Researchers have used attribution theory as a basis for exploring the relationship between consumers'' inferences of advertiser motivation (attributions) and advertising response. This study postulated the existence of two new types of attributions which relate to the perceived ethics of the advertiser (advertiser ethical attributions) and the advertising message (message ethical attributions). Research conducted among a nationally representative sample of 273 adults: (1) verified the existence of both advertiser and message ethical attributions, (2) demonstrated the independence of advertiser and message (...) ethical attributions both from each other and from other measures of advertiser and message evaluation, (3) identified the specific advertising characteristics which lead to the formation of each type of ethical attribution and (4) demonstrated a significant relationship between advertiser and message ethical attributions and measures of advertising response. (shrink)

All of finance is now automated, most notably high frequency trading. This paper examines the ethical implications of this fact. As automation is an interdisciplinary endeavor, we argue that the interfaces between the respective disciplines can lead to conflicting ethical perspectives; we also argue that existing disciplinary standards do not pay enough attention to the ethical problems automation generates. Conflicting perspectives undermine the protection those who rely on trading should have. Ethics in finance can be expanded to include organizational and (...) industry-wide responsibilities to external market participants and society. As a starting point, quality management techniques can provide a foundation for a new cross-disciplinary ethical standard in the age of automation. (shrink)

All of finance is now automated, most notably high frequency trading. This paper examines the ethical implications of this fact. As automation is an interdisciplinary endeavor, we argue that the interfaces between the respective disciplines can lead to conflicting ethical perspectives; we also argue that existing disciplinary standards do not pay enough attention to the ethical problems automation generates. Conflicting perspectives undermine the protection those who rely on trading should have. Ethics in finance can be expanded to include organizational and (...) industry-wide responsibilities to external market participants and society. As a starting point, quality management techniques can provide a foundation for a new cross-disciplinary ethical standard in the age of automation. (shrink)

How leaders and managers respond to not knowing is highly relevant given the complex, ambiguous, and chaotic business environment of the twenty-first century. Drawing on the literature from a variety of disciplines, the paper explores the dominant, unfavorable conceptualization of not knowing. The authors present some potential ethical implications of a negative view of not knowing and suggest how organizations would benefit from identifying any unhelpful aspects of the culture that may encourage unethical, undesirable, and/or hasty actions in situations of (...) not knowing. The paper specifically illustrates how patience, courage, honesty, integrity, and humility are integral to negative capability in the contexts of not knowing. Finally, the paper calls for deeper inquiry into the role of virtue ethics in preparing managers and leaders for not knowing and urges organizations to embrace negative capability in not knowing rather than engaging in damaging delusion. (shrink)

. This paper presents the findings of two surveys conducted in April 2003 of Chartered Life Underwriters (CLUs) and Chartered Financial Consultants (ChFCs) who are members of the Society of Financial Service Professionals. The first survey of 3000 CLUs and ChFCs – the life insurance industry’s most highly regarded professionals – was aimed at identifying the key ethical issues faced by professionals working in the life insurance industry today. A comparison of these findings with those of earlier studies conducted in (...) 1990 and 1995 suggests that while the key ethical issues facing those working in the life insurance business today are essentially the same as those encountered during industry’s highly troubled ethical environment of the early 1990s, these issues are perceived as presenting somewhat less serious problems than in the past. The second survey of 3000 CLUs and ChFCs was aimed at determining the extent to which these professionals perceive the industry created Insurance Marketplace Standards Association (IMSA) as having contributed to any change in the ethical environment that has taken place. The findings suggest that IMSA has played an important role in influencing senior managers to more strongly encourage and support ethical market conduct, a critical step in improving the industry’s ethical environment. (shrink)

In 1999, the Journal of Business Ethics published its 1 500th article. This article commemorates the journal's quest "to improve the human condition" (Michalos, 1988, p. 1) with a summary and assessment of the first eighteen volumes. The first part provides an overview of JBE, highlighting the journal's growth, types of methodologies published, and the breadth of the field. The second part provides a detailed account of the quantitative research findings. Major research topics include (1) prevalence of ethical behavior, (2) (...) ethical sensitivities, (3) ethics codes and programs, (4) corporate social performance and policies, (5) human resource practices and policies, and (6) professions – accounting, marketing/sales, and finance/strategy. Much remains to be done. (shrink)

