In this paper, I will argue that it is a moral obligation for companies, firstly, to accept their moral responsibility with respect to non-discrimination, and secondly, to address the issue with a full-fledged programme, including but not limited to the countering of microsocial discrimination processes through specific policies. On the basis of a broad sketch of how some discrimination mechanisms are actually influencing decisions, that is, causing intended as well as unintended bias in Human Resources Management (HRM), I will argue (...) that the well known tools of legislation and ethical codes are necessary although insufficient to cope with the problem. However, based on empirical evidence, we know which set of measures is likely to diminish discrimination. Taking non-discrimination seriously implies complex and longitudinal policies which include assigning responsibility for a non-discrimination policy within the firm, making managers conscious of implicit stereotypes and helping them to cope with prejudices that no one can totally overcome. Insofar as corporate responsibility with respect to non-discrimination is accepted and strategies that are not prohibitively expensive are known, companies are bound to implement them. Not implementing the best set of measures may be considered at least as a moral shortcoming or, depending on the size of the company, mere lip service to the non-discrimination principle. Although the paper refers to empirical material of diverse backgrounds, its intent is clearly normative. It wishes to spell out what companies ought to do if they are committed to responsible behaviour. The discussion of effective remedies against discrimination is based on a case study of a French company. The retailer Auchan was recently surprised to learn that it was discriminating against ethnic minorities despite strong ethical standards, an ethics committee and ethical leadership. The company dropped its naïve beliefs and set up an ambitious policy cope with the issue. The case illustrates what recent empirical research has revealed about the effectiveness of diversity policies: establishing responsibility for diversity results, firm ethical commitment and support from top management make diversity programs effective. (shrink)

As football clubs are facing different ethical challenges, many clubs are turning to ethical codes to counteract unethical behaviour. However, both in- and outside the sport field, uncertainty remains about the effectiveness of these ethical codes. For the first time, a longitudinal study design was adopted to evaluate code effectiveness. Specifically, a sample of non-professional football clubs formed the subject of our inquiry. Ethical code effectiveness was assessed by the measurement of the ethical climate. A repeated-measurements ANOVA revealed a positive (...) evolution of the ethical climate within the studied football clubs. This evolution could not be ascribed to the mere presence of an ethical code. However, several potential code effectiveness determining characteristics were also included in the research design. Some of these accounted partly for the evolution of the ethical climate of the football clubs. Results suggest that football clubs should incorporate their ethical code into a broader ethical programme, with attention for professionalization initiatives, stakeholder management, ethical leadership, and whistle-blowing protection. (shrink)

Multinational corporations dominate the global business arena, but new expectations for MNC boards call to question how they might effectively manage global stakeholder relationships in this new era of accountability. Uniting political behavior theory, which describes a board’s international political orientation, and global operating governance systems outlining a set of board behaviors, we develop a typology of four types of boards. We then provide recommendations for the development of an integrative governance structure, taking into account the mechanisms, structure, endorsements, and (...) codes of conduct that MNCs can use to promote ethical behavior across MNC horizons. (shrink)

Prior studies have provided explanations for the presence, use and dissemination of codes of corporate ethics or codes of corporate conduct of business corporations. Most such explanations are functional in nature, and are descriptive as they are derived from the codes and their associated documents. We search for more underlying explanations using two complementary theories: first, social contract theories explaining the exogenous and endogenous reasons of organizational behavior, and then institutional theory explaining why organizations take similar measures in response to (...) institutional pressures. Based on our explanations, we contend that the codes and their use and dissemination are arising from underlying social and institutional pressures for firms to continuously validate their existence in the face of increasing changes and recurrent uncertainties. (shrink)

This study examines the role of codes of ethics in reducing the extent to which managers act opportunistically in reporting earnings. Corporate codes of ethics, by clarifying the boundaries of ethical corporate behaviors and making relevant social norms more salient, have the potential to deter managers from engaging in opportunistic financial reporting practices. In a sample of international companies, we find that the quality of corporate codes of ethics is associated with higher earnings quality, i.e., lower discretionary accruals. Our results (...) are confirmed for a subsample of firms more likely to be engaging in opportunistic reporting behavior, i.e., firms that just meet or beat analysts’ forecasts. Further, codes of ethics play a greater role in reducing earnings management for firms in countries with weaker investor protection mechanisms. Our results suggest that corporate codes of ethics can be a viable alternative to country-level investor protection mechanisms in curbing aggressive reporting behaviors. (shrink)

Although theory refers to organizational culture as an important variable in corrupt organizations, only little empirical research has addressed the characteristics of a corrupt organizational culture. Besides some characteristics that go hand in hand with unethical behavior and other features of corrupt organizations, we are still not able to describe a corrupt organizational culture in terms of its underlying assumptions, values, and norms. With a qualitative approach, we studied similarities of organizational culture across different corrupt organizations. In this study, we (...) performed content analysis on interviews of 14 independent experts about their experience with corrupt organizations. With this approach, we gained insights about different corrupt organizations spanning different branches (e.g., government, foreign trade, pharmacy, sports, building industry). We found that corrupt organizations perceive themselves to fight in a war, which leads to their taken-for-granted assumption that “the end justifies the means”. This assumption inspires many values and norms of the organizational culture. An important value in a corrupt organization is “security”, and an important norm is punishment of deviant (i.e., non-corrupt) behavior. Furthermore, managers and employees differ in their perception of organizational culture. While the management endorses values, such as success, results, and performance, and implements these values in their norms of goal setting, employees make use of rationalization strategies and endorse values of security and team spirit. (shrink)

