A variety of stakeholders including investors, corporate managers, customers, suppliers, employees, researchers, and government policy makers have long been interested in the relationship between the financial performance of a corporation and its commitment to business ethics. As a subject of research, the relations between business ethics and corporate valuation has yet to be thoroughly quantified and investigated. This article is an effort to amend this inadequacy by demonstrating a statistically significant association between ethical commitment and corporate valuation measures. Consistent with (...) anecdotal evidence, we have found a significant association between the ethical commitment of Korean companies and their valuation on the Korean stock market. However, the result reveals that the association between ethical commitment and financial performance is not significantly supported. (shrink)

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

Corporate codes of conduct are a practical corporate social responsibility (CSR) instrument commonly used to govern employee behavior and establish a socially responsible organizational culture. The effectiveness of these codes has been widely discussed on theoretical grounds and empirically tested in numerous previous reports that directly compare companies with and without codes of conduct. Empirical research has yielded inconsistent results that may be explained by multiple ancillary factors, including the quality of code content and implementation, which are excluded from analyses (...) based solely on the presence or absence of codes.This study investigated the importance of code content in determining code effectiveness by examining the relationship between code of conduct quality and ethical performance. Companies maintaining high quality codes of conduct were significantly more represented among top CSR ranking systems for corporate citizenship, sustainability, ethical behavior, and public perception. Further, a significant relationship was observed between code quality and CSR performance, across a full range of ethical rankings. These findings suggest code quality may play a crucial role in the effectiveness of codes of conduct and their ability to transform organizational cultures.Future research efforts should transcend traditional comparisons based on the presence or absence of ethical codes and begin to examine the essential factors leading to the effective establishment of CSR policies and sustainable business practices in corporate culture. (shrink)

Little is known and understood about ethics management or the development of formal, systematic, and goal-directed initiatives to improve ethics in the public relations workplace. This study found little ethics training and written guidelines in the public relations workplace. Organizational ethics initiatives are poorly communicated to practitioners and rely mostly on punitive restraints with little reward for ethical behavior. For many practitioners, ethics is not learned through workplace ethics initiatives but rather is mostly informed by external influences including personal values, (...) family upbringing, and professional work experiences. (shrink)

This article reviews the concept of moral responsibility in business ethics and examines the seven previous articles using several types of responsibility in business as the overriding construct to gain a fuller understanding of the ethical impact of these articles. The types of responsibility that are used in this analysis are: legal, corporate, managerial, social, stakeholder, and societal. Observations about how normative ethical principles might also be applied to these articles are also advanced. This article concludes with a call for (...) more conceptual and empirical research into the notion of responsibility in business. (shrink)

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

Corporate America is institutionalizing ethics through a variety of structures, systems, and processes. This study sought to identify managerial perceptions regarding the institutionalization of ethics in organizations. Eighty-six corporate level marketing and human resource managers of American multi-national corporations responded to a mail survey regarding the various implicit and explicit ways by which corporations institutionalize ethics. The results revealed that managers found ethics to be good for the bottom line of the organizations, they did not perceive the need for additional (...) formalization of ethics, and that they perceived implicit forms of institutionalizing ethics (e.g., leadership, corporate culture, top management support) to be more effective than the explicit forms of institutionalizing ethics (e.g., ethics ombudspeople, ethics committees, ethics newsletters). Implications of the survey and future research directions conclude the paper. (shrink)

This paper argues that the concept of reliability provides a useful framework for analyzing defects in organizational design and for prescribing changes that will facilitate ethical decision making. Reliability becomes an ethical concern when the individual or organizational interest diverges from the collective interest. Redundancy and requisite variety provide two design tools which can enable organizations to act reliably in the collective interest. The paper then discusses potential disadvantages to the use of a reliability framework as well as possible problems (...) of implementation. It concludes by examining avenues for future research. (shrink)