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)

The objective of this paper is to examine the ‘Code of Ethics Quality’ (CEQ) in the largest companies of Australia, Canada and the United States. For this purpose, a proposed CEQ construct has been applied. It appears from the empirical findings that while Australia, Canada and the United States are extremely similar in their economic and social development, there may well be distinct cultural mores and issues that are forming their business ethics practices. A research implication derived from the performed (...) research is that the construct provides a selection of observable and measurable elements in the context of CEQ. The construct of CEQ consists of nine measures divided into two dimensions (i.e. staff support and regulation). They should not be seen as a complete list. On the contrary, it is encouraged that others propose and elaborate revisions and extensions. A practical implication of this paper is a structure of what and how to examine the CEQ in a managerial setting. It may assist companies in their efforts to establish, maintain and improve their ethical culture, norms and beliefs within the organization and supporting them in their ethical business practices with different stakeholders in the marketplace and society. The dimensions and measures of the construct may be used as a frame of reference for further research. They may be useful and applicable across contexts and over time using similar samples when it comes to large companies, as small‐ or medium‐sized ones may not have considered all areas nor have the elements in place. This is a research limitation, but it provides an opportunity for further research. (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.

Ethics in public administration has been a subject of growing interest for both researchers and practitioners interested in the future of governance. This study examined the relationship between ethics and performance in local governance. We tested the effects over time of an ethics program on employees' perceptions (awareness of the code of ethics, ethical leadership, inclusion of employees in ethical decision making [EDM], ethical climate [EC], organizational commitment, and quality of work life [QWL]) and behavior (organizational citizenship behavior) in one (...) Israeli regional council. We conducted a longitudinal study of 108 employees, using data from a two-phase survey (before implementation of the ethics program and a year after) and objective assessments of employees' behavior through managers' evaluations. The main findings show that the ethics program was very effective, resulting in greater awareness of the code of ethics, increased inclusion of employees in EDM, and an improved EC. Furthermore, ethical leadership was positively related to employees' awareness of the code of ethics, increased inclusion of employees in EDM, an improvement in the EC, greater organizational commitment, and higher QWL. Implications and suggestions for future studies are discussed. (shrink)

Ethical attitudes and behaviour are complex. This complexity extends to the influencers operating at different levels both outside and within the organisation, and in different combinations for different individuals. There is hence a growing need to understand the proximal and distal influencers of ethical attitudes, and how these operate in concert at the individual, organisational, and societal levels. Few studies have attempted to combine these main research streams and systematically examine their combined impact. The minority of studies that have taken (...) a combined approach have often done so using conventional statistical and analytical techniques which imply linearity between variables—a situation that rarely exists in business settings and is likely to lead to simplistic or even erroneous conclusions. Applying a fuzzy-set qualitative comparative analysis approach, this paper reports on the mutual and simultaneous influence of individual demographic factors, as well as proximal and distal factors stemming from within and outside the work environment to understand individuals’ ethical views within the workplace. The multiple configurations that emerged reveal the complex nature of influencers of ethical attitudes, and reinforce the view that “one size does not fit all”. We discuss these implications together with managerial recommendations and future research directions. (shrink)

The growing interest in Africa as well as concerns about negative deviant behaviors and ethnic structures necessitates examination of the effect of ethnic expectations on behavior of employees. In this study we leverage insight from ethnos oblige theory to propose that centralization of ethnic norms moderates the relationship between benevolence expectations and negative deviant behavior. Using a cross-sectional design and data from two countries as well as moderation and cross-cultural analytic techniques, we find support for three-way interactions where the relationship (...) between benevolence and negative deviant behavior is moderated by centralization and culture. We discuss the implications of the findings which support the dynamic perspective of management in Africa. (shrink)

