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.

Thomas W. Dunfee, in addition to his many other contributions to business ethics literature, has generated a stream of research that attempts to tackle the issue of corruption. Dunfee's research on corruption includes three primary contributions: the introduction of "Integrative Social Contract Theory" which provides a normative theoretical framework by which to judge the morality of global business activity including corruption; the "C2 Principles", which outline specific content and implementation measures that corporations can voluntarily adopt to combat corruption; and a (...) normative evaluation of "guanxi," a concept which can lead to questionable corruption practices in China. The article will highlight Dunfee's contribution to the literature and suggest future research directions based on his academic work. (shrink)

The American regulatory model of corporate governance rests on the theory of self-regulation as␣the most effective and efficient means to achieve corporate self-restraint in the marketplace. However, that model fails to achieve regular compliance with baseline ethical and legal behaviors as evidenced by a century of repeated corporate debacles, the most recent being Enron, WorldCom, and Refco. Seemingly impervious to its domestic failure, Congress imprinted the same self-regulation paradigm on legislation restraining global business behavior, the Foreign Corrupt Practices Act. This (...) anti-bribery initiative prohibits unethical and illegal payments made to foreign public officials in an effort to eradicate bribery as a rational-choice global market entry strategy. However, this paper illustrates, using newly complied statistics from 1977 to 2008, that the FCPA has not had a dramatic impact on U.S. global corporate behavior despite its recent high profile coverage and the tough regulatory rhetoric about corporate compliance. The paper also extends the prior Cragg and Woof FCPA efficiency study and provides current empirical evidence to resolve several unanswered questions raised by that earlier study. (shrink)

This study explores the rationality behind firms’ decision to admit or deny their involvement in bribery when responding to confidential surveys conducted by international agencies. Specifically, we posit that firms’ reluctance to provide accurate information about their engagement in bribery is at least to some extent contingent on certain situational factors. In other words, we claim that this behavior is context dependent. The paper uses the notions provided by the theory of planned behavior to understand the way in which the (...) corruption of the legal environment, the intensity of market competition, and identification risk influence firms’ decision to lie about their involvement in bribery. To test these notions, we use databases from the fifth wave of the EBRD-World Bank Business Environment and Enterprise Performance Survey, country-level data from the Kauffman Foundation and macroeconomic information from the World Bank database. We run ordinary least squares with geographic region-clustered standard errors on data from 30 countries and 6122 individual firms during the period 2012–2013. Consistent with our expectations, the results indicate that firms operating within more corrupt legal environments, facing more competition, and bearing a higher risk of being identified are less likely to deny their involvement in bribery. We conclude that not all firms have the same incentives to lie about their participation in bribery, and therefore, identifying the drivers of this heterogeneity may help policymakers better assess the reliability of bribery information collected through confidential surveys. (shrink)

The aim of this study is to better understand why public officials and business employees engage in corruption. Insight into individual-level explanations for corruption was obtained with the aid of a self-report survey. The results suggest that the most indicative factors of whether or not individuals are corruption-prone are as follows: the moral conviction they have to refrain from corruption; perceptions of whether their colleagues approve of and engage in corruption; and difficulties experienced in complying with the rules on corruption. (...) This result pattern was identical for public officials and business employees alike, and as a consequence, for both sides of corrupt acts. The latter indicates that the same motives may not only underlie corruption in both private and public sectors, but also the act of corruption in its active and passive forms. The results of the current study do not provide strong support for the assumption that economic considerations—expected costs and benefits—are crucial in predicting corruption. Based on the findings that norms and the perceived opportunity to comply are dominant factors in explaining corruption, this article focuses on the practical implications for the development of anti-corruption strategies within both public and private sectors. (shrink)

Our paper draws attention to a neglected channel of corruption—the bribe payments by state-owned enterprises. This is an important phenomenon as bribe payments by SOEs fruitlessly waste national resources, compromising public welfare and national prosperity. Using a large dataset of 30,249 firms from 50 countries, we show that, in general, SOEs are less likely to pay bribes for achieving organizational objectives owing to their political connectivity. However, in deteriorated institutional environments, SOEs may be subjected to potential managerial rent-seeking behaviors, which (...) disproportionately increase SOE bribe propensity relative to privately owned enterprises. Specifically, our findings highlight the importance of fostering democracy and rule of law, reducing prevalence of corruption and shortening power distance in reducing the incidence of SOE bribery. (shrink)

