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.

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.

Off-shoring is a business decision increasingly being considered as a strategic option to effect expected cost savings. This exploratory study focuses on the moral recognition of off-shoring using ethical decision making embedded within affective events theory. Perceived magnitude of consequences and time pressure are hypothesized as affective event characteristics that lead to decision makers’ empathy responses. Subsequently, cognitive and affective empathy influence the decision makers’ moral recognition. Decision makers’ prior knowledge of off-shoring was also predicted to interact with perceptions of (...) the affective event characteristics to influence cognitive and affective empathy. Findings from a limited sample of human resource management professionals suggest that perceptions of magnitude of consequences and cognitive empathy directly relate to moral recognition and that affective empathy partially mediates the relationship between perceptions of the magnitude of consequences and moral recognition. The three-way interaction of the perceptions of magnitude of consequences, time pressure, and prior knowledge of off-shoring was marginally related to cognitive empathy. Interpretations of the findings, validity issues, limitations, future research directions, and management implications are provided. (shrink)

Even though potential impacts of political and legal environments of business on ethical behavior of firms (EBOF) have been conceptually recognized, not much evidence (i.e., empirical work) has been produced to clarify their role. In this paper, using Bayesian causal maps (BCMs) methodology, relationships between legal and political environments of business and EBOF are investigated. The unique design of our study allows us to analyze these relationships based on the stages of development in 92 countries around the world. The EBOF (...) models structured through BCMs are used to explain how EBOF in a given country group are shaped by how managers perceive political, legislative, and protective environments of business in these countries. The results suggest that irregular payments and bribes are the most influential factors affecting managers’ perceptions of business ethics in relatively more advanced economies, whereas intellectual property protection is the most influential factor affecting managers’ perceptions of business ethics in less-advanced economies. The results also suggest that regardless of where the business is conducted in the world, judicial independence is the driving force behind managers’ perceptions of business ethics. In addition, the results of this study provide further support for scholars who argue that business ethics is likely to vary among countries based on their socio-economic factors. In addition to its managerial implications, the study provides directions for policy makers to improve the ethical conduct of businesses in their respective countries. (shrink)

Drawing on signaling theory, we suggest that a supplier’s enforcement of ethical codes sends signals about the supplier that affect a buyer’s decision to continue their commitment to the supplier. We then draw on side-bet theory to hypothesize how switching costs influence the importance of a supplier’s enforcement of ethical codes in predicting a buyer’s continuance commitment to a supplier. We empirically test our model with data from 158 purchasing managers across three manufacturing industries. Results confirm the connection between ethical (...) code enforcement and continuance commitment, but suggest that a supplier’s enforcement of ethical codes matter less when switching suppliers is perceived as too costly. (shrink)

Aristotle's doctrine of the mean states that a virtue is the mean state between two vices: a deficient and an excessive one. The Corporate Ethical Virtues Model defines the mean and the corresponding deficient vice for each of its seven virtues. This paper defines for each of these virtues the corresponding excessive vice and explores why organizations characterized by these excessive vices increase the likelihood that their employees will behave unethically. The excessive vices are patronization, pompousness, lavishness, zealotry, overexposure, talkativeness, (...) and oppressiveness. (shrink)

Media increasingly accuse firms of exploiting suppliers, and these allegations often result in lurid headlines that threaten the reputations and therefore business successes of these firms. Neither has the phenomenon of supplier exploitation been investigated from a rigorous, ethical standpoint, nor have answers been provided regarding why some firms pursue exploitative approaches. By systemically contrasting economic liberalism and just prices as two divergent perspectives on supplier exploitation, we introduce a distinction of common business practice and unethical supplier exploitation. Since supplier (...) exploitation is based on power, we elucidate several levels of power as antecedents and investigate the role of ethical climate as a moderator. This study extends Victor and Cullen’s ethical climate matrix according to a supply chain dimension and is summarized in an integrated, conceptual model of five propositions for future theory testing. Results provide a frame of reference for executives and scholars, who can now delineate unethical exploitation and understand important antecedents of the phenomenon better. (shrink)

The relationship between ethical ideology and job stress appears to be complex. This study is based on a model presented by Forsyth (Journal of Personality and Social Psychology 39:175, 1980), showing two dimensions (idealism and relativism) that play an important role in ethical evaluation and behavior. Based on a survey of 561 employees of hotel industry in India, ethical ideologies were found to be negatively associated with job stress. The data were analyzed using Pearson correlations and multiple regressions. The result (...) showed that relativism is negatively correlated with job stress. Further, it has been established that idealism and relativism interacted in such a way that there is a negative relationship between idealism and job stress when relativism is low and positive relationship when relativism is high. The findings imply that ethical ideology adversely influences the job stress in the organization. (shrink)

