After a brief review of the ethical judgment research, the Potter Box, a four‐step ethical judgment tool used primarily in media ethics, is introduced. The paper proposes that the Potter Box's usefulness for evaluating ethical dilemmas could be improved by re‐sequencing the steps, by incorporating philosophical intuitionism as a mechanism for structuring its inherent pluralism and by adding a post‐decision, pre‐action reflective step. The resulting modified Potter Box has five steps – analyze the situation, identify stakeholders, specify duties, weigh obligations (...) and check for universalizability – and should provide a useful structure for analyzing difficult ethical dilemmas and for creating transparency in the judgment process that accommodates improved discussion. (shrink)

It is believed that the atmosphere in which employees carry out their responsibilities influences whether employees will behave ethically. An important factor contributing to the integrity of the financial reporting process is the tone set by senior management (i.e., the corporate environment). This study was conducted to describe financial accountants'' perceptions of management''s ethical standards. These perceptions are based on both management''s actions and management''s expectations of the employee. This researcher also attempted to identify demographic variables that are related to (...) these perceptions. The results are based on a survey mailed to 400 CPAs who prepare financial reports. Accountants generally perceive management''s conduct as ethical and believe that management expects them to behave ethically. Of particular interest is that respondents have more positive attitudes about management''s expectations of them than they do about management''s own actions in terms of ethical behavior. The majority of respondents reported at least some pressure to achieve short-term performance targets. Management level, industry, size of an organization, and gender were all found to be related to employee perceptions. (shrink)

Attempting to determine solutions for unethical practices in the field, this research was designed to assess the effectiveness of public relations firms’ ethics statements in decreasing the incidence of malpractice. This study revealed an encouraging finding that practitioners working in firms with ethical parameters were significantly more likely to engage in ethical practices. Moreover, educating public relations practitioners about the content of ethics statement could positively influence their ethical practices. At the same time, this study’s findings suggest further questions for (...) consideration in future scholarship and in the application of ethics statements to practice within the field. (shrink)

Social desirability bias (SDB) is one of the main concerns in self-reported studies that measures explicit attitudes such as ethics research. Although SDB was introduced since the early 1950s, little effort has been made to understand the necessity of including an SDB scale in studies of sensitive topics such as ethics. The purpose of this paper was to (1) identify whether current ethics-related studies considered SDB when conducting their research and (2) ascertain whether SDB was a significant variable in such (...) studies. This investigation takes the form of a systematic review of articles published within the last 20 years in well-known business ethics journals (2000–2019). We found that (a) only 13.67% of ethics research measured SDB; (b) although the majority of the reviewed articles were from the West, researchers in Asia have also made significant progress in recent years in measuring SDB in their studies; (c) SDB was used mainly as a control variable and as such researchers preferred scales with fewer items; and (d) SDB was unavoidable even when using online surveys. Based on our findings, we attempt to provide an overview of SDB in ethics research and encourage ethics researchers who adopt self-reported surveys to include an SDB measurement in their studies to control SDB. (shrink)

This review summarizes and critiques the empirical ethical decision-making literature from 1996–2003. One hundred and seventy-four articles were published in top business journals during this period. Tables are included that summarize the findings by dependent variable – awareness, judgment, intent, and behavior. We compare this review with past reviews in order to draw conclusions regarding trends in the ethical decision-making literature and to surface directions for future research.

Research in ethical decision making has consistently demonstrated a positive relationship between others’ unethical behavior and observers’ unethical behavior, providing support for the “Monkey See, Monkey Do” perspective (e.g., Robinson and O’Leary-Kelly, Acad Manage J 41:658–672, 1998 ). However, the boundaries of this relationship have received little research attention. Guided by theory and research in interpersonal distancing, we explore these boundaries by proposing and examining “moral differentiation,” the set of individual and situational characteristics that affect the degree to which one (...) is willing to be influenced by others’ unethical behavior. Using data from 655 undergraduate business students in two U.S. universities, we test moderating hypotheses regarding the influence of moral differentiation characteristics on the relationship between others’ unethical behavior and observers’ unethical behavior. Results suggest that strong moral identity, low need for affiliation, and extraversion weaken the relationship between others’ unethical behavior and observers’ unethical behavior. Implications for managers and future research are discussed. (shrink)

Investigations into ethical judgments generally seem fuzzy as to the relevant research domain. We first attempted to clarify the construct and determine domain parameters. This attempt required addressing difficulties associated with pinpointing relevant literature, most notably the varied nomenclature used to refer to ethical judgments (individual evaluations of actions’ ethicality). Given this variation in construct nomenclature and the difficulties it presented in identifying pertinent focal studies, we elected to focus on research that cited papers featuring prominent and often-used measures of (...) ethical judgments (primarily, but not exclusively, the Multidimensional Ethics Scale). Our review of these studies indicated a preponderance of inferences and conclusions unwarranted by empirical evidence (likely attributable at least partly to inconsistent nomenclature). Moreover, ethical judgments related consistently to few respondent characteristics or any other variables, emergent relationships may not always be especially meaningful, and much research seems inclined to repetition of already verified findings. Although we concluded that knowledge about ethical judgments seems not to have advanced appreciably after decades of investigation, we suggested a possible path forward that focuses on the content of what is actually being judged as reflected in the myriad of vignettes used in the literature to elicit judgments. (shrink)

