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)

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 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)

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)

Although case-based training is popular for ethics education, little is known about how specific case content influences training effectiveness. Therefore, the effects of (a) codes of ethical conduct and (b) forecasting content were investigated. Results revealed richer cases, including both codes and forecasting content, led to increased knowledge acquisition, greater sensemaking strategy use, and better decision ethicality. With richer cases, a specific pattern emerged. Specifically, content describing codes alone was more effective when combined with short-term forecasts, whereas content embedding codes (...) within context was more effective when combined with long-term forecasts, leading to greater knowledge acquisition and sensemaking strategy use. (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)

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)

Experimental design is one aspect of a scientific method. A well-designed, properly conducted experiment aims to control variables in order to isolate and manipulate causal effects and thereby maximize internal validity, support causal inferences, and guarantee reliable results. Traditionally employed in the natural sciences, experimental design has become an important part of research in the social and behavioral sciences. Experimental methods are also endorsed as the most reliable guides to policy effectiveness. Through a discussion of some of the central concepts (...) associated with experimental design, including controlled variation and randomization, this chapter will provide a summary of key ethical issues that tend to arise in experimental contexts. In addition, by exploring assumptions about the nature of causation and by analyzing features of causal relationships, systems, and inferences in social contexts, this chapter will summarize the ways in which experimental design can undermine the integrity of not only social and behavioral research but policies implemented on the basis of such research. (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)

As artificial intelligence (AI) deployment is growing exponentially, questions have been raised whether the developed AI ethics discourse is apt to address the currently pressing questions in the field. Building on critical theory, this article aims to expand the scope of AI ethics by arguing that in addition to ethical principles and design, the organizational dimension (i.e. the background assumptions and values influencing design processes) plays a pivotal role in the operationalization of ethics in AI development and deployment contexts. Through (...) the prism of critical theory, and the notions of underdetermination and technical code as developed by Feenberg in particular, the organizational dimension is related to two general challenges in operationalizing ethical principles in AI: (a) the challenge of ethical principles placing conflicting demands on an AI design that cannot be satisfied simultaneously, for which the term ‘inter-principle tension’ is coined, and (b) the challenge of translating an ethical principle to a technological form, constraint or demand, for which the term ‘intra-principle tension’ is coined. Rather than discussing principles, methods or metrics, the notion of technical code precipitates a discussion on the subsequent questions of value decisions, governance and procedural checks and balances. It is held that including and interrogating the organizational context in AI ethics approaches allows for a more in depth understanding of the current challenges concerning the formalization and implementation of ethical principles as well as of the ways in which these challenges could be met. (shrink)

This study examines employee perceptions on the effective adoption of artificial intelligence principles in their organizations. 49 interviews were conducted with employees of 24 organizations across 11 countries. Participants worked directly with AI across a range of positions, from junior data scientist to Chief Analytics Officer. The study found that there are eleven components that could impact the effective adoption of AI principles in organizations: communication, management support, training, an ethics office, a reporting mechanism, enforcement, measurement, accompanying technical processes, a (...) sufficient technical infrastructure, organizational structure, and an interdisciplinary approach. The components are discussed in the context of business code adoption theory. The findings offer a first step in understanding potential methods for the effective adoption of AI principles in organizations. (shrink)

While a corporate ethics program is expected to reduce employees’ unethical behavior, understanding the effects of the ethics program elements on reducing the unethical behavior is a crucial issue. This study aims to explore how a corporate ethics program with multiple control elements, including punishment, monitoring, internal reporting, code of ethics, ethics support service and ethics training, influence employees’ threat appraisal process, coping appraisal process and unethical behavior at workplaces. The data to verify proposed research hypotheses were collected by administering (...) questionnaire survey on four autonomous government organizations in Bangladesh. Research findings show that only punishment and monitoring have significantly negative relationships with unethical behavior. Monitoring and internal reporting have significantly positive relationships with threat appraisal. The code of ethics, ethics support service and ethics training are associated positively with coping appraisal. The mediation results reveal that coping appraisal mediates the relationship between ethics program elements and unethical behavior; but the mediation effects of threat appraisal are not significant. This study provides valuable insights into how a corporate ethics program with multiple control elements reduces employees’ unethical behavior as well as how employees’ threat and coping appraisal processes are related to the corporate ethics program and unethical behavior in organizations. (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)

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 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)

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)

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)

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)

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)

As a result of numerous, highly publicized, ethical breaches, firms and their agents are under ongoing scrutiny. In an attempt to improve both their image and their ethical performance, some firms have adopted ethical codes of conduct. Past research investigating the effects of ethical codes of conduct on behavior and ethical attitudes has yielded mixed results. In this study, we again take up the question of the effect of ethical codes on ethical attitudes and find strong evidence to suggest that (...) business professionals employed at firms with ethical codes of conduct are significantly less accepting of ethically questionable behavior toward most stakeholders. One notable exception relates to ethical actions toward customers. (shrink)