This paper aims to examine the impact of national cultural values on the relation between auditing and reporting standards and ethical behaviours of firms. Based on a regression analysis using data regarding 54 countries between the years 2007 and 2012, we found that the impact of the perceived strength of auditing and reporting standards on the perceived ethical behaviours of firms is accentuated when a society is characterized by low power distance and in-group collectivism, and high institutional collectivism, future orientation (...) and uncertainty avoidance. Empirically, the study addresses a gap in the literature by highlighting the influence of national culture on the effectiveness of legal settings and regulations on ethical behaviours. (shrink)

Current organizations are underpinned by utilitarian ethics of Modernity. Pure economic motive driven organizations detach themselves from larger societal interest. Rising number of corporate scandals and intraorganizational income inequalities are breeding similar trends in society at large. Current organizations base their competitive advantage on resources and capabilities which boils down to economic supremacy at all cost whether it is named I/o or RBV of the firm. This theoretical article posits Ethics-based Trust as the main competency and capability for attaining sustained (...) competitive advantage. It in no way condemns utility view of the firms but treats it as a natural yet secondary outcome of genuine ethicality of the firm. Cultivating an ethical culture in the firm through identifying antecedents, organizational practices, and the outcomes where profitability is an automatic but secondary outcome under the supremacy of ethics is detailed in the multilevel model presented in this article. The main call of this article is to posit ethics and morality over and above short-term profits so that organizations fulfill their trustee role for society through enacting socio-humanistic theories within organizations. A brief analysis of the proposed ethical theory of firm is undertaken in light of the “schooling” notion in the contemporary organization theory literature. (shrink)

A vision of a living code of ethics is proposed to counter the emphasis on negative phenomena in the study of organizational ethics. The living code results from the harmonious interaction of authentic leadership, five key organizational processes (attraction–selection–attrition, socialization, reward systems, decision-making and organizational learning), and an ethical organizational culture (characterized by heightened levels of ethical awareness and a positive climate regarding ethics). The living code is the cognitive, affective, and behavioral manifestation of an ethical organizational identity. We draw (...) on business ethics literature, positive organizational scholarship, and management literature to outline the elements of positive ethical organizations as those exemplary organizations consistently practicing the highest levels of organizational ethics. In a positive ethical organization, the right thing to do is the only thing to do. (shrink)

Previous work suggests that gender attitudes are associated with different individual and organizational factors. At the same time, ethics research suggests that many of these same variables can influence ethical reasoning in companies. In this study, we sought to combine these streams of research to investigate whether individual skepticism of women’s employment is related to ethical reasoning in a gender-based ethical situation. The results of the hierarchical regression analysis indicated that skepticism of women’s employment was negatively related to the recognition (...) that the gender-based dilemma involved an ethical problem, and that skepticism was also negatively related to judgments that the situation was unethical. These findings imply that companies should advance policies that increase tolerance for women’s employment, such as diversity training codes of conduct, and ethics training. (shrink)

The purpose of this study was to determine the degree to which the review of corporate ethics codes is associated with individuals’ perceptions of the importance of virtue ethics, or more specifically, employee incorruptibility. A convenience sample of individuals working for a university or one of several business organizations located in the Mountain West region of the United States was compiled with a self-report questionnaire. A usable sample of 143 persons representing both the public and private industries was secured for (...) use in this study. The results of an analysis of covariance showed that reviewing ethics codes during employee orientation was positively related to individuals’ beliefs that incorruptibility is an important individual virtue. The managerial implications of the findings are discussed along with suggestions for future research. (shrink)

This study explores the ability of career satisfaction to mediate the relationship between corporate ethical values and altruism. Using a sample of individuals employed in a four-campus, regional health science center, it was determined that individual career satisfaction fully mediated the positive relationship between perceptions of corporate ethical values and self-reported altruism. The findings imply that companies dedicating attention to positive corporate ethical values can enhance employee attitudes and altruistic behaviors, especially when individuals experience a high degree of career satisfaction.