This paper develops an inventory and conceptual map of espoused organizational values. We suggest that espoused values are fundamentally different to other value forms as they are collective value statements that need to coexist as a basis for organizational activity and performance. The inventory is built from an analysis of 3112 value items espoused by 554 organizations in the UK and USA in both profit and not-for-profit sectors. We distil these value items into 85 espoused value labels, and these are (...) assessed in terms of their similarity and difference through judgements made by 53 experienced individuals. The resulting conceptual map facilitates the evaluation of values which are espoused at the organizational level, as opposed to aggregations of personal values, an important distinction that is often ignored in the literature. This analysis identifies a number of distinct areas of emphasis occupied by espoused values. In particular, the richness of value labels that relates to broader ethical issues may be aimed at external stakeholder management, but also may have an increasing influence on organizational behaviour as they are embedded into organizational practices. By advancing our understanding of espoused values, through an analysis of those being used in practice, we provide a means by which future research into organizational values and ethical issues can progress. (shrink)

Due to the prevalent influence of legal trends in driving ethical homogenization and persistent decoupling between ethical substance and symbolism in today’s organizations, scholars are calling for a renewed interest in the structural makeup of ethical codes. This article explores the disclosure trends and examines the contents of codes of ethics in the context of Canadian publicly listed acquirers. Relying on the analysis of codes’ public availability, structure, purpose, and promoted values, four clusters of behavior are identified. Although many firms (...) avoid the public disclosure of their codes, the results indicate that code of ethics’ patterns in sample firms are not driven merely by regulatory forces but increasingly shaped by aspirations for building a sustainable values-based corporation. The reported differences across clusters demonstrate that many companies in Canada overcome isomorphic pressures by displaying some originality in the writing of their codes. While symbolism in codes of ethics’ design and adoption prevails in publicly listed acquiring firms, the study provides evidence of an emerging trend of substantial commitment to social responsibilities. (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.

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)

While deliberation has traditionally played a central role in philosophical and behavioral accounts of ethical decision-making, several recent studies challenge the value of deliberation. These studies find that deliberative thinking, such as considering divergent views or different perspectives, leads to less ethical decisions. We observe, however, that these studies do not address normative deliberation, in which decision-makers consider or apply a normative standard. We predict that normative deliberation improves ethical decision-making. Across six experiments, we examine the effects of non-normative deliberation (...) and normative deliberation on ethical decision-making. We find that normative deliberation improves ethical decision-making and, in contrast to recent studies, no form of deliberation harms ethical decision-making. (shrink)

This article aims to argue in favour of two different kinds of responsibility: moral and organizational. I present the notion of moral responsibility and, specifically, moral accountability, which stands at the centre of the later discussion. I address Coleen Macnamara’s view of accountability, a model of enforcement involved in setting demands and sanctions. Then I account for some cases of morally impaired persons’ failure to respond adequately to moral demands, in contrast to their capacity to respond effectively to organizational demands. (...) I take the latter findings to show that there are two distinct kinds of accountability, moral and organizational. While moral accountability is connected to the arousal of emotions, I claim that organizational accountability is related to inner-organizational reactive procedures associated with employment benefits or sanctions. However, this can be distant from emotions. (shrink)

This research updates and significantly extends Akaah and Riordon’s (J Market Res 26:112–120, 1989 ) evaluation of ethical perceptions of marketing research misconduct among marketing research professionals. In addition to examining changes in perceptions toward key marketing research practices over time, we assess professionals’ judgments on the ethicality, importance, and occurrence of a variety of new marketing research ethics situations in both online and offline contexts. In a second study, we assess ethical judgments of the public at large using a (...) representative sample of US consumers—key stakeholders ignored in prior research on unethical marketing research practices. Generally speaking, disapproval of unethical research conduct has grown across the board in the last 20 years for both managers and marketing researchers. The same misconduct elicits a stronger disapproval in the online environment compared to the offline environment. Compared to marketing researchers, managers tend to think that unethical research conduct occurs more frequently. Those who conduct marketing research or use its findings (i.e., marketing researchers and managers) are less tolerant of unethical research conduct than the general public. (shrink)

Research on ethical norms has grown in recent years, but imprecise language has made it unclear when these norms prescribe “what ought to be” and when they merely describe behaviors or perceptions (“what is”). Studies of ethical norms, moreover, tend not to investigate whether participants were influenced by the prescriptive aspect of the norm; the studies primarily demonstrate, rather, that people will mimic the behaviors or perceptions of others, which provides evidence for the already well-substantiated social proof theory. In this (...) review article, we delineate three streams of norms research in business ethics: behavioral, perceptual, and prescriptive. We argue that by properly categorizing norms, and designing studies to investigate when prescriptions, more than mere mimicry, improve ethical outcomes in organizations, researchers can enhance managers’ efforts to promote ethical outcomes in organizations. (shrink)