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

Developing and implementing a meaningful code of conduct by managers or consultants may require a change in orientation that modifies the way these precepts are determined. The position advocated herein is for a different approach to understanding and organizing the guiding parameters of the firm that requires individual reflection and empowerment of the entire organization to advance their shared values. The processes involved are discussed using four discrete stages that move from the personal to the work team and to the (...) unit to the full company, followed by the board of directors’ evaluation. The hoped-for end product is dynamic, employee-driven, codes of conduct that recognize the systemic and far-reaching impact of organizational activities across internal and external stakeholders. Operational details for and some issues associated with its implementation are also provided. (shrink)

There are many ways that accountants and managers can influence the reported accounting results of their organizational units. When such influence is directed at changing the amount of reported earnings, it is known as earnings management. The purpose of this paper is to present the results of surveys of undergraduate students, MBA students, and practicing accountants concerning their attitudes on the ethical acceptability of earnings management. Analysis of the survey results reveals how the attitudes of the three groups differ and (...) what variables are associated with these differences. Based on the analysis, the authors suggest changes in accounting education curriculum and ethics awareness programs in business which might increase students'' and practitioners'' sensitivity to the ethical ramifications of earnings management. (shrink)

The study examines employee, managerial, and ethics officer perceptions regarding their companies codes of ethics. The study moves beyond examining the mere existence of a code of ethics to consider the role that code content and code process (i.e. creation, implementation, and administration) might play with respect to the effectiveness of codes in influencing behavior. Fifty-seven in-depth, semi-structured interviews of employees, managers, and ethics officers were conducted at four large Canadian companies. The factors viewed by respondents to be important with (...) respect to code effectiveness include: provisions of examples; readability; tone; relevance; realism; senior management support; training; reinforcement; living up to standards; reporting requirement; anonymous phone line; communicating violations; and enforcement. The factors found to be potentially important include: justification for provisions; employee involvement; and sign-off requirements. Factors found not to be important include: objectives for the code; prior distribution; testing; and relating ones performance review to compliance with the code. (shrink)

Traditionally, conceptualizations of human values are based on the assumption that individuals possess a single integrated value system comprising those values that people are attracted by and strive for. Recently, however, van Quaquebeke et al. (in J Bus Ethics 93:293–305, 2010 ) proposed that a value system might consist of two largely independent value orientations—an orientation of ideal values and an orientation of counter-ideal values (values that individuals are repelled by), and that both orientations exhibit antithetic effects on people’s responses (...) to the social world. Following a call for further research on this distinction, we conducted two studies to assess the independent effects of ideal and counter-ideal values in leadership settings. Study 1 ( N = 131) finds both value orientations to explain unique variance in followers’ vertical respect for their leaders. Study 2 ( N = 136) confirms these results and additionally shows an analogous effect for followers’ identification with their leaders. Most importantly, we find that both value orientations exhibit their effects only independently when the content of the two orientations pertain to different value types in Schwartz’s (in J Soc Issues 50:19–46, 1994 ) circumplex model. Implications for theory and practice are discussed. (shrink)

Business ethics has emerged in recent years as a field of significant scholarly endeavour. Particularly well documented is the existence of ethical conflict at work and the reported inseparability of business decisions and moral consequences. However, to date, the majority of studies have been conducted in the American business context.This paper examines the concept of ethical conflict as experienced by employees in the Australian context. According to a sample of Western Australian managers, ethical conflicts at work do occur — with (...) relative frequency. Of considerable concern is the high incidence of cases where the demands of superiors are deemed to be the cause of this conflict. This finding is particularly disturbing as superiors are also the primary influence on employee ethical decision making. It would see that the ethics role models are also the instigators of unethical behaviour. (shrink)

This paper reports on a study of large U.S. based corporations concerning the status of formal ethics statements. Almost all responding firms (91%) have promulgated a formal code of ethics while one-half have published values statements and about one-third have a corporate credo. Analysis of these statements concentrated on to whom they are communicated; whether codes of ethics contain information pertinent to the industry, include sanctions for violations and provide specific guidance regarding gifts. Conclusions and implications for managers and researchers (...) are drawn. (shrink)