This research investigates the efficacy of business ethics intervention, tests a theoretical model that the love of money is directly or indirectly related to propensity to engage in unethical behavior (PUB), and treats college major (business vs. psychology) and gender (male vs. female) as moderators in multi-group analyses. Results suggested that business students who received business ethics intervention significantly changed their conceptions of unethical behavior and reduced their propensity to engage in theft; while psychology students without intervention had no such (...) changes. Therefore, ethics training had some impacts on business students' learning and education (intelligence). For our theoretical model, results of the whole sample (N = 298) revealed that Machiavellianism (measured at Time 1) was a mediator of the relationship between the love of money (measured at Time 1) and unethical behavior (measured at Time 2) (the Love of Money → Machiavellianism → Unethical Behavior). Further, this mediating effect existed for business students (n = 198) but not for psychology students (n = 100), for male students (n = 165) but not for female students (n = 133), and for male business students (n = 128) but not for female business students (n = 70). Moreover, when examined alone, the direct effect (the Love of Money → Unethical Behavior) existed for business students but not for psychology students. We concluded that a short business ethics intervention may have no impact on the issue of virtue (wisdom). (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)

Based on the 'Partnership Model of Corporate Ethics' (Wood, 2002), this study examines the ethical structures and processes that are put in place by organizations to enhance the ethical business behavior of staff. The study examines the use of these structures and processes amongst the top companies in the three countries of Australia, Canada, and Sweden over two time periods (2001–2002 and 2005–2006). Subsequendy, a combined comparative and longitudinal approach is applied in the study, which we contend is a unique (...) approach in the area of business ethics. The findings of the study indicate that corporations operating in Sweden have utilized ethical structures and processes differently than their Canadian and/or Australian counterparts, and that in each culture the way that companies fashion their approach to business ethics appears congruent with their national cultural values. There does, however, appear to be a convergence of views within the organizations of each culture, as the Swedish companies appear to have been more influenced in 2005–2006 by an Anglo-Saxon business paradigm than they have been in the past. (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)

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)

An important area of business ethics research focuses on how otherwise normal and law-abiding individuals can engage in acts of corruption. Key in this literature is the concept of rationalization. This is where individuals attempt to justify past and future corrupt deeds to themselves and others. In this article, we argue that rationalization often entails a process of overcompensation whereby the justification forwarded is excessive in relation to the actual act. Such over-rationalization provides an impetus for further and more serious (...) acts of illegality. Using a number of high profile cases, it is argued that this dynamic gap between the act and excessive rationalization can explain why corruption often escalates in severity and scope in the organization. (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)

In this paper, we discuss the largely neglected topic of semantics in medicine and the associated ethical issues. We analyse several key medical terms from the informed perspective of the healthcare professional, the lay perspective of the patient and the patient’s family, and the descriptive perspective of what the term actually signifies objectively. The choice of a particular medical term may deliver different meanings when viewed from these differing perspectives. Consequently, several ethical issues may arise. Technical terms that are not (...) commonly understood by lay people may be used by physicians, consciously or not, and may obscure the understanding of the situation by lay people. The choice of particular medical terms may be accidental use of jargon, an attempt to ease the communication of psychologically difficult information, or an attempt to justify a preferred course of action and/or to manipulate the decision-making process. (shrink)

We present this special issue on positive organizational ethics (POE) to highlight those pursuing positive subjective experiences, positive attributes of individuals and groups, and positive practices that contribute to ethical and virtuous behavior in organizations. Although prior research has offered some insight in this area, there is still much to be learned about how to cultivate and sustain ethical strength in different types of organizations and how goodness can emerge from and in spite of human failings. After describing the positive (...) movement, we position POE as a discrete area of inquiry within the broader positive behavioral sciences, at the intersection of positive behavioral studies and business ethics. After defining our terms and purpose for creating the POE domain, we introduce the articles in this special issue. The introduction concludes with suggested topics for future research. (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)