This editorial offers new ways to ethically practice, evaluate, and use quantitative research. Our central claim is that ready-made formulas for QR, including ‘best practices’ and common notions of ‘validity’ or ‘objectivity,’ are often divorced from the ethical and practical implications of doing, evaluating, and using QR for specific purposes. To focus on these implications, we critique common theoretical foundations for QR and then recommend approaches to QR that are ‘built for purpose,’ by which we mean designed to ethically address (...) specific problems or situations on terms that are contextually relevant. For this, we propose a new tool for evaluating the quality of QR, which we call ‘relational validity.’ Studies, including their methods and results, are relationally valid when they ethically connect researchers’ purposes with the way that QR is oriented and the ways that it is done—including the concepts and units of analysis invoked, as well as what its ‘methods’ imply more generally. This new way of doing QR can provide the liberty required to address serious worldly problems on terms that are both practical and ethically informed in relation to the problems themselves rather than the confines of existing QR logics and practices. (shrink)

Studying compliance, in terms of the business responses to legal rules, is notoriously difficult. This paper focuses on the difficulty of capturing the behavioral response itself, rather than on difficulties in explaining compliance and isolating particular factors of influence on it. The paper argues that existing approaches to capture such compliance, using surveys and governmental data, run the risk of failing to capture compliance as it occurs in the reality of day-to-day business responses to the law. It does so by (...) means of a unique ethnographic approach to study compliance. Drawing from data of deep participant observation about responses to legal rules in two small businesses, the paper finds that in this context there is Compliance Dynamism. This means that compliance varies for different rules, it varies over time, and businesses learn from one response to the law to the next on a daily basis. Compliance is also situational, and there is an Indirect Observer Effect, where the way compliance is measured, especially when using data derived from inspections, shapes what compliance is observed and what is not. Therefore, compliance should be captured not as a singular state but as a string of reiterative processes that occur in their situational context. And this fundamentally challenges most existing methods to capture compliance and thus our understanding of what compliance occurs and what may shape it. In its conclusion, the paper draws out the implications this has for studies that seek to find simple and usable findings about compliance. (shrink)

This article understands codes of ethics as written documents that represent social actors in specific ways through the use of language. It presents an empirical study that investigated the codes of ethics of the German Dax30 companies. The study adopted a critical discourse analysis-approach in order to reveal how the code-texts produce a particular understanding of the various internal social groups for the readers. Language is regarded as social practice that functions at creating particular understandings of individuals and groups, how (...) they are interrelated, and how they should behave. Findings show that codes of ethics do not represent employees as a group that is empowered or morally enlightened; instead they are positioned as passive receivers of rules and regulations. Furthermore, codes of ethics classify employees as having a need to be monitored and controlled by the higher levels of the corporate hierarchy. Overall, code language enforces compliance through maintaining existing and building new asymmetries between the different groups within a company. As a consequence, the article discusses a somewhat different understanding of code effectiveness. Reproducing and reemphasizing hierarchical relations could also lead to code compliance, perhaps without any need for developing the moral employee that is committed to ethical values. (shrink)

This article argues that attempting to overcome moral silence in organizations will require management to move beyond a compliance-oriented organizational culture toward a culture based on integrity. Such cultural change is part of good corporate governance that aims to steer an organization to enhance creativity and moral excellence, and thus organizational value. Governance mechanisms can be either formal or informal. Formal codes and other internal formal regulations that emphasize compliance are necessary, although informal mechanisms that are based on relationship-building are (...) more likely to achieve moral excellence. Such a shift can be viewed as a transformative strategy for overcoming the destructive side effects and business risks of the tendency within corporate cultures to remain mute when faced with issues that violate personal or corporate values. Genuine dialogues and appropriate ethical decisionmaking training can deepen the understanding and create a mindful awareness (of ethical values) and induce trust that embrace both complying with rules and regulations, as well as inciting creative "ethical innovation" with respect to human interaction in multinational companies. (shrink)

Workplace incivility is a current challenge in organizations, including smaller firms, as is the development of programs that enhance employees’ treatment of coworkers and ethical decision making. Ethics programs in particular might attenuate tendencies toward interpersonal misconduct, which can harm ethical reasoning. Consequently, this study evaluated the relationships among the presence of ethics codes and employees’ locus of control, social aversion/malevolence, and ethical judgments of incivility using information secured from a sample of businesspersons employed in smaller organizations. Results indicated that (...) ethics code presence was associated with a more internal locus of control and stronger ethical judgment of workplace incivility. Social aversion/malevolence was negatively related to ethical judgment, and internal locus of control was positively related to ethical judgment. Smaller firms should develop ethics codes to manage individuals’ perceptions of control, thus encouraging enhanced ethical reasoning in situations that involve the mistreatment of coworkers; they should also monitor counterproductive tendencies that harm such reasoning and precipitate incivility. (shrink)

