This empirical study explores the characteristics and degree of implementation of so-called ethics hotlines in transnational companies (TNCs), which allow employees to present allegations of wrongdoing and ethical dilemmas, as well as to report concerns. Ethics hotlines have not received much attention in literature; therefore, this paper aims to fill that gap. Through the analysis of conduct/ethics codes and the compliance programs of the top 150 transnational companies ranked by the United Nations Conference on Trade and Development (UNCTAD) ( 2007 (...) ), we carry out a descriptive and taxonomic study of these companies’ ethics hotlines. We analyze: (1) the basic characteristics of the mechanism, (2) the degree of exigency and the provision of safeguards, (3) the matters reported and the systems for reporting, and (4) the relationships between hotlines and economic characteristics of the firm. Our study compares financial and nonfinancial TNCs as well as North American and European TNCs. Our results show that many firms (especially from North America) have established these procedures. We also find some disparities between European and North American ethics hotlines that suggest differences in the orientation of the procedures. (shrink)

While previous research has established that employees who have a more conscientious leader are more likely to perceive that their leader is ethical, the underlying mechanisms and boundary conditions of this linkage remain unknown. In order to better understand the relationship between leader conscientiousness and ethical leadership, we examine the potential mediating role of leader moral reflectiveness, as well as the potential moderating role of decision-making autonomy. Drawing from social cognitive theory, results from two samples of workgroup leaders and their (...) immediate reports situated in Africa and Asia show that leader conscientiousness is positively related to leader moral reflectiveness, which in turn, is positively associated with employees’ assessment of ethical leadership. Furthermore, and consistent with our hypothesis, results from the two samples show that leader decision-making autonomy moderates the indirect path from leader conscientiousness to ethical leadership through moral reflectiveness, such that only morally reflective leaders who have high decision-making autonomy at work engage in ethical leadership behaviors. In our discussion, we highlight the theoretical and practical implications of our findings and suggest ways in which organizations can better foster ethical leadership. (shrink)

Business Ethics: A European Review, EarlyView.

Corruption as a non-market strategy for firms has gained increasing attention in the field of strategy management. However, the effect of corruption on innovation is unclear, especially in the context of transition economies. Using institutional theory, we examine the relationship between corruption and new product innovation and identify the contextual conditions of the relationship. Using the World Bank Enterprise Survey data from China, our empirical results show that corruption has a positive effect on firms’ new product innovation. Moreover, we find (...) that policy instability and competitive threats from the informal sector positively moderate the relationship between corruption and new product innovation. Using post hoc analysis, we find that the potentially positive effect of corruption on new product innovation is the consequence of inherent institutional weaknesses in transition economies; as the level of institutional development increases, the effect of corruption on firms’ new product innovation will gradually decrease. Overall, our findings provide new insights into understanding corrupt behaviors in transition economies and present managerial implications for firms’ ethical dilemmas in a transition economy context. We argue that the key to overcoming these ethical dilemmas lies in promoting pro-market institutional reform to reduce the potential benefits of corruption. (shrink)

This study seeks to determine the effect of nepotism and favouritism on organisational climate. Using the method of random sampling, 269 persons working in Lithuanian organisations were surveyed. The received data was analysed via the application of the methods of correlation and linear regression. It was determined that organisational climate is influenced significantly by variables such as the manager’s behaviour, safety and relationships with employees, values and traditions, communication, sharing of information, behaviour of employees, and interrelationships and tolerance of one (...) another. Meanwhile, nepotism and favouritism are influenced by the lower number of climate variables. This work fills the void in the knowledge of connections that nepotism and favouritism have with organisational climate, drawing attention to the mutual interaction between these phenomena. The article presents a discussion and the research limitations, and provides guidelines for further research. (shrink)

Many organizations offer their employees the opportunity to voice their opinions about work-related issues because of the positive consequences associated with offering such an opportunity. However, little attention has been given to the possibility that offering voice may have negative effects as well. We propose that negative consequences are particularly likely to occur when employees perceive the opportunity to voice opinions to be “pseudo voice”—voice opportunity given by managers who do not have the intention to actually consider employee input (i.e., (...) managerial disregard). The effects of this kind of deception were examined by means of a survey among employees ( N = 137) and managers ( N = 14) of a Dutch healthcare organization. We hypothesized and found that perceived pseudo voice led to reduced voice behavior and, as a result, increased intragroup conflict. These results imply that while offering voice opportunity is mostly seen as an effective management strategy, negative effects are likely to occur when a manager is perceived to try to deceive employees by pretending to be interested in their points of view. (shrink)