While previous literature provides evidence of the positive relationship between ethical climate and job satisfaction, the possible mechanisms of this relationship are still underexplored. This study aims to enhance scholars’ and practitioners’ understanding of the ethical climate–job satisfaction relationship by identifying and testing two of the possible mechanisms. More specifically, this study fills an existing research gap by examining social and interpersonal mechanisms, referred to in this study as workplace isolation of colleagues and salesperson’s teamwork, of the ethical climate–job satisfaction (...) relationship. This is vital for the selling profession because job satisfaction is known to drive higher levels of salespeople’s performance. The arguments for such mechanisms are built on the foundations of social/psychological contract theory and ethical climate literature. Empirical testing using a large sample of salespeople shows higher levels of ethical climate to decrease workplace isolation and increase teamwork. Findings support hypothesized model where ethical climate positively relates to job satisfaction as partially mediated by workplace isolation and teamwork. Ethical climate is negatively related to workplace isolation and positively to teamwork. Further, findings indicate negative effect of workplace isolation on teamwork and sales performance. Job satisfaction is found to be key factor in driving performance of salespeople. (shrink)

Unethical behavior is under-examined in the workplace. To date, few studies have attempted to explore the antecedents of an employee’s ethical decisions, particularly with respect to unethical behavior and its effects. To capture an employee’s psychological perception of unethical behavior in the workplace, this paper integrates organizational factors into the Theory of Reasoned Action. By conducting an empirical study in a Chinese firm, we found that codes of conduct and performance pressure have a significant influence on an employee’s attitude toward (...) and social beliefs about unethical behavior. We also demonstrated that employees’ unethical behaviors affect the firm performance of an entrepreneurial venture. The insights gleaned from the findings on this Chinese company have a number of important implications for both research and practice. (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)

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)

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)

Research in the field of management has increasingly focused on strategies and tools related to corporate sustainability. Of the tools examined, codes of ethics have been found to play a primary role. Many studies have investigated the content of such codes, as well as their capacity to condition the behaviour of people within organizations. However, few studies have considered the intrinsic quality of codes of ethics. This study aims to investigate the impact that specific factors—firm size, degree of internationalization and (...) industry effect—can have on the quality of codes of ethics. Based on a sample of 248 listed Italian companies, the results of the empirical analysis show that the quality standard is particularly high in larger companies and in those firms operating in industries in which relationships established with critical stakeholders—and disclosure to those stakeholders—play a crucial role. These results have interesting implications for both researchers and practitioners. (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)

Corporate codes of ethics, which have spread in the last decades, have shown a limited ability to foster ethical behaviors. For instance, they have been criticized for relying too much on formal compliance, rather than taking into account sufficiently agents and their moral development, or promoting self-reflexive behaviors. We aim here at showing that a code of ethics in fact has meaning and enables ethical progress when it is interpreted and appropriated with practical wisdom. We explore a model that represents (...) an uncommon organizational code of ethics: the monastic Rule of St. Benedict, written in the sixth century and still used today. Our empirical study—conducted in several monasteries living under this rule—shows that organization members interpret this rule, both hermeneutically and ethically, to adapt it to situations. They also appropriate this rule as a way of life and treat it as a dynamic framework that helps them to follow their purpose within their organization. This exceptional code actually offers an alternative model for practicing codes of ethics, in a virtue-ethical manner, beyond mere compliance with the text. The way in which reflexive and active agents practice the code, both individually and collectively, shapes their organizational experience and fosters their moral development. (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 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)

Business ethics is one of the most significant demands made by institutional and individual investors, who usually require the participation of the board of directors in the planning and implementation of ethical behaviour in corporations. This is done by drawing up an ethics code and then monitoring its fulfilment. This study has a dual objective: first, to analyse the role played by the composition of the board of directors, and by that we mean its independence and the diversity of its (...) members, on the implementation and scope of an EC, and, second, to detect whether the corporate governance system moderates the level of involvement of the board in ethical issues. The findings obtained from a data panel sample made up of 760 listed companies from 12 countries for the years 2003–2009 show that the largest companies with large-sized and diverse boards implement the most developed ECs. Nevertheless, the extent of involvement of the independent directors is conditioned by the level of shareholder orientation characteristic of the system of CG in the corporation’s country of origin. (shrink)

Software systems play an ever more important role in our lives and software engineers and their companies find themselves in a position where they are held responsible for ethical issues that may arise. In this paper, we try to disentangle ethical considerations that can be performed at the level of the software engineer from those that belong in the wider domain of business ethics. The handling of ethical problems that fall into the responsibility of the engineer has traditionally been addressed (...) by the publication of Codes of Ethics and Conduct. We argue that these Codes are barely able to provide normative orientation in software development. The main contribution of this paper is, thus, to analyze the normative features of Codes of Ethics in software engineering and to explicate how their value-based approach might prevent their usefulness from a normative perspective. Codes of Conduct cannot replace ethical deliberation because they do not and cannot offer guidance because of their underdetermined nature. This lack of orientation, we argue, triggers reactive behavior such as “cherry-picking,” “risk of indifference,” “ex-post orientation,” and the “desire to rely on gut feeling.” In the light of this, we propose to implement ethical deliberation within software development teams as a way out. (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)