In this paper I examine how the constituent elements of a firm's organizational structure affect the ethical behavior of workers. The formal features of organizations I examine are the compensation practices, performance and evaluation systems, and decision-making assignments. I argue that the formal organizational structure, which is distinguished from corporate culture, is necessary, though not sufficient, in solving ethical problems within firms. At best the formal structure should not undermine the ethical actions of workers. When combined with a strong culture, (...) however, the organizational structure may be sufficient in promoting ethical conduct. While helpful, ethics training and corporate codes are neither necessary nor sufficient in promoting ethical behavior within firms. (shrink)

This study evaluates responses to the Real Estate Ethical Code. Voice Stress Analysis (VSA) is used to evaluate the responses of real estate sales people to ethically-based questions. The process and the responses given enabled the authors to gain insight into pressure-causing ethical situations and to explore new uses of VSA. Some respondents were stressed while following the ethical code guidelines. Others showed no stress about breaking the formal code. The study reaffirms that the presence of formal ethical guidelines does (...) not assure that the rules will be willingly followed. (shrink)

This paper reports on the findings of the third in a series of surveys of large U.S.-based and multinational corporations on their ethics statements. Focusing on four types – values statement, corporate credo, code of ethics and Internet privacy policy – we find growth in the use of these statements over the last decade. We discuss the external communication of these statements, including the avenues that are now used for promotion and their intended audiences. The paper concludes with a number (...) of research issues to be addressed. (shrink)

Grounded upon the late 1970s phrase "institutionalizing ethics into business," I present a multi-component model and research agenda to enhance our understanding of organizations' efforts to integrate ethics into the daily decision-making process of employees. Three research foci are emphasized: (I) the need to establish consistent categorical frameworks to describe business organizations' efforts in the field, (2) the study of the interrelationships between the various components presented in the model, and (3) the exploration of the linkage between organizational efforts to (...) institutionalize ethics and ethical employee behavior. Research and organizational implications evolving from these research foci are discussed. (shrink)

Efforts to institutionalize ethics in corporations have been discussed without first addressing the desirability of norm conformity or the possibility that the means used to elicit conformity will be coercive. This article presents a theoretical context, grounded in models of social control, within which ethics initiatives may be evaluated. Ethics initiatives are discussed in relation to variables that already exert control in the workplace, such as environmental controls, organizational controls, and personal controls.

Putting measures in place to prevent wrongdoing in organizations is important, but detecting and correcting wrongdoing are also vital. Employees who detect wrongdoing should, therefore, be encouraged to respond in a manner that supports corrective action. This article examines the influence of the ethical culture of organizations on employee responses to observed wrongdoing. Different dimensions of ethical culture are related to different types of intended responses. The findings show that several dimensions of ethical culture were negatively related to intended inaction (...) and external whistleblowing and positively related to intended confrontation, reporting to management, and calling an ethics hotline. (shrink)

The objective of this paper is to develop and describe a construct of the ethos of the corporate codes of ethics (i.e. an ECCE construct) across three countries, namely Australia, Canada and Sweden. The introduced construct is rather unique as it is based on a cross-cultural sample seldom seen in the literature. While the outcome of statistical analyses indicated a satisfactory factor solution and acceptable estimates of reliability measures, some research limitations have been stressed. They provide a foundation for further (...) research in the field and testing of the ECCE construct in other cultural and corporate settings. We believe that the ECCE construct makes a contribution to theory and practice in the field as it outlines a theoretical construct for the benefit of other researchers. It is also of managerial interest as it provides a grounded framework of areas to be considered in the implementation in organizations of corporate codes of ethics. (shrink)

The paper analyses results from a questionnaire-based survey of ethical behavior of members of the Western Australian Senior Executive Service. Relating to definitions of deontology (duty) and teleology (ends over means) the study examines the validity of three hypotheses on ethical behaviour/decision making frameworks. Longitudinal data is related to the 1983–90WA Inc period. The study establishes that SES managers apply ethical frameworks in order to understand the meaning of: ethical behaviour and that there are groups of managers with distinct understandings (...) of what constitutes ethical behavior which is reflective of particular ethics theories. Three groups of managers are identified: (1) emphasises teleology (2) focuses on external influences (rules, standards and codes) and (3) encompasses both teleology and external influences and, to a lesser extent deontology. Only this latter group is regarded as having an appropriate repertoire of potential responses to any given ethical dilemma. There is no support for the view that those beginning employment in the public service post 1984 adversely affected the ethical decision making frameworks of other senior managers. (shrink)