The aim of this empirical study is to understand how bachelor students at universities of applied sciences (UAS) use their ethical compasses during internships. Semi-structured interviews were held with 36 fourth-year bachelor students across four UAS and three different programs in the Netherlands: Initial Teacher Education, Business Services, and Information and Communication Technology. To our knowledge, no studies appear to have investigated and compared students from multiple professional fields, nor identified the dynamics and the sequence of the strategies in the (...) decision-making process that students use when faced with ethical dilemmas during internships. We found that students’ ethical dilemmas stemmed from: mentors’ or managers’ behaviours/requests, colleagues’ behaviours, organisations’ morally questionable incentives, pupils’ home situations, and pupils’ behaviours/personal stories. The majority of students used multiple strategies and first investigated the ethical dilemmas they encountered and then avoided, intervened, delegated responsibilities, or adjusted to their environments. Students’ values played an important role in experiencing an ethical dilemma, however, these values were not always acted upon. We identified that rather students’ beliefs about having influence and/or ownership (or not), personal interest(s) and power relations influenced the way how they used their ethical compasses. Thus, instead of navigating on moral standards (of their profession), students reacted on beliefs which reflected the ways in which they constructed their internship contexts, social relationships and their own (and others) needs. As a result, half of the mentioned dilemmas were resolved in a prudent-strategic manner (e.g., by prioritising personal interests), instead of morally. This indicates that students did not always convert (moral) values into moral action and did not use their ethical compasses in the way UAS aspires. Finally, this study found that the ways in which students used their ethical compasses were strongly influenced by their environments. (shrink)

Business Ethics: A European Review, EarlyView.

When a member of an organization has to make a decision or act in a way that may benefit some stakeholders at the expense of others, ethical dilemmas may arise. This paper examines ethical sensitivity regarding the duties to clients and owners (principals), employees (agents), and responsibilities to society (third parties). Within this framework, ethical perceptions of male and female managers are compared between the U.S. and Turkey – two countries that differ on power distance as well as the individualism/collectivism (...) dimensions. Our results show that ethical sensitivity varies depending upon whether the interests of principals, agents, or third parties are affected by a given ethical dilemma. We also find that, contingent upon the principal-agent–society relationships, the nationality and gender of the decision-maker influences ethical sensitivity. (shrink)

Our exploratory study considers whether the internal audit function is an efficient “third line of defense” for risk management and control as proposed by The Institute of Internal Auditors. To that end, we interview chief audit executives and experienced internal auditors to examine whether CAEs manage the impressions of audit committee members in the annual accountability process. We also provide an illustration of impression management techniques through a documentary case that explores a unique and exclusive dataset consisting of the main (...) guidance, framework, and accountability documents of one of these organizations. Our analysis highlights how several macro- and microimpression management techniques were used to burnish the image of internal auditors and, more importantly, the management team. Rather than monitoring managers, the CAEs team up with them. Our findings cast doubts on the conceptualization of internal audit as the independent third line of defense envisioned to be a keystone of the governance mosaic. This study supports other research that questions the effectiveness of internal auditing as a governance mechanism. It also contributes to the impression management literature by exposing impression management practices that occur through a private reporting channel—the internal audit function’s annual accountability to the audit committee. Last but not least, significant ethical concerns are raised in regard to internal audit, and research is urged in that area. (shrink)

The relationship between unethical peer behavior and observers’ unethical behavior traditionally has been examined from a social learning perspective. We employ two additional theoretical lenses, social identity theory and social comparison theory, each of which offers additional insight into this relationship. Data from 600 undergraduate business students in two universities provide support for all the three perspectives, suggesting that unethical behavior is influenced by social learning, social identity, and social comparison processes. Implications for managers and future research are discussed.

This study examines the impact of the strength of an accounting firm's ethical environment on the quality of auditor judgment, across different levels of audit expertise. Using a 2 × 2 full factorial 'between subjects' experimental design, with audit managers and audit seniors, the impact of different levels of strength of the ethical environment on auditor judgments was assessed with a realistic audit scenario, requiring participants to make judgments in respect of an inventory writedown. Based on prior research, and as (...) hypothesized, participants possessing greater auditing experience made higher quality technical judgments. While there were no significant differences between the quality of audit judgments made by participants in the stronger ethical environment, over-all results indicate that managers are more sensitive to differences in the strength of the ethical environment than seniors. This is consistent with the hypothesis, and with prior research which suggests that the impact of the code will only be significant if it has been bilaterally internalized by individuals. This has important implications for accounting firms and regulators, given that the International Standard on Quality Control 1, requires the communication and reinforcement of ethical principles as part of firms' quality control processes. It suggests that firms will need to carefully consider the means by which they communicate and reinforce ethical principles, as it is possible to differentially impact auditors of different rank. (shrink)