Particular concern about academic ethics in higher education and research institutions in Lithuania was addressed in 2009 by the national decision to establish an Office of Ombudsman for Academic Ethics and Procedures. The decision was taken during the approval of the revised Law on Higher Education and Research by the Parliament of Lithuania. Following two failed attempts to appoint an ombudsman, the Office began to function in 2014. Since then, the ombudsman, alongside other state institutions, has been empowered to implement (...) national higher education and research policy. At the outset of the Office activity it is important to consider how public HERIs institutionalise academic integrity, i.e. how they create an ethical environment within the academic community and what means are used to support it further. Collecting data from codes of ethics, regulations of academic integrity committees and interviews, data analysis shows that academic values manifest unevenly in teaching/learning and research. Most efforts concern the behaviour of students rather than the behaviour of academic staff. Moreover, ethics infrastructure gives a misleading image, as it lacks harmony and compatibility, despite the fact that there is a myriad of means to foster ethical behaviour. Universities should make greater effort to connect academic values with operations in teaching/learning and research. (shrink)

Globalization theories posit organizational convergence, suggesting that Codes of Ethics will become commonplace and include greater consideration of global issues. This study explores the degree to which the Codes of Ethics of 157 corporations on the Global 500 and/or Fortune 500 lists include the "third generation" of corporate social responsibility. Unlike first generation ethics, which focus on the legal context of corporate behavior, and second generation ethics, which locate responsibility to groups directly associated with the corporation, third generation ethics transcend (...) both the profit motive and the immediate corporate environment. Third generation ethics are grounded in responsibilities to the larger interconnected environment. The results of the study suggest convergence, insofar as Codes of Ethics are becoming standard communication features of corporations across region and industrial sector but still manifest a primary concern with profits and those behaviors which are mandated by law. Only corporations headquartered in the European Union demonstrate a significant degree of global consciousness and reflexivity. However, there is some evidence that third generation ethics and thinking are becoming part of the corporate landscape. More then three quarters of the corporations made at least some reference to third generation ethics. (shrink)

Codes of ethics are directly aimed at behavioral control, but they also affect a company’s ethical culture, which in turn concerns compliance and ethical behavior. To positively influence a company’s ethical culture, employees must be familiar with its code of ethics, perceive that top management is committed to the code, and believe that their peers also comply with the code. The evidence on whether a code’s design affects a company’s ethical culture is limited. This study’s factorial survey experiment contributes to (...) this gap in two ways: first, it investigates whether a code’s design affects how easily the code can be learned and, therefore, contributes to code familiarity. Second, it examines how a code can convey expectations regarding top management’s commitment and peers’ behavior, both of which are part of ethical culture. The results indicate that a positive tone increases code familiarity, and a code signed by top managers sends a strong signal of their commitment to the code. Finally, various implications of the results for research and practice are discussed. (shrink)

This paper re-frames business ethical codes as narrative processes by reflecting critically on key ontological assumptions underpinning the existing research, and introducing new and relevant concepts based on alternative assumptions. The first section draws on recent decision-making research to develop a theoretical account of BCEs as complex, socially embedded sensemaking processes. The second section addresses the content of codes, and differentiates between narrative and logico-scientific modes of reasoning. The third section focuses on the quality of code communication and identifies several (...) distinct types of narrative process. We provide research directions for how this new understanding of BCEs may be further developed, as well as implications for practitioners. In response to the call for new conceptual models, the paper provides organizational researchers with a more nuanced understanding of how BCEs enable or constrain ethical behavior in organizations. (shrink)

Poor working conditions remain a serious problem in supplier facilities in developing countries. While previous research has explored this from the developed buyers’ side, we examine this phenomenon from the perspective of developing countries’ suppliers and subcontractors. Utilizing qualitative data from a major knitwear exporting cluster in India and a stakeholder management lens, we develop a framework that shows how the assumptions of conventional, buyer-driven voluntary governance break down in the dilution of buyer power and in the web of factors (...) rooted in suppliers’ traditions, beliefs, local demands and resource dependency. We reveal out how success in governing collaborative global supply chains often falls short within the subcontracting stage, where a stakeholder management mindset is elusive to most participants. We suggest that success in governing collaborative global supply chains is dependent on concepts of stakeholder utility and the presence of shared value that is often at odds with the realities of power, information asymmetry and compliance/reward systems inherent in the non-market coordination of global supply chains. Our findings offer important insights for delineating the concepts of value creation from CSR concepts and practices, and for modifying the basic assumptions of conventional supply chain governance. (shrink)

In recent years, there has been increasing concern about unethical conduct within corporate business, not least because of the scandalous behavior of former chief executives at top blue chip companies such as Enron, Worldcom, Parmalat, and Volkswagen. These scandals have not only threatened the privileged position of senior corporate employees but also the solvency of the companies they manage and lead. The high profile cases of corporate crime and corruption that occurred in the early 2000s together with the 2008 Wall (...) Street bailouts and the growth in criminal prosecutions since have raised the profile of business ethics to an unprecedented level. Greater public sensitivity toward and awareness about the unlawful and immoral conduct of firms in the United States and elsewhere, has created demand for organizations to become more accountable and socially responsible and prompted greater regulatory scrutiny. It has also served to highlight the embryonic and delimited state of research and scholarship on business ethics, where the focus has tended to remain on leadership. A neglected, though important, line of ethical enquiry concerns followership. Corporate wrongdoing would be less formidable and extensive if it was not aided and abetted. Two key questions arise. First, what prompts followers to support rather than oppose bad leaders? Second, what can be done to stem or at least curtail their allegiance to bad leaders? (shrink)