This paper examines several key aspects of the ethical environment facing the insurance industries of Poland, The Czech Republic and Hungary as they complete the transition from Communist insurance systems built upon state-owned monopolies to viable private domestic insurance markets, and then seek to harmonize their markets with the single insurance market of the European Union. Since many types of ethical problems encountered during the transition are unlikely to diminish significantly as a result of either privatization or regulation of the (...) insurance markets of these countries, measures are identified that should help to improve the ethical environments of these markets. (shrink)

Business codes are a widely used management instrument. Research into the effectiveness of business codes has, however, produced conflicting results. The main reasons for the divergent findings are: varying definitions of key terms; deficiencies in the empirical data and methodologies used; and a lack of theory. In this paper, we propose an integrated research model and suggest directions for future research.

A variety of stakeholders have long been interested in the factors that are related to firm valuation. This article investigates why companies with more comprehensive corporate governance (CG) have a value premium over companies with less comprehensive CG. We posit and find that the cost of equity capital (COC) decreases with the strength of CG, suggesting that the value premium stems from the lower COC for more comprehensive CG. We also find that the COC is lower for companies with strong (...) commitment to business ethics (BE) than for those with weak commitment to BE and that the beneficial effect of CG on the COC is more pronounced for companies with weak commitment to BE than for those with strong commitment to BE. Companies with more comprehensive CG tend to exhibit strong commitment to BE, but the beneficial effect of corporate ethical commitment is not completely subsumed by CG. Our results suggest that companies could lower their cost of equity capital and increase firm value by adopting more comprehensive CG practices and committing to higher standards of BE. (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.

The United States Sentencing Commission’s guidelines for the sentencing of organizations found guilty of violating federal laws recently became effective. Dramatically increased penalties are possible under these gudelines, but so too is a substantial reduction in the penalties imposed on organizations that have an effective program in place to prevent and detect violations. This provides corporations with a tremendous new incentive in inaugurate organizational ethics audits both to avoid violations in the first instance and to reduce the penalty imposed in (...) the event that a violation occurs. We argue, however, that there have always been very good reasons for organizations to conduct such audits, which emphasize the identification of the organizational factors that create incentives for unethical behavior. Corporate ethics programs initiated without reference to such factors cannot reasonably be expected to be effective in improving a company’s internal ethical environment. (shrink)

Multi-national corporations (MNCs) have been criticised for not behaving ethically in some situations, which could have a negative effect on their reputation. This study examines the ethics of a large MNC in its relationship with its suppliers. A brief literature review of corporate identity, business ethics and buyer–supplier relationships is undertaken. The views and perceptions of the buying staff and the suppliers to a large South African MNC are obtained and discussed. The results indicate that this MNC has a good (...) corporate reputation among both its suppliers (an important stakeholder) and its own buying department. The existence and implementation of formal codes of ethics was found to be a necessary, but not sufficient condition for good ethical practice. Candid relationships with suppliers emerged as a second and important factor. Ethical perceptions of buyers by suppliers are driven by the management of corporate identity, through the elements of ethical standards and candid relationships. We present a model of corporate identity/reputation in Buyer–Supplier Relationships. (shrink)