ABSTRACT:Despite sustained attention to ethical leadership in organizations, scholarship remains largely descriptive. This study employs an empirical approach to examine the consequences of ethical leadership on leader promotability. From a sample of ninety-six managers from two independent organizations, we found that ethical leaders were increasingly likely to be rated by their superior as exhibiting potential to reach senior leadership positions. However, leaders who displayed increased ethical leadership were no more likely to be viewed as promotable in the near-term compared to (...) those who displayed less ethical leadership. Our findings also show ethical culture and pressure to achieve results are important contextual factors that moderate the relationships between ethical leadership and leader promotability to senior leadership roles. (shrink)

In contrast to the recent rise to economic importance of offshore finance centres (OFCs), the topic of taxation has so far created little interest among scholars of corporate social responsibility (CSR). This paper makes two contributions to addressing this lacuna. Applying a range of influential normative theories of ethics, it first offers an ethical evaluation of tax havens. Second, the paper examines what use large firms that are headquartered in two OFCs—Bermuda and the Cayman Islands—make of formal CSR tools. The (...) emerging duplicity in tax havenbased companies professing social responsibility highlights once more the political nature of CSR, where at least some firms and/or industries can successfully limit government power to enact regulation as well as shape the discourse around CSR. The study of CSR in OFC-based firms thus calls into question the usefulness of the often quoted definition of CSR as going beyond the law. (shrink)

Individuals often lie for psychological rewards (e.g., preserving self image and/or protecting others), absent economic rewards. We conducted a laboratory experiment, using a modified dictator game, to identify conditions that entice individuals to lie solely for psychological rewards. We argue that such lies can provide a ready means for individuals to manage others’ impression of them. We investigated the effect of social distance (the perceived familiarity, intimacy, or psychological proximity between two parties) and knowledge of circumstances (whether parties have common (...) or asymmetric information) on the frequency of lying. We found that lying occurs more frequently when social distance is near and that the effect is exacerbated when information is asymmetric. Our theoretical development suggests that, under these conditions, individuals’ need to manage others’ impression is magnified. We discuss the implications of our findings. (shrink)

The purpose of this study is to present a rigorous, focused review on how this field of ethical sourcing research has grown and evolved over the decades, providing implications for future research. We combine two research methodologies in this study: a systematic literature review and a citation network analysis. The former is used as a scientific tool to select the most relevant ethical sourcing articles, while the latter is then applied as a research technique to analyse these selected articles. Such (...) a combined approach allows for a rigorous investigation into this field of research in a more scientific and objective way. Based on this approach, we identify distinctive features of ethical sourcing studies such as growth trends and content issues; important articles that have played a significant role in developing this field; evolutionary paths that show how its knowledge has been created and transferred; emerging trends that have received growing attention in the recent literature; main research areas that underlie the entire ethical sourcing studies; and major implications that need to be pursued in future research. The results of this study provide not only the current status of the literature but also the patterns of evolution in this field of research, thus contributing to the existing literature. (shrink)

The study of ethical behavior and ethical decision making is of increasing importance in many fields, and there is a growing literature addressing the issue. However, research examining differences in ethical decision making across fields and levels of experience is limited. In the present study, biases that undermine ethical decision making and compensatory strategies that may aid ethical decision making were identified in a series of interviews with 63 faculty members across six academic fields and three levels of rank as (...) well as across gender. The degree to which certain biases and compensatory strategies were used in justifications for responses to ethical situations was compared across fields, level of experience, and gender. Major differences were found across fields for several biases and compensatory strategies, including biases and compensatory strategies related to use of professional field principles and field-specific guidelines. Furthermore, full professors tend to differ greatly from assistant and associate professors on a number of constructs, and there were differences in the consistency with which biases and compensatory strategies were displayed within these various groups. Implications of these findings for ethics training and future research are discussed. (shrink)

Ethical decision making involves complex emotional, cognitive, social, and philosophical challenges. Even if someone wants to be ethical, he or she may not have clearly articulated what that means, or know how to go about making a decision consistent with his or her values. Information technology may be able to help. A decision support system could offer individuals and groups some guidance, assisting them in making a decision that reflects their underlying values. The first step towards a design science of (...) ethical decision support is to develop a theoretical base on which first-generation systems can be built. This paper brings together work in cognitive, social and moral psychology, information systems, and philosophy relevant to ethical decision making. Attributes of a system that would support ethical decision making are described. (shrink)