Recent figures reported by KPMG confirm the growing prevalence of corporate codes of ethics globally. Svensson et al. (Bus Ethics 18:389–407, 2009 ) in surveys of the largest corporations in Australia, Canada, and Sweden found a similar trend. The increased prevalence of corporate codes of ethics has been accompanied by heightened research interest in various aspects of these documents, e.g., the contents and focus of the codes. However, there is a paucity of research examining the effectiveness of these documents and (...) the organizational infrastructure that accompany them. This study, based on a survey of Canada’s largest corporations, sought to empirically assess the determinants of the effectiveness of corporate codes of ethics by regressing managers’ perceptions of code effectiveness against various elements of ethics programs. It was found that, in a statistically significant model, eighteen independent variables explain 58.5% of the variance in the perceived effectiveness of corporate codes of ethics. (shrink)

Accounting professionals play an important role in the generation and auditing of financial statements and, given their understanding of business processes, may be relied upon in the development of organizations’ ethical infrastructures (i.e., the formal aspects of an organization’s ethical environment that are explicitly under the control of the organization). Thus, understanding and improving the work environments of accounting professionals is crucial to improving organizational ethical culture and reducing fraud. In this study, we extend prior research that documents the prevalence (...) of ethical infrastructure programs by assessing how accounting professionals, a key employee group, perceive their organizations’ ethical infrastructures. In addition, we examine whether perceptions of the effectiveness of the ethical infrastructure and professional autonomy influence accountants’ ethical judgments. Based on the responses of 378 CPAs in the United States, we find the perceived state of the ethical infrastructure across accounting work environments—both public accounting firms and other organization types—is relatively strong. However, of the five ethical infrastructure components we examine (i.e., ethics code, ethics training, ethics-based punishments and incentives, ethics reporting system, and ethics review system), only 35% of respondents indicate that their organizations have more than three of these components. Importantly, we find that perceived ethical infrastructure effectiveness and professional autonomy influence both perceptions of the ethical culture and the ethical judgments of accounting professionals. We also contribute to practice by highlighting opportunities for improvement in ethics training formats, ethics-based incentives, and ethics review systems. (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)

This article answers several calls—coming as well from corporate governance practitioners as from corporate governance researchers—concerning the possibility of complying simultaneously with requirements of innovation and ethics. Revealing the long-term orientation as the variable which permits us to link the principal goal of organization, being “survival,” with innovation and ethic, the article devises a framework for incorporating ethics into a company’s processes and strategies for innovation. With the principal goal of organizations being “survival” in the long-term, it is assumed that (...) innovation is necessary in order to realize a going concern. Firms that do not innovate and adapt to rapidly changing business environments are less likely to be sustainable. Thus, it is in a business’ best interests to adopt an innovation process for long-term success. We posit that there are two simultaneous sources of innovation and change that are unavoidable and embedded in the corporate landscape. First, we argue for genetically embedded, Darwinian explanations for adaptations that enable an entity’s survival. This view is combined with more conventional, social science explanations for change. Our new, comprehensive model of the governance of innovation processes hinges on the one hand on an organization’s long-term orientation, which we argue, is not possible without a consideration of an ethical dimension. On the other hand, the model employs, for the first time, the concept of duality, in order to make the positive coexistence of innovation and ethic analytically visible. Guided by this concept the roots of the ethic within innovation are traced from both natural science forces for change, and cultural pressures operating on members of an organization. We present our Integrated Causal Model of Innovation and propose theoretical relationships that will generate numerous avenues for future research in the field, and help managers to reorient their governance strategies. (shrink)

This article answers several calls—coming as well from corporate governance practitioners as from corporate governance researchers—concerning the possibility of complying simultaneously with requirements of innovation and ethics. Revealing the long-term orientation as the variable which permits us to link the principal goal of organization, being “survival,” with innovation and ethic, the article devises a framework for incorporating ethics into a company’s processes and strategies for innovation. With the principal goal of organizations being “survival” in the long-term, it is assumed that (...) innovation is necessary in order to realize a going concern. Firms that do not innovate and adapt to rapidly changing business environments are less likely to be sustainable. Thus, it is in a business’ best interests to adopt an innovation process for long-term success. We posit that there are two simultaneous sources of innovation and change that are unavoidable and embedded in the corporate landscape. First, we argue for genetically embedded, Darwinian explanations for adaptations that enable an entity’s survival. This view is combined with more conventional, social science explanations for change. Our new, comprehensive model of the governance of innovation processes hinges on the one hand on an organization’s long-term orientation, which we argue, is not possible without a consideration of an ethical dimension. On the other hand, the model employs, for the first time, the concept of duality, in order to make the positive coexistence of innovation and ethic analytically visible. Guided by this concept the roots of the ethic within innovation are traced from both natural science forces for change, and cultural pressures operating on members of an organization. We present our Integrated Causal Model of Innovation and propose theoretical relationships that will generate numerous avenues for future research in the field, and help managers to reorient their governance strategies. (shrink)