This paper examines the status of Corporate Ethical Policies (CEP) in large companies in Argentina, Brazil and Spain, with a special emphasis on Corporate Ethics Statements (CES), documents that define the firms’ philosophy, values and norms of conduct. It is based on a survey of the 500 largest companies in these nations. The findings reveal many similarities between these countries. Among other things, it emerges that most companies give consideration to ethics in business and have adopted some kind of formal (...) or informal ethical policies. Regardless of whether or not they have a CES, companies agree that ethical conduct must be taken into account when selecting, appraising and promoting personnel as an important ethical policy. There is a growing tendency to draw up formal corporate ethics documents. These documents are perceived, first and foremost, as supporting the development of corporate culture. Most respondents believe that primary responsibility for ethical issues in the company rests with the CEO. Finally, the findings indicate that most companies that devote more resources to communicating and implementing CESs have two or more formal ethics documents. The main differences between the countries included in the study concern the emphasis given to specific aspects, such as avoiding misconduct or taking ethical criteria into account when selecting personnel. The emphasis is greatest in countries where corruption seems most prevalent. (shrink)

The objective of this study is to test the embeddedness of codes of ethics (ECE) in organizations on aggregated data from three countries, namely Australia, Canada and the United States. The properties of four constructs of ECE are described and tested, including surveillance/training, internal communication, external communication and guidance. The data analysis shows that the model has satisfactory fit, validity and reliability. Furthermore, the results are fairly consistent when tested on each of the three samples (i.e. cross‐national validation). This cross‐national (...) study makes a contribution beyond previous descriptive or exploratory studies by using confirmatory factor analysis and structural equation modeling. Nevertheless, a number of limitations are raised, all of which provide opportunities for further research in refining, extending and testing the proposed ECE model in other cultural and corporate settings. (shrink)

Currently, an increasing number of organizations are attempting to enhance inclusiveness of under represented individuals through proactive efforts to manage their diversity. In this article, we define diversity management against the backdrop of its predecessor, affirmative action. Next, selected examples of organizations that have experienced specific positive bottom line results from diversity management strategies are discussed. The present paper also provides a conceptual model to examine antecedents and consequences of effective diversity management. Additional research areas identified from the model and (...) literature review result in a number of research propositions intended to enhance the exploration and understanding of diversity management. (shrink)

The stock market crash of 1987 had a profound effect on corporate Australia and the Australian community in general. The fall-out revealed that some of our most respected business figures had not been as ethical, or even as lawful, as we would have hoped. This impropriety produced in Australia an awakening to business ethics. Whilst many companies endeavoured to introduce ethical practices into their corporations, they perceived ethics as a way of minimising damage to the corporation and in some cases (...) as a means of competitive advantage. What was lost was the reason that one should embark on business ethics; and that is to make the society and corporate Australia a more ethical place in which to exist.This paper proposes a model based on 2 factors: commitment and partnerships, as a means of enabling corporate Australia to refocus attention on the main purpose of being inherently ethical in all that we do. This ethical model requires a commitment to partnerships with all stakeholders both internal and external in an attempt to enhance the level of ethical business practices that are contemplated and pursued within corporate Australia. Whilst the research agenda and the information collected is Australian-based, it is hoped that the ideas contained within this paper will have a wider appeal to corporations in similar cultural settings. (shrink)

Focusing on professional codes of ethics in HR, this article establishes a foundation for understanding the contents of thesecodes and for future research in this area. Five key professionalethics codes in HRM are analyzed according to six obligations.The resulting characterizations revealed that these codes advocatefive principles related to integrity, legality, proficiency, loyalty, and confidentiality. Particular flaws in code content and implementationare identified with recommendations for addressing them. Also,suggestions for standardizing professional HR codes and forfuture research are discussed.

A business code of ethics is widely regarded as an important instrument to curb unethical behavior in the workplace. However, little is empirically known about the factors that determine the impact of a code on unethical behavior. Besides the existence of a code, this article studies five determining factors: the content of the code, the frequency of communication activities surrounding the code, the quality of the communication activities, and the embedment of the code in the organization by senior management as (...) well as local management. The full model explains 32% of observed unethical behavior while the explanatory value of a code alone is very modest. The study shows when codes are effective, and even when they become counter effective. (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)