This paper integrates the inclusion and organizational ethics literatures to examine the relationship between employees’ perceptions of an organizational integration and learning approach to diversity and two employee outcomes: organizational citizenship behavior toward the organization and interpersonal workplace deviance. Findings across two field studies from the USA and Germany show that employees’ perceptions of an organizational integration and learning approach to diversity are positively related to perceived organizational ethical virtue. Perceived organizational ethical virtue further transmits the effect of employees’ perceptions (...) of an organizational integration and learning approach to diversity on both organizational citizenship behavior toward the organization and interpersonal workplace deviance. In addition, we find support for a moderated indirect effect model whereby the indirect effect of the perceived integration and learning approach to diversity on the dependent variables through perceived organizational ethical virtue is stronger when employees have high personal value for diversity rather than low personal value for diversity. These results underscore the importance of having a fit between employees’ perceptions of an organization’s approach to diversity and employees’ personal value for diversity in order for inclusion to result in positive employee behaviors. Results emphasize the ethical responsibility of organizations in terms of how they approach diversity. (shrink)

Society is increasing its demands for more ethical behaviour by managers of organizations. However, societal and workplace ethical attitudes are constantly evolving as generational differences and demographic diversity make the workplace more complex. While a number of studies have attempted to classify ethical attitudes into different categories, more work in this area is needed. This paper reports on a study that examined attitudes towards the acceptability of workplace behaviour that might be considered unethical. Graduate business students at an Australian university (...) were asked to indicate the ethicality of 17 different behaviours, drawn from the business ethics literature. Exploratory factor analysis identified distinct factors, consisting of misuse of company resources, self-serving deceit, and the giving or receiving favours for personal gain. The derived factor structure was then tested with confirmatory factor analysis. Descriptive statistics indicated that misuse was considered less unethical than exchanging favours for personal gain. Deceit was considered the most unethical type of behaviour. Implications for managers and directions for further research are discussed. (shrink)

There is a need of further research to understand how social capital in the organization can be fostered. Existing literature focuses on the design of reciprocity norms, procedures and stability employment practices as the main levers of social capital in the workplace. Complementary to these mechanisms, this paper explores the impact of ethical managerial behaviour on the development of social capital. We argue that a managerial behaviour based on the true concern for the well-being of employees, as well as their (...) motivational and ethical development, can be particularly important for the generation of social capital in the organization. It is suggested that manager's behaviour should be based on three principles: following examplary behaviour, helping the employees to value the consequences of their actions in other persons, and not betraying employee's trust. When the manager conforms to those principles, he can ease the process through which employees develop associability and identification-based trust with the firm, the two main components of 'Organizational Social Capital'. Bringing ethics into the debate of social capital creation seems to us fundamental, as social capital in the firm is likely to be influenced by the ethical and motivational development of its members. (shrink)

Ethics has recently gained prominence in debates surrounding social capital creation. Despite the significant theoretical progress in this field, it still lacks empirical research. The goal of this study is to empirically explore the ethical leadership of supervisors as an antecedent of the firm’s social capital. We build on social learning theory to argue that employees can learn standards of appropriate behavior by observing the behavior of role models. By displaying and enforcing ethical behavior, supervisors can facilitate the process through (...) which employees learn to feel empathy toward others and establish profound affective relationships with them. Data were collected from 408 Spanish, French, and Portuguese part-time MBA students. Using structural equation modeling techniques, we show that the ethical leadership of supervisors exerts a significant influence on the structural, relational, and cognitive dimensions of social capital. (shrink)

There is a need for further research to understand how social capital in the workplace can be promoted. This article studies the generation of social capital from a comprehensive perspective that integrates ethics and general management. We propose the concept of “ethical work context” as an influential antecedent of the social capital in the firm. The ethical work context, which is aligned with the “humanizing culture” approach proposed by Melé ( Journal of Business Ethics 45 (1), 3–14, 2003a ), allows (...) a broader comprehension of the concrete management practices and organizational dynamics that generate organizational social capital. It is argued that social capital, understood as a by-product of the ethical work context, results both from organizational design and ongoing managerial activity. Creating an ethical work context brings ethics and social capital into the realm of the general manager; a figure that has remained absent from the social capital literature. (shrink)

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)