The government purchasing market constitutes the largest business sector in the world. While marketers would benefit from a deep understanding of both sectors, how the two sectors differ in terms of ethics and strategy largely remains unknown. The purpose of this research, therefore, is to explore differences between the for-profit and not-for-profit sectors on two critical aspects of business-to-business procurement: ethics and strategy. Using survey data from a sample of 328 procurement professionals in the for-profit and not-for-profit sectors, key differences (...) are explored. Findings suggest that buyers in the for-profit sector are more likely to behave opportunistically. Conversely, the buyers’ leaders in the not-for-profit sector behave more opportunistically and are more willing to turn a blind eye to their subordinate buyers’ opportunistic behaviors. In addition, key differences in procurement strategy are unveiled suggesting that not-for-profit procurement practices have some room for improvement. Based on the findings, theoretical and managerial implications are drawn, and a future research agenda is proposed. (shrink)

Differences across fields and experience levels are frequently considered in discussions of ethical decision making and ethical behavior. In the present study, doctoral students in the health, biological, and social sciences completed measures of ethical decision making. The effects of field and level of experience with respect to ethical decision making, metacognitive reasoning strategies, social-behavioral responses, and exposure to unethical events were examined. Social and biological scientists performed better than health scientists with respect to ethical decision making. Furthermore, the ethical (...) decision making of health science students decreased as experience increased. Moreover, these effects appeared to be linked to the specific strategies underlying participants' ethical decision making. The implications of these findings for ethical decision making are discussed. (shrink)

Ethics is central to leadership because of the impact leaders have on establishing organizational values and engaging followers to accomplish mutual goals. The ethical concerns of leaders may influence ethical decision-making of their followers. This paper attempts to investigate the relationship between leaders and followers on moral judgment, and make a comparison between China and Taiwan on the leader–follower moral judgment relationship. Data were collected through a questionnaire survey on purchasing professionals in China and Taiwan. The development of moral judgment (...) was measured using the defining issues test. Research findings indicate that followers exhibit higher level of moral judgment while their leaders have higher level of moral judgment. A positive moral judgment relationship exists between leaders and followers. The comparative study between China and Taiwan reveals that Chinese purchasing professionals are more easily influenced by their workplace leaders than their Taiwanese counterparts. Power distance would strengthen the leader–follower moral judgment relationship. The present research makes contributions toward the ethics literature by providing empirical insight into the relationship between leader moral judgment and follower moral judgment. This paper also suggests implications and opportunities for future research. (shrink)

This study examines unethical purchasing practices from the perspective of buyer–supplier relationships. Based on a review of the inter-organizational literature and qualitative data from in-depth interviews with purchase managers from diverse industries, a conceptual framework is proposed, and theoretical arguments leading to propositions are presented. Taking into consideration the presence or absence of an explicit or implicit company policy sanctioning ethically questionable activities, unethical purchasing practices are conceptualized as a three-tiered set. Three broad themes emerge from the analysis toward explaining (...) purchasing ethics from a buyer–seller perspective: Inter-organizational power issues, Inter-organizational relational issues, and Interpersonal relational issues. Theoretical and managerial implications of the conceptual framework are discussed. (shrink)

In this article, cluster analysis is used to explore the conflicting results reported when the Defining Issues Test is used to explain moral reasoning ability in business situations. Using a convenience sample, gender, age, work experience, and ethics training were examined to determine their impact on the level of moral reasoning ability as measured by the Defining Issues Test. Using the whole sample, a significant difference was found for average P scores reported for males and females, but no significant differences (...) were found based on age, work experience, and ethics training. However, the sample fell into distinct clusters that identified distinct male and female groupings. While females naturally fell into two distinct high- and low-moral reasoning ability clusters, male clusters were dominated more by work experience and ethics training. Clearly there are other factors mitigating the level of moral reasoning ability for males which require further exploration. The findings suggest that while the P score provides an initial point of comparison, the real benefit to the test is in exploring what is different for males and females in terms of training needs, and the impact of work experience on the moral reasoning ability, and most importantly, how to make ethics training enticing. Recommendations for future research are also discussed. (shrink)

In this research, we examine the effects that customer perceptions of employee deception have on the customers’ attitudes toward an organization. Based on interview, archival, and observational data within the international airline industry, we develop a model to explain the complex effects of perceived dishonesty on observer’s attitudes and intentions toward the airline. The data revealed three types of perceived deceit (about beliefs, intentions, and emotions) and three additional factors that influence customer intentions and attitudes: the players involved, the beneficiaries (...) of the deceit, and the harm done by the perceived lie. We develop a model with specific propositions to guide organizations with respect to apparently deceitful behavior of their employees. Implications and directions for future research are provided, focusing on the question of whether organizations should consistently encourage honesty or train their employees to be effective liars. (shrink)