paper analyses the ethical performance of foreign-investment enterprises operating in China in comparison to that of the indigenous state-owned enterprises, collectives and private enterprises. It uses both the deontological approach and the utilitarian approach in conceptualization, and applies quantitative and econometric techniques to ethical evaluations of empirical evidences. It shows that according to various ethical performance indicators, foreign-investment enterprises have fared well in comparison with local firms. This paper also tries to unravel the effect of a difference in business (...) culture and competitive market forces on ethical performance by comparing the behavior of foreign-investment enterprises with that of the indigenous state-owned enterprises and collectives on the one hand, and with that of the indigenous private enterprises on the other. (shrink)