ABSTRACT:This manuscript develops the concept of organizational virtue orientation (OVO) and examines differences between family and non-family firms on the six organizational virtue dimensions of Integrity, Empathy, Warmth, Courage, Conscientiousness, and Zeal. Using content analysis of shareholder letters fromS&P 500companies, our analyses find that there are significant differences between family and non-family firms in their espoused OVO, with family firms generally being higher. Specifically, family firms were significantly higher on the dimensions of Empathy, Warmth, and Zeal, but lower on Courage. (...) Based on these findings we further develop the OVO concept through the discussion of implications and areas for future research. (shrink)

In business ethics, there is a large body of literature focusing on the conditions, factors, and influences in the ethical decision-making processes. This work builds upon the past critical reviews by updating and extending the literature review found in Craft’s :221–259, 2013) study, extending her literature review to include a total of 141 articles. Since past reviews have focused on categorizing results based upon various independent variables, we instead synthesize and look at the trends of these based upon the four (...) ethical decision making categories: Awareness, Behavior, Judgment, and Intention. We focus on the moderation and mediation effects found within these studies and provide an in-depth analysis of future trends. Furthermore, we also highlight key statistical and methodological concerns, outline overarching trends, and directions of future research in empirical ethical decision making. (shrink)

ABSTRACT:This manuscript develops the concept of organizational virtue orientation (OVO) and examines differences between family and non-family firms on the six organizational virtue dimensions of Integrity, Empathy, Warmth, Courage, Conscientiousness, and Zeal. Using content analysis of shareholder letters fromS&P 500companies, our analyses find that there are significant differences between family and non-family firms in their espoused OVO, with family firms generally being higher. Specifically, family firms were significantly higher on the dimensions of Empathy, Warmth, and Zeal, but lower on Courage. (...) Based on these findings we further develop the OVO concept through the discussion of implications and areas for future research. (shrink)

Corporate social responsibility (CSR) aspirations by companies have been identified as a motivating factor for active employee participation in CSR implementation. However, a failure to practise what one preaches can backfire and lead to attribution of hypocrisy. Drawing on a qualitative study of an award-winning sustainability pioneer in the cosmetics sector, we explore the role of moral judgement in how and when employees interpret word–deed misalignment in CSR implementation as hypocritical. First, our case reveals that high CSR aspirations by companies (...) raise employees’ moral expectations. Second, we develop a framework that explains variations in employees’ hypocrisy interpretations based on consequentialist and deontological forms of moral judgement. Our research advances a contextual view of hypocrisy, not as an objective characteristic of an organisation, but as an outcome of interpretative processes of perceived motives and results in CSR implementation. Our framework thereby explains why even highly committed organisations may face accusations of hypocrisy. (shrink)

This study explores the role and potential of benevolent leadership in creating virtuous and compassionate organizations. A number of small and medium enterprises in Turkey, also called “The Anatolian Tigers”, have been experimenting with new ways of incorporating care and compassion at work. The study uses narrative inquiry to explore how benevolent leadership enhances collective performance and wellbeing in Anatolian Tigers. The paper reviews and integrates four streams of research associated with creating common good in organizations: Spirituality, morality, positivity, and (...) community, and links each of these elements to creating virtuous and compassionate organizations through narrative inquiry. The paper proposes that benevolent leadership can contribute to the long-term health and sustainability of organizations through its four elements: spiritual depth, ethical sensitivity, positive engagement, and community responsiveness. (shrink)

This research illustrates dangers inherent in the gap created when organizations decouple ethics program adoption from implementation. Using a sample of 182 professionals in the pharmaceutical and financial services industries, we examine the relationship between structural decoupling of formal ethics programs and individual-level perceptions and behavior. Findings strongly support the hypothesized relationships between decoupling and organizational members’ legitimacy perceptions of the ethics program, psychological contract breach, organizational cynicism, and unethical behavior.

The academic literature on unethical leadership is witnessing an upward trend, perhaps given the magnitude of unethical conduct in organisations, which is manifested in increasing corporate fraud and scandals in the contemporary business landscape. Despite a recent increase, scholarly interest in this area has, by and large, remained scant due to the proliferation of concepts that are often and mistakenly considered interchangeable. Nevertheless, scholarly investigation in this field of inquiry has picked up the pace, which warrants a critical appraisal of (...) the extant research on unethical leadership. To this end, the current study systematically reviews the existing body of work on unethical leadership and offers a robust and multi-level understanding of the academic developments in this field. We organised the studies according to various themes focused on antecedents, outcomes and boundary conditions. In addition, we advance a multi-level conceptualisation of unethical leadership, which incorporates macro, meso and micro perspectives and, thus, provide a nuanced understanding of this phenomenon. The study also explicates critical knowledge gaps in the literature that could broaden the horizon of unethical leadership research. On the basis of these knowledge gaps, we develop potential research models that are well grounded in theory and capture the genesis of unethical leadership under our multi-level framework. Scholars and practitioners will find this study useful in understanding the occurrence, consequences and potential strategies to circumvent the negative effects of unethical leadership. (shrink)