I study the diffusion of codes of conduct in the German textile and apparel industry between 1997 and 2010. Using a longitudinal case study design, I aim to understand how the diffusion of this practice was affected by the way important “infomediaries”—a trade journal and a professional association—shaped its understanding within the industry. My results show that time-consuming processes of meaning reconstruction by these infomediaries temporarily hampered but finally facilitated the broader material diffusion of codes of conduct within the industry. (...) These findings detail existing conceptualizations of code diffusion as they demonstrate how infomediaries—through creation, use, and reconstruction of explanatory accounts as well as frames of reference—participate in defining the relevance and meaning of CSR practices. I move beyond prior empirical work as I explicitly assess not only processes of meaning construction evolving around a CSR practice but also how these processes over time coincide with quantitative patterns of its material diffusion. Implications of my findings for existing research on the diffusion of codes of conduct specifically and CSR practices in general as well as for conceptualizations of diffusion from institutional theory are discussed. (shrink)

Three ethics program components, a code of ethics, ethics training initiatives and ethics-oriented performance appraisal content, were examined for their relationship to ethical intent using a sample of 525 employees from the Spanish financial services industry. As expected, all three components contributed to the prediction of ethical intent. Importantly, clusters of employees who reported experiencing distinct combinations of the program components were identified and compared for their level of ethical intent. Employees who perceived all three components to be strongly implemented (...) reported significantly higher levels of ethical intent relative to those who viewed the components as either all weakly implemented or not present. Combinations including training initiatives plus one other element had a similar impact to the fully implemented approach. Contrary to expectations, ethics-oriented performance appraisal content did not relate more strongly to ethical intent than codes of ethics. (shrink)

Ethicalisation processes that partake in the construction of a firm or a professional group’s ethical identity are often described as a relatively linear combination of several components, such as policies (starting with the development of a code of ethics), corporate practices, and leadership. Our study of a professional community dealing with the topics related to cultural diversity indicates a more reciprocal relationship between ethical identity and ethicalisation processes. We argue that a tangible form of ethical identity can pre-date the ethicalisation (...) process of a professional group, and additionally, can impact this process at the start. We highlight that, despite the absence of official ethical statements in the community, a form of ethical professional identity is already present among the interculturalists of the international organisation Society for Intercultural Education Training and Research. Using critical discourse analysis, we identify the proclaimed humanist ethos in the discourses that interculturalists co-produce and diffuse during conferences, on on-line discussion forums, and in the mission of their professional organisations. This study contributes to the literature on ethical identity development by showing how a pre-existing form of ethical identity can influence the early stage of the development of a code of ethics. In addition, we indicate that, similar to organisational identity construction, ethical identity construction uses self-other identity talks, thus, defining an ethical other (or less ethical other) in its development. (shrink)

As a result of recent corporate scandals, several rules have focused on the role played by Boards of Directors on the planning and monitoring of corporate codes of ethics. In theory, outside directors are in a better position than insiders to protect and further the interests of all stakeholders because of their experience and their sense of moral and legal obligations. Female directors also tend to be more sensitive to ethics according to several past studies which explain this affirmation by (...) early gender socialization, the fact that women are thought to place a greater emphasis on harmonious relations and the fact that men and women use different ethical frameworks in their judgments. The goal of this paper is to determine the influence of these characteristics of the Board in terms of promoting and hindering the creation of a code of ethics. Our findings show that a greater number of female directors does not necessarily lead to more ethical companies. Moreover, within Europe as a continent, board ownership leads to an entrenchment of upper-level management, generating a divergence between the ethical interests of owners and managers. In light of this situation, the presence of independent directors is necessary to reduce such conflicts. (shrink)

This study examines the relationship between cognitive moral development (CMD), productivity features of information technology (IT) and unethical behavior or misconduct. Using an experimental design that randomly assigns subjects to one of four unique technology conditions, we assess the relationship between a subjects' predominant level of CMD and ethical misconduct on IT-oriented work tasks. Our results show that both higher levels of CMD and increased levels of IT productivity features at one's disposal have a significant role to play in explaining (...) observed behavior in our sample. We find that CMD as measured by the Defining Issues Test's P-score is negatively related to task misconduct. Conversely, IT productivity features such as copy-and-paste are positively related to task misconduct. In addition, the CMD—misconduct relationship is significantly diminished by the introduction of IT productivity features. Lastly, a series of hazard analyses are conducted to explore the boundaries of our principal findings. These results demonstrate the significant role of technology in enabling negative behavior and the relative inability of subjects' use of principled moral reasoning to overcome it. Implications of these findings for academics and business managers are offered, as well as recommendations for mitigating misconduct in both academic and workplace environments. (shrink)