A survey was conducted of the perceived correlates of illegal abuses in the electronics industry. Human resource directors of thirty-one firms responded to a questionnaire which assessed their perceptions of the degree to which illegal behavior was caused by (1) deficiencies in the moral character of employees (2) the clarity of expectations and standards describing illegal behavior and (3) the presence of reinforcements and punishments contingent on these behaviors. All three variables were related to the frequency of abuses in three (...) areas of organizational crime (e.g. administrative, labor, environment) and three areas of personal crime (theft, falsifying records kickbacks) as reported by the directors and/or indicated by archival records. The implications of these findings are discussed in terms of how organizations may reduce illegal activity. (shrink)

Drawing on the theoretical insights from the resource-based view of the firm, this paper explores how human resource systems may contribute to competitive advantage by facilitating the development and maintenance of five types of ethical climates, and conversely, how HR systems may hinder competitive advantage by inhibiting the development and maintenance of these climate types. In so doing, this paper contributes to the literature by highlighting the resource worthiness of a firm's ethical climates and showing how HR systems may influence (...) that value. In addition, it advances theory that underpins the concept of competitive advantage sustainability and provides a platform for future empirical research. (shrink)

An important factor that leads governments to engage in public service contracts with nonprofit organizations is the belief that they share similar ethical and value orientations that will allow governments to reduce monitoring costs. However the notion of the existence of similarities in ethical climate has not been systematically examined. The purpose of this paper is to investigate the ethical climate in government and nonprofit sectors and to determine the extent to which similarities (and differences) exist in ethical climate dimensions. (...) Using survey data and structural equation modeling technique, the factor structure equivalence and measurement invariance of the ethical climate in the two sectors are tested. Results indicate that while there is a significant overlap in shared perception of ethical climate dimensions, there are also key differences between the two sectors. The outcome of this research provides important preliminary insights for public policy makers in government to better understand the implications of using the nonprofit sector for service delivery. (shrink)

The rise of ethical scandals in the business world urged corporations to allocate time and resources to emphasize the ethical behavior of their managers and employees. The Model of Ethical Behavior in this article has three main assumptions: (1) the institutionalization of a Compliance and Ethics Program Model is done in terms of just two components: one Explicit and the other Implicit, (2) both components have a significant and direct influence over the ethical behavior of employees, which is represented in (...) the model by two variables: Value Consistency and Presence of Ethical Conflicts, and (3) proper ethical behavior is perceived by employees to have a positive impact over the economic results of the firm. Reliable scales are developed to measure all these variables from the data collected by the "Barómetro de Valores y Ética Empresarial © ," a survey applied in 2009 to 12,321 employees from 54 Chilean corporations. The empirical analysis showed that there are three very distinctive components in the Presence of Ethical Conflicts variable: (1) what the company does that affects the employee, (2) what the company does that affects other people, and (3) what the employee does that affects the company. Finally, the Explicit and Implicit components of a Compliance and Ethics Program are shown to have a significant and positive impact over: (1) Value Consistency in employees* behavior; (2) the Presence of Ethical Conflicts in organizations; and (3) the perceived importance of ethics as a key factor to improve economic performance. (shrink)

Business ethics has gained much attention over the past decade in both work and educational settings. This study used a version of Lysonski and Gaidis' ethical vignettes to examine by gender the ethical views of 165 Canadian undergraduate management students, to examine the psychometric properties and construct validity of the instrument, and to determine if the instrument is a useful tool for introducing undergraduates to the topic of ethics in management practice. Results showed that while the instrument is a useful (...) teaching tool, it has psychometric and validity inadequacies that need to be corrected. (shrink)

In this paper, we develop a conceptual framework of the intra-firm transfer of best practices in moral reasoning by integrating three streams of literature: internal knowledge transfer in strategic management, moral reasoning and epistemology in philosophy and business ethics, and leader–member exchange in human resource management. We propose that characteristics of moral reasoning (nature of moral knowledge, tacitness of moral reasoning and causal ambiguity), source characteristics (moral development of leaders), target characteristics (integrity capacity and moral development of subordinates), leader–member exchange (...) and internal ethical climate influence the transfer of best practices in moral reasoning. (shrink)