This study examines the impact of the strength of an accounting firm’s ethical environment (presence and reinforcement vis-à-vis the presence of a code of conduct) on the quality of auditor judgment, across different levels of audit expertise. Using a 2 × 2 full factorial ‹between subjects’ experimental design, with audit managers and audit seniors, the impact of different levels of strength of the ethical environment on auditor judgments was assessed with a realistic audit scenario, requiring participants to make judgments in (...) respect of an inventory writedown. Based on prior research, and as hypothesized, participants possessing greater auditing experience made higher quality technical judgments. While there were no significant differences between the quality of audit judgments made by participants in the stronger ethical environment, over-all results indicate that managers are more sensitive to differences in the strength of the ethical environment than seniors. This is consistent with the hypothesis, and with prior research which suggests that the impact of the code will only be significant if it has been bilaterally internalized by individuals. This has important implications for accounting firms and regulators, given that the International Standard on Quality Control 1, requires the communication and reinforcement of ethical principles as part of firms' quality control processes. It suggests that firms will need to carefully consider the means by which they communicate and reinforce ethical principles, as it is possible to differentially impact auditors of different rank. (shrink)

The research purpose of the study is to investigate and identify correlates of ethical behaviour and attitudes of individuals currently working or pursuing a business‐related graduate degree in Cyprus. Analysis of the quantitative questionnaire revealed that the majority of the respondents had a concept of ‘ethical behaviour’, consider ethics important, and hold attitudes that are conducive to ethical behaviour in business. In addition, findings revealed significant differences in three correlates: age, gender and position. Finally, reflecting the findings, the authors suggest (...) specific actions that aim to improve ethical decision making in the Cyprus business environment. (shrink)

The research purpose of the study is to investigate and identify correlates of ethical behaviour and attitudes of individuals currently working or pursuing a business‐related graduate degree in Cyprus. Analysis of the quantitative questionnaire revealed that the majority of the respondents had a concept of ‘ethical behaviour’, consider ethics important, and hold attitudes that are conducive to ethical behaviour in business. In addition, findings revealed significant differences in three correlates: age, gender and position. Finally, reflecting the findings, the authors suggest (...) specific actions that aim to improve ethical decision making in the Cyprus business environment. (shrink)

Over the past two decades there has been a great deal of research conducted into the question of gender differences in ethical decision making in organisations. Much of this has been based on questionnaire surveys, typically asking respondents (often students, sometimes professionals) to judge the moral acceptability of actions as described in short cases or vignettes. Overall the results seem inconclusive, although what differences have been noted tend to show women as 'more ethical' than men. The authors of this paper (...) believe that attention should be paid to the insight, from Carol Gilligan and others, that women are more inclined than men to subscribe to an 'ethic of care', and that once this perspective is adopted a pattern is discernible. In a critical examination of previous research we pay particular attention to the detailed content of cases used in surveys, and the statistical analysis of findings. We advocate greater reflection on the results of quantitative surveys and sensitivity to different possible interpretations of findings. This we do with our own exploratory study, conducted with UK undergraduate students of accounting, the findings from which seem to support the original hypothesis that where a 'care' orientation is invited, women do indeed react differently to business ethics issues than do men. (shrink)

This research applies the theory of planned behavior to corporate managers’ decision making as it relates to fraudulent financial reporting. Specifically, we conducted two studies to examine the effects of attitude, subjective norm and perceived control on managers’ decisions to violate generally accepted accounting principles (GAAP) in order to meet an earnings target and receive an annual bonus. The results suggest that the theory of planned behavior predicts whether managers’ decisions are ethical or unethical. These findings are relevant to corporate (...) leaders who seek to improve ethical work climates of organizations and to many regulators, accountants, corporate governance officials and investors. (shrink)

Over the past two decades there has been a great deal of research conducted into the question of gender differences in ethical decision making in organisations. Much of this has been based on questionnaire surveys, typically asking respondents (often students, sometimes professionals) to judge the moral acceptability of actions as described in short cases or vignettes. Overall the results seem inconclusive, although what differences have been noted tend to show women as ‘more ethical’ than men. The authors of this paper (...) believe that attention should be paid to the insight, from Carol Gilligan and others, that women are more inclined than men to subscribe to an ‘ethic of care’, and that once this perspective is adopted a pattern is discernible. In a critical examination of previous research we pay particular attention to the detailed content of cases used in surveys, and the statistical analysis of findings. We advocate greater reflection on the results of quantitative surveys and sensitivity to different possible interpretations of findings. This we do with our own exploratory study, conducted with UK undergraduate students of accounting, the findings from which seem to support the original hypothesis that where a ‘care’ orientation is invited, women do indeed react differently to business ethics issues than do men. (shrink)