This paper investigates different modes of organizing for corporate social responsibility (CSR). Based on insights from organization theory, we theorize two ways to organize for CSR. “Complete” organization for CSR happens within businesses and depends on the availability of certain organizational elements (e.g., membership, hierarchy, rules, monitoring, and sanctioning). By contrast, “partial” organization for CSR happens when organizers do not have direct access to all these organizational elements. We discuss partial organization for CSR by analyzing how standards and cross-sector partnerships (...) make selective use of organizational elements. We maintain that an important feature of the increasing institutionalization of CSR—not only within businesses but also among non-governmental, governmental, and professional actors—is the rise of partial forms of organization. We discuss the contributions to this Special Issue in the context of our theorization of complete/partial organization for CSR and outline avenues for further research. (shrink)

The literature states that both situational and individual factors contribute to corrupt behavior. This study investigates the influence of rarely empirically investigated situational factors - the size of the bribe, time pressure, and the degree of abstractness of the business code - on the Model of Corrupt Action that describes the subjective decision making process of corrupt actors. To test the effects, I used an experimental simulation design. Only few effects were found. Thus, my results show a certain robustness of (...) corrupt behavior against the examined situational influences. Based on these results, I discuss implications for the prevention of corruption in organizations. (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)

In contrast to the recent rise to economic importance of offshore finance centres (OFCs), the topic of taxation has so far created little interest among scholars of corporate social responsibility (CSR). This paper makes two contributions to addressing this lacuna. Applying a range of influential normative theories of ethics, it first offers an ethical evaluation of tax havens. Second, the paper examines what use large firms that are headquartered in two OFCs—Bermuda and the Cayman Islands—make of formal CSR tools. The (...) emerging duplicity in tax havenbased companies professing social responsibility highlights once more the political nature of CSR, where at least some firms and/or industries can successfully limit government power to enact regulation as well as shape the discourse around CSR. The study of CSR in OFC-based firms thus calls into question the usefulness of the often quoted definition of CSR as going beyond the law. (shrink)

Codes of conduct have become the perhaps most often used tool to manage corporate social responsibility (CSR). Researchers have primarily analysed such documents at company-wide or trans-company levels, whereas there is a dearth of studies into the use of codes for particular corporate functions. Hence, this article will examine one particular group of sub-company level codes, namely codes of conduct that stipulate CSR criteria for suppliers. Examining such ethical sourcing policies adopted by the FTSE100 corporations, the article draws out what (...) environmental, social and economic issues large corporations perceive to be important in the management of their supply chains. At an aggregate level, the coverage of CSR issues is rather extensive, yet at the level of the individual corporation a degree of selectivity in the issues that are addressed becomes noticeable. The code content analysis furthermore confirms the business case and public pressure to be the most important drivers of CSR. Finally, the study highlights the role of isomorphic processes in the adoption of CSR tools. (shrink)

Codes of conduct have proliferated not only at company level, but also at supra-and suborganisational levels. However, the latter have remained an under-researched area within the CSR literature. Hence, this article examined what range of organisational and sub-organisational codes large companies - here the FTSE100 constituent companies -have developed. The article isolated seven different types of organisational and sub-organisational codes, which together with six supraorganisational ones form a lattice-work of intermeshing documents. Such a division of labour between types of codes (...) has two significant implications for CSR practice and research. In terms of corporate practice, an analysis of the content of the organisational and sub-organisational codes indicates that companies seem to enter into generalised commitments in the more visible documents, whereas other aspects, in particular more coercive aspects of CSR, get buried in the lower levels of the code hierarchy. In terms of research methodology, the differentiation between codes highlights that an analysis of codes of conduct alone is insufficient to establish what the CSR approach of a company is. Rather, it is the entire range of codes at organisational and sub-organisational levels that scholars of codes of conduct should be concerned with. (shrink)

This study examined the influence of two organizational context variables, codes of conduct and supervisor advice, on personnel decisions in an experimental simulation. Specifically, we studied personnel evaluations and decisions in a situation where codes of conduct conflict with supervisor advice. Past studies showed that supervisors’ advice to prefer ingroup over outgroup candidates leads to discriminatory personnel selection decisions. We extended this line of research by studying how codes of conduct and code enforcement may reduce this form of discrimination. Eighty (...) German managers evaluated and selected candidates from an applicant pool including Germans (ingroup members) and foreigners (outgroup members). Supervisor advice to prefer ingroup members lowered suitability ratings of outgroup members as well as their chances to be selected for an interview. Ethical codes of conduct referring to equal opportunities limited this form of discrimination, but only when codes were enforced by sanctions and integrated into organizational every-day practice. The implications of these findings for research and practice are discussed. (shrink)