Due to the frequent occurrence of ethical transgressions and unethical employee behaviors, there has lately been an increasing interest in the ethical foundations of contemporary organizations. However, large-scale comprehensive analyses of organizational ethics are still comparatively limited. Our study contributes to both management control and business ethics literature by empirically examining potential antecedents as well as resulting effects of ethical work climates on organizational-level outcomes. Based on a cross-sectional survey among 295 large- and medium-sized companies, we find that more informal (...) means of control constitute important elements of a broader organizational control context that are strongly related to the emergence of coherent ethical work climates with an increased awareness of ethical issues. Moreover, our results show that the relationship between ethical work climates and organizational performance can be considered as rather indirect as it is fully mediated by increased mutual trust among employees. Overall, our study thus supports the particular importance of ethical work climates and identifies appropriate means to encourage ethical conduct. (shrink)

When a "corporation" engages in unethical activity it is frequently difficult to determine whether the responsibility for such an action properly lies with management or should rather be ascribed to the employee engaged in the activity. In this paper I argue that managers ought to be held responsible for the moral environment in which employees work and that this be achieved through the implementation of a morals audit which focuses on the process of achieving objectives rather than on results.

This paper examines the implementation, communication and benefits of corporate codes of ethics by the top companies operating in Australia, Canada and Sweden. It provides an international comparison across three continents. It is also based on a longitudinal approach where three national surveys were performed in 2001–2002 and replications of the same surveys were performed in 2005–2006. The empirical findings of this research show in all three countries that large organisations indicate a substantial interest in corporate codes of ethics. There (...) are, however, differences in the ways that the companies in each country implement and communicate their corporate codes of ethics and the benefits that they see being derived from them. The longitudinal comparison between 2001–2002 and 2005–2006 indicates changes in the implementation, communication and benefits of corporate codes of ethics in the three countries. (shrink)

An organization's management control system can play an important role in influencing ethical behavior among employees. In this paper a theoretical framework of control is developed by linking various ethics related control mechanisms reported in the literature to the primary components of a management control system. In addition, the findings of a survey of the Financial Post's Top 1 000 Canadian industrial and service companies are reported. The survey investigated organizations' use of ethical codes of conduct, whistleblowing systems, ethics committees, (...) judiciary boards, employee training in ethics, and ethics focused corporate governance and reward systems. The findings indicate that ethics related control mechanisms, particularly codes of conduct, are being used by a good number of organizations. However, closer analysis of the data suggests that many companies may only be paying lip service to the importance of promoting ethical behavior. (shrink)

This paper investigates the regulation of ethical behavior of professionals. Ethical perceptions of South African professionals operating in the business community (specifically accountants, lawyers and engineers) concerning their need for and awareness of professional codes, and the frequency and acceptability of peer contravention of such codes were sought. The existence of conflict between corporate codes and professional codes was also investigated. Results, based on 217 replies, indicated that the professionals believe that codes are necessary and are relatively aware of the (...) contents of such codes. Despite these ethical tendencies, respondents (particularly lawyers) believe that their peers contravene their professional codes relatively often. No significant differences in ethical tendencies between professionals consulting to and those working in business were found. Many respondents were regulated by more than one code of ethics, but few experienced conflict between such codes. In the events of conflict occurring professionals chose to adhere to their professional code above others. (shrink)

The objective of this study is to test the embeddedness of codes of ethics (ECE) in organizations on aggregated data from three countries, namely Australia, Canada and the United States. The properties of four constructs of ECE are described and tested, including surveillance/training, internal communication, external communication and guidance. The data analysis shows that the model has satisfactory fit, validity and reliability. Furthermore, the results are fairly consistent when tested on each of the three samples (i.e. cross-national validation). This cross-national (...) study makes a contribution beyond previous descriptive or exploratory studies by using confirmatory factor analysis and structural equation modeling. Nevertheless, a number of limitations are raised, all of which provide opportunities for further research in refining, extending and testing the proposed ECE model in other cultural and corporate settings. (shrink)