Despite the ever increasing collaboration between industry and universities, the previous empirical studies on research integrity and misconduct excluded participants of biomedical industry. Hence, there is a lack of empirical data on how research managers and biomedical researchers active in industry perceive the issues of research integrity and misconduct, and whether or not their perspectives differ from those of researchers and research managers active in universities. If various standards concerning research integrity and misconduct are upheld between industry and universities, this (...) might undermine research collaborations. Therefore we performed a qualitative study by conducting 22 semi-structured interviews in order to investigate and compare the perspectives and attitudes concerning the issues of research integrity and misconduct of research managers and biomedical researchers active in industry and universities. Our study showed clear discrepancies between both groups. Diverse strategies in order to manage research misconduct and to stimulate research integrity were observed. Different definitions of research misconduct were given, indicating that similar actions are judged heterogeneously. There were also differences at an individual level, whether the interviewees were active in industry or universities. Overall, the management of research integrity proves to be a difficult exercise, due to many diverse perspectives on several essential elements connected to research integrity and misconduct. A management policy that is not in line with the vision of the biomedical researchers and research managers is at risk of being inefficient. (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)

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)

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)

We examined cynicism as a mediator of the influence of managers’ mission-congruent communication and behavior about ethical standards (a form of supervisory behavioral integrity) on employee attitudes and intended behavior. Results indicated that cynicism partially mediates the relationship between supervisory behavioral integrity and organizational commitment, but not the relationship between supervisory behavioral integrity and intent to comply with organizational expectations for employee conduct.

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)

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)

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)

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)

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)

Sports organizations face various ethical challenges. To tackle these, ethical codes are becoming increasingly popular instruments. However, a lot of questions remain concerning their effectiveness. There is a particular lack of knowledge when it comes to their form and content, and on the influence of these features on the effectiveness of these codes of ethics. Therefore, we developed a framework to analyze ethical codes and used this to assess codes of ethics in sports clubs from six disciplines. The form and (...) content characteristics of the codes were tested for their impact on the ethical climate of sports clubs. Our results show that most codes focus on the themes of integrity, and on solidarity among the members of sports clubs. Deontological phrasing is dominant in ethical codes in sports clubs. The occurrence of comprehension aids, such as examples, and procedural content, such as the mentioning of sanctions, is low. When it comes to code effectiveness, i.e., the influence on the ethical climate, we see a positive significant effect of the use of consequentialist oriented statements, and of the combination of regulatory and inspirational phrasing. Also the presence of explicit guidelines for the members of the board had a positive significant affect. This shows that codes should be a source of inspiration and stimulate moral awareness, rather than merely guide behavior by simple rules. Other content elements do not influence code effectiveness, suggesting that ethical codes merely have a function of raising ethical awareness in sports clubs. These results help to shed light on what it takes for a code of ethics to become a useful and effective instrument to tackle unethical behavior in sports clubs. (shrink)

Most scholarly interest in codes of ethics or conduct has focused on traditional companies. Little is known about the codes of social enterprises or hybrid organizations such as microfinance institutions. Our paper provides a comparative case study of the codes of a Mexican microfinance network and seven MFIs. Using the corporate integrity model, we analyze the content of MFIs’ codes compared to those of traditional organizations. We then examine to what extent some specific features of MFIs such as their mission, (...) target group, and applied credit methodologies, are factors that determine the content of their code. We find that MFIs’ codes, like those of traditional companies, include traditional stakeholder principles. Nevertheless, they put greater emphasis on ‘socially-oriented’ principles or on terms such as ‘people’ and ‘common good’. MFIs’ codes differ with respect to the items they include and exclude and the size of the covered sections. We also find that these codes attempt to address prevailing concerns in microfinance but rarely tackle two critical debates, namely levels of interest rates and of profitability. We finally argue that it is difficult to move toward a global code, owing to regional disparities and the variety of organizational models and missions. (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)

The selling environment is becoming more and more competitive and organizations are trying to gain edge over the other companies. Producing quality goods is not enough. In such a scenario, organizations are trying to make improvements in their salesforce which can be made by making them more ethical. Therefore, it becomes important for the organization to know the factors affecting salesforce ethical behavior. This paper makes an attempt in this regard and explores the organizational antecedents of salesforce ethical behavior. The (...) findings of the review reveal that there are various organizational factors which have an impact on salesforce ethical behavior such as compensation plan, quota, top management, code of ethics, salesforce control system, ethical climate, and ethics training. Based on the findings, the implications and directions for future research are stated. (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)

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