BackgroundThe Catalan Institute of Health is the largest health services public provider in Catalonia. “CIH Code of Ethics Virtual Forum”, was created within the Intranet of the CIH to facilitate participation among their employees. The current study aims to: a) Analyse the CIH workers’ assessment of their own, their colleagues’ and the organization’s observance of ethical values; b) Identify the opinions, attitudes, experiences and practices related to the ethical values from the discourse of the workers that contributed voluntarily to the (...) CEVF.MethodsMixed methods study with convergent parallel design:1.Cross sectional study by means of a self-administered, ad hoc, anonymous questionnaire to assess the observance of the ethical values of the CIH according to the participants. A total of 712 workers responded to the questionnaire. A descriptive, bivariate analysis of the results was carried out. 2.Qualitative study to determine the meaning for the workers of the ethical values put forward by the organization. Their individual opinions and experiences were explored by means of a thematic contents analysis of 225 comments posted in the CEVF. The study was conducted between May and December 2008.ResultsThe average score for observance of the CE by the respondents themselves was high, between 3.5-4/5 for the observance by their colleagues and close to 3/5 for the CIH management. These results do not change when we compare by gender, age group and professional discipline. The comments on the values are information-rich, they mirror the ethical environment of the institution and show various ethical dilemmas and suggestions.ConclusionsResults show that it is feasible for a publicly funded health care organization to develop a CE with the participation of employees and the support of the management. Results underscore the relevance of this strategy for the implementation, improvement and update of the CE as a responsibility shared by all workers. Practices consistent with ethical values are rewarded by social approval, enhance employee’s confidence and coherence in decision-making and improve public engagement and institutional policies. (shrink)

Theorists have long argued that a process of individualisation is inherent in conditions of late modernity. Whilst individualisation has been acknowledged in the business ethics literature, studies have often overlooked the processes by which individuals are given greater responsibility for ethical decision making and the personal and institutional effects of this responsibility. This article develops a notion of ‘ethical individualisation’ to help one understand and explore how and why ethical responsibility is being devolved to employees in the UK consulting industry. (...) The article argues that an individualised ethics is incapable of preventing malpractice in the face of institutional conflicts of interest. (shrink)

Studies have shown ethics education has not systematically improved the moral reasoning of business students and professionals and, therefore, its effectiveness should be seen as deeply questionable. Business ethics education has limited effect, in part, because it rests on rationalistic traditions within normative ethics, business theory, and cognitive psychology. Emphasis is usually placed on student’s rationally thinking about issues as a way of improving their critical analysis and reasoning skills. Yet by focusing primarily on its cognitive dimension, ethics education has (...) tended to underdetermine the importance of social interaction in moral development. As an alternative to traditional business ethics education, using the work of the Russian psychologist Lev Vygotsky, I argue, that peer influence through a dialogical process is a better way to enhance and improve the moral reasoning and judgement of individuals. More specifically, small-group dialogue with peers encourages deep reflection about business dilemmas and has a direct influence on how one thinks about ethics. (shrink)

Research about codes of corporate ethics has hitherto taken a hypothetical, correct meaning of codes for granted. The article problematises the dichotomous categories intrinsic and subjective meanings of codes. I address the question if professionals in finance accept codes of business. The particular mentality of stockbrokers and traders constructs the way they judge restrictions such as company codes of ethics. While neglecting dimensions of ethics beyond known rules, brokers and traders distrust good ethics as a possible end in itself. Many (...) professionals in the financial market perceive efforts to integrate ethical reasoning in work as only means for maximising business opportunities. (shrink)

Research about codes of corporate ethics has hitherto taken a hypothetical, correct meaning of codes for granted. The article problematises the dichotomous categories intrinsic and subjective meanings of codes. I address the question if professionals in finance accept codes of business. The particular mentality of stockbrokers and traders constructs the way they judge restrictions such as company codes of ethics. While neglecting dimensions of ethics beyond known rules, brokers and traders distrust good ethics as a possible end in itself. Many (...) professionals in the financial market perceive efforts to integrate ethical reasoning in work as only means for maximising business opportunities. (shrink)

The proposed adoption of International Financial Reporting Standards (IFRS) in the United States has ignited a debate as to whether the principles‐based nature of these standards better serves the interests of investors. While it is argued that these principled‐based standards will encourage more transparent financial reporting than the current rules‐based U.S. standards, critics argue that IFRS will invite more aggressive financial reporting through the liberal exercising of professional judgment. This empirical study aims to understand what individual and organizational factors may (...) affect aggressiveness when making accounting judgments. In particular, we examine the influence that prior ethics training, codes of ethics and an individual's predominant moral reasoning schema have on adherence to company policy in an accounting‐related (depreciation) judgment. Results of the study show that respondents with prior ethics training are more likely to adhere to company accounting policy than those who have not had formal ethics education. Respondents presented with a company ethics code also were less aggressive in their accounting judgments than those who were not presented with a code prior to reading the scenario. Finally, decision aggressiveness was moderated by individuals who used conventional moral reasoning schemas. (shrink)

This paper documents the development and implementation of an ethically valid code of ethics in a newly formed national professional organization. It describes the experience and challenges faced by the National Association of Senior Move Managers (NASMM) and its leaders as they worked to establish ethics as an organizing framework early in its evolution. Designed by the investigators and supported by the NASMM Board, the process took place over a 2 year period and more than 130 people participated. It provides (...) a model for code development that is both practical and grounded in theory. Although the content of a code of ethics (the "product") provides guidance to organizational members in the conduct of everyday business, especially when they face ethically challenging situations, how the code is developed (the "process") influences its ethical validity. Few published cases document an organization's experience developing a code, and this is the first case, to our knowledge, that provides a first-hand longitudinal account of an effective code development process. (shrink)