Although Fair Trade has recently experienced rapid growth around the world, there is lack of consumer research that investigates what determines consumers' loyalty toward Fair Trade brands. In this research, we investigate how ethical consumption values (ECV) and two mediating variables, Fair Trade product beliefs (FTPB) and Fair Trade corporate evaluation, (FTCE) determine Fair Trade brand loyalty (FTBL). On the basis of two empirical studies that use samples from the U.S. and Korea, we provide evidence demonstrating that the manner in (...) which ECV influence FTBL differs in the U.S. and Korea. In the U.S., ECV determine FTBL only indirectly via FTPB, whereas in Korea they determine FTBL directly as well as indirectly via FTCE. We discuss theoretical and managerial implications of these findings. (shrink)

Previous accounting ethics research berates auditors for ethical lapses that contribute to the failure of Andersen (e.g., Duska, R.: 2005, Journal of Business Ethics 57, 17–29; Staubus, G.: 2005, Journal of Business Ethics 57, 5–15; however, some of the blame must also fall on regulatory and professional bodies that exist to mitigate auditors’ ethical lapses. In this paper, we consider the ethical and economic context that existed and facilitated Andersen’s failure. Our analysis is grounded in Akerlof’s (1970, Quarterly Journal of (...) Economics August, 488–500) Theory of the Market for Lemons and we characterize the market for audit reports as a market for lemons. Consistent with Akerlof’s model, we consider the appropriateness of the countervailing mechanisms that existed at the time of Andersen’s demise that appeared to have effectively failed in counteracting Andersen’s ethical shortcomings. Finally, we assess the appropriateness of the remedies proposed by the Sarbanes–Oxley Act of 2002 (SOA) to ensure that similar ethical lapses will not occur in the future. Our analysis indicates that the SOA regulatory reforms should counteract some of the necessary conditions of the Lemons Model, and thereby mitigate the likelihood of audit failures. However, we contend that the effectiveness of the SOA critically depends upon the focus and attention of the␣Public Companies Accounting Oversight Board (PCAOB) towards assessing the ethical climates of public accounting firms. Assessments by the PCAOB of public accounting firm’s ethical climate are needed to sufficiently ensure that public accounting firms effectively promote and maintain audit quality in situations where unconscious bias or economic incentives may erode the public accounting firm’s independence. (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)

This study examines how our personal values influence our judgment of the morality of some workplace behaviours. Sixty-nine undergraduates were asked to rank order separately Rokeach''s instrumental and terminal values in terms of their importance as guiding principles in their life. Subjects then read four scenarios, each of which described ethically questionable behaviour of the sort that might be encountered in business. They were then asked to rate whether or not the behaviour of the person described in the scenario was (...) ethical, and whether or not they had any intentions to rectify the situation. People with different value hierarchies perceived the targeted behaviours differently. For example, subjects who valued honesty perceived the behaviour as more immoral than subjects who did not value honesty. While the ranking of the instrumental valuehonesty was the best predictor of people''s judgments about the morality of the behaviour, their ranking of the instrumental valueambition was the best predictor of their behavioural intentions. (shrink)

Organizational culture and employee conduct in financial institutions are coming under increasing scrutiny by regulators who seek to identify the underlying sources of unethical behavior. The literature on ethics in the workplace has often emphasized the importance of the alignment of systems and processes with organizational values and the role of the leader in creating an ethical culture. Less is known about how individual employees experience the ethical decision-making process, especially in complex and high-risk business environments where there are discrepancies (...) between an organization’s formal ethical standards and its informal practices. This article combines ethical decision-making models with key concepts from organization and adult learning theories to develop a deeper and more nuanced view of how individuals in financial institutions deal with ethical issues that arise in their daily work. Eight practical ideas are formulated to help financial institutions narrow the gap between formal ethical standards and actual practices and develop a culture that promotes ethical behavior: challenging authority, creating opportunities for discourse, valuing positive emotion, making time for reflection, rewarding ethical behavior, strengthening escalation processes, eliciting feedback, and establishing a learning culture. (shrink)