This paper reports the results of a study of the top 500 private sector organizations and the top 100 public sector organizations in Sweden. It is a replication of the study by Svensson et al . (2004) . The aim of the study was to describe and compare the business ethics commitment of organizations across the two sectors. The empirical findings indicate that the processes involved in business ethics commitment have begun to be recognized and acted upon at an organizational (...) level in Sweden. Some support is provided to show that codes of ethics are developing in some of Sweden's largest private and public sector organizations – although this is happening to a lesser extent in the public sector. It is noted that an effect of a code of ethics on the bottom line of the business was acknowledged by respondents in both private and public sector organizations. We believe that the supporting measures of business ethics commitment appear to be underutilized in both private and public sector organizations in Sweden (among those that possess codes of ethics), thus indicating that the commitment to business ethics in Swedish organizations has potential for future development. (shrink)

This study examines the self-reported ethics of both current and future advertising practitioners, and compares their responses to four scenarios and 17 statements on advertising ethics. Stepwise discriminant analysis was used to determine the extent to which both groups applied the classical ethical theory of deontology to the scenarios and statements. Results indicate significant differences between both groups. For example, current advertising practitioners are significantly less likely than future practitioners to apply deontology to decision making. The implications of these results (...) are discussed and suggestions for future research are outlined. (shrink)

The material to follow challenges the conceptual uniqueness and contribution of the content of the field of marketing ethics. Based on a comprehensive inspection of the marketing ethics literature, this "review note" (an uncommon genre of academic manuscript – a briefly-presented review highlighting a specific point) concludes that, in terms of pragmatic behavioral guidance as well as conceptual content, marketing ethics has nothing new nor distinctive to offer. Though an initially unexpected conclusion, perhaps, explanation is provided for why marketing ethics' (...) absence of contribution is perfectly natural and appropriate. Evidence also is found to establish that the paper's contrarian-appearing position may not be extremist after all. (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)

After the USSR collapsed, the Russian economy underwent serious changes from being plan-based to a market economy. These changes, together with political instability, created a business environment where no attention was paid to ethics. Russian managers have little experience operating in a market economy, which created many misunderstandings with foreign partners, especially regarding ethical issues of doing business. This study examined the factors influencing the ethical judgments of Russian employees to understand how they perceive ethical issues and make ethical or (...) unethical decisions at work. The Ferrell and Gresham framework was employed in this study to understand the process of making ethical decision by an individual. Transparency was proposed as a moderator of the relationship between opportunity factors and employees’ ethical judgments. Findings of this study show that Russian employees tend to be more tolerant towards ethically questionable behaviors at a workplace. Moreover, the results also demonstrate that transparency moderates the influence of opportunity to behave unethically on ethical judgments. (shrink)

Is being responsible good enough? Stone (1975) argued that we need corporate moral responsibility because neither law nor market is adequate to forestall harmful effects of business activities. However, it is not possible for businesses to become responsible for all forms of foreseeable, preventable harm that they produce. This is illustrated here by cases from insurance, television programming, automobiles and weapons production. Reflection on these examples leads to the formulation of a new conception of unintended harms as moral externalities of (...) business activities. Although one might argue that these (negative) moral external effects are outweighed by the desirable end products of business activities, three reasons not to accept the results of such a moral subtraction(or double effect) argument are presented. Instead, the article concludes by offering four techniques for a qualitative, ethical analysis of produced artefacts and their consequences; intended not to displace but to supplement the study of moral responsibility in business. (shrink)

Based on the findings of several research studies of professionals in both the property-liability insurance industry and the life insurance industry, the paper makes and supports several important points. First, ethical challenges in the insurance industry involve not only a series of ethical dilemmas frequently faced by those working in the business, but also a variety of factors that hinder those working in the industry as they seek to resolve the ethical dilemmas encountered in the course of their work. Both (...) of these two components of ethical challenges must be understood by those in the financial services industry who will deal with insurance operations in the future. Second, whereas the life insurance business and the property-liability insurance business have traditionally been viewed as being quite different from one another and still are in terms of operations and regulation, the research findings show that they are no longer very different in terms of the key ethical challenges faced by those working in the two segments of the industry. The paper shows how during the past decade the ethical challenges in the property-liability insurance industry have become quite similar to those in the more troubled life insurance industry. (shrink)