Does national success with an emerging technology require ethical sacrifices? This question is considered through the simultaneous consideration of ethics, investment, and outcomes in the nine jurisdictions that are making the largest investments in nanotechnologies—an important emerging technology. It is found that while ethical environment has no notable effect on pure and applied research, a more positive ethical environment is associated with measures associated with invention and commercialization. In summary, a race-to-the-top supports invention and commercialization of emerging technologies. A critical (...) finding as it suggests that issues such as corruption and regulation could be critical in limiting the extraction of social and economic benefit from emerging technologies (like nanotechnologies). (shrink)

This article synthesizes insights from deterrence theory and social psychology literature on retributive justice to develop and test a theoretical model which predicts how and why observers’ tax compliance intentions are influenced by knowledge of the punitive outcomes faced by individuals found guilty of tax fraud. We test our model experimentally on a sample of Canadian taxpayers and manipulate perceived responsibility for a fraud and whether a fraud perpetrator is punished. We show that observers’ tax compliance increases when a fraud (...) perpetrator is punished only when the perpetrator is perceived as blameworthy. The psychological process through which this positive influence operates is relatively complex, as it includes perceptions of punishment deservingness and affect. We also find that tax compliance decreases when a tax fraud perpetrator is unpunished, regardless of perceived blameworthiness. Our results are robust when we control for economic determinants known to influence fraud. The article concludes by discussing our findings’ implications for fraud research and policy. (shrink)

ABSTRACT:The purpose of this article is to review literature that is relevant to the social scientific study of ethics and leadership, as well as outline areas for future study. We first discuss ethical leadership and then draw from emerging research on “dark side” organizational behavior to widen the boundaries of the review to includeunethical leadership. Next, three emerging trends within the organizational behavior literature are proposed for a leadership and ethics research agenda: 1) emotions, 2) fit/congruence, and 3) identity/identification. We (...) believe each shows promise in extending current thinking. The review closes with discussion of important issues that are relevant to the advancement of research on leadership and ethics. (shrink)

Many organizations offer their employees the opportunity to voice their opinions about work-related issues because of the positive consequences associated with offering such an opportunity. However, little attention has been given to the possibility that offering voice may have negative effects as well. We propose that negative consequences are particularly likely to occur when employees perceive the opportunity to voice opinions to be “pseudo voice”—voice opportunity given by managers who do not have the intention to actually consider employee input (i.e., (...) managerial disregard). The effects of this kind of deception were examined by means of a survey among employees (N = 137) and managers (N = 14) of a Dutch healthcare organization. We hypothesized and found that perceived pseudo voice led to reduced voice behavior and, as a result, increased intragroup conflict. These results imply that while offering voice opportunity is mostly seen as an effective management strategy, negative effects are likely to occur when a manager is perceived to try to deceive employees by pretending to be interested in their points of view. (shrink)

Moral stress is an increasingly significant concept in business ethics and the workplace environment. This study compares the impact of moral stress with other job stressors on three important employee variables—fatigue, job satisfaction, and turnover intentions—by utilizing survey data from 305 customer-contact employees of a financial institution’s call center. Statistical analysis on the interaction of moral stress and the three employee variables was performed while controlling for other types of job stress as well as demographic variables. The results reveal that (...) even after including the control variables in the statistical models, moral stress remains a statistically significant predictor of increased employee fatigue, decreased job satisfaction, and increased turnover intentions. Implications for future research and for organizations are discussed. (shrink)

The main purpose of our study was to gain a deeper understanding of how culture influences the interpretation of ethical leadership by both leaders and followers in Zambia and Sweden. The study was conducted using an interpretative narrative inquiry with a small sample of ten participants selected using a purposive sampling method. The participants were drawn from six small and medium local authorities in Sweden and Zambia. The empirical data was collected using semi-structured interview guides with interview sessions lasting 45 (...) minutes on average. The data collected was transcribed and analyzed using narrative and thematic analysis. Based on this analysis, we came up with four main themes regarding the interpretation of ethical leadership by leaders and followers, and these are: Morality, Law, Humanity and Nature which constitute our Culture-Ethical Leadership interpretation model. The empirical narratives demonstrated some similarities in the interpretation of ethical leadership between leaders and followers in Sweden and Zambia. The leaders and followers from both countries affiliated ethical leadership to morality, humanity, adherence to the law, and, caring and protecting nature. Our research also led us to conclude that there is a degree of variance in the interpretation of ethical leadership which relates to the differences in the cultural contexts. In Zambia, leaders and followers show high inclination to the law as being ethical which is reflected in Bello ’s statement that failure to follow rules and regulations is a manifestation of unethical leadership while in Sweden, leaders and followers are inclined to high morality and humanity influenced by high levels of trust as narrated by our participants from Sweden. (shrink)