This research investigates firms’ bribery motivations in China. Based on resource dependence theory and anomie theory, we identify resource conditions as firms’ proactive motivation to bribe and firms’ perceived institutional environment as their passive motivation to bribe. We use the data from 2002 World Business Environment Survey, collected by the World Bank, to investigate firms’ bribery in the world’s largest emerging market, China. We employ a multi-level logistic model to test our hypotheses. The results show that unsatisfactory general and task (...) environmental conditions may trigger firms to bribe in order to compete for better resources and opportunities; institutional conditions such as the security expenditure and anomie climate may make firms perceive bribery as a common phenomenon and thus induce firms to bribe. This research provides some insights to understand business bribery behaviors in emerging market. It also discusses some managerial implications and guidelines for policy-making from the findings. (shrink)

Many studies of bribery acknowledge the important role of bribe-givers, but their true motives remain unclear. We propose that the likelihood of bribery depends on the willingness of an organization to affiliate with local parties or to be successful in a host country, or to have power over local parties. We further argue that different opportunities, either pervasive or arbitrary, facilitate different types of motives that affect the likelihood of bribery. In addition, we investigate the effect of perceived fairness on (...) the likelihood of bribery. We employ a 3 (motives: affiliation vs. achievement vs. power) × 2 (opportunities: pervasiveness vs. arbitrariness) × 2 (perceived fairness: high vs. low) factorial design in experimental settings among Executive MBA students in southern Taiwan. Our findings indicate that, when companies perceive a higher level of distributive fairness, high-achieving organizations are more likely to offer a bribe when the condition is pervasive. When they have a powerful motive, arbitrariness engenders a higher likelihood of bribery. When they perceive less distributive fairness, there are no significant differences between motive and opportunity. (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)

While public (or government) corruption has attracted a lot of attention, private (or business) corruption has been relatively under-addressed. A specific form of corruption, namely, paying a bribe to a public official, is easily identifiable as unethical and possibly illegal, but this is not clear in a private business context. Yet private bribery also has serious organizational consequences. This exploratory study suggests that individuals have difficulty in recognizing the ethical connotations of potential bribery, and draws attention to the need to (...) build skills in this regard. (shrink)

Despite a strong sensitization to the corruption problem and a large body of interdisciplinary research, scientists have only rarely investigated which motivational, volitional, emotional, and cognitive components make decision makers in companies act corruptly. Thus, we examined how their interrelation leads to corruption by proposing an action model. We tested the model using a business simulation game with students as participants. Results of the PLS structural equation modeling showed that both an attitude and subjective norm favoring corruption led to a (...) desire to act corruptly. Given high perceived behavioral control, this desire was transformed into an intention that finally resulted in corrupt action. Components related to general private and professional goals did not allow for any prediction. Based on these results, we discuss preventative measures and methods for combating intra- and inter-organizational corruption. (shrink)

Corruption has been a major obstacle to economic growth around the world. In this paper, we examine how firms interact with corrupt government officials either to minimize the impact of corruption on their operations or to maximize their benefit of paying a bribe. Our estimates show that firms know exactly what they need and use their limited resources to bribe only relevant government authorities. In other words, firms are rational bribers who know exactly what they need and optimize their bribes (...) to fulfill that need. This type of intentional bribery could be reduced by enhanced institutional environments and improved openness of the economy. (shrink)

The purpose of this research is to extend prior research testing the premise that small deviations from ethical behavior lead to even larger deviations from ethical behavior. This study examines the association between a person’s willingness to bribe a police officer to avoid being issued a speeding ticket with their views on inappropriate behavior of corporate executives. Our sample of 528 participants comes from Colombia (90), Ecuador (70), South Africa (131) and the United States (237). As part of our data (...) gathering, we controlled for social desirability response bias in the responses of the students who participated in our study. Our data indicate significant differences between the views of the students from Colombia, Ecuador, and South Africa when compared to the views of the students from the United States. The analysis indicates that, for all four dilemmas, the most significant variable was the belief about how ethical it was to pay a bribe to avoid a traffic ticket. In addition, in three of our four dilemmas, Paulhus’ Impression Management Subscale, which measures social desirability response bias, was the second most significant variable. Finally, in three of the four dilemmas, the students from Colombia, Ecuador and South Africa thought the actions described in the dilemmas were less ethical than the students from the United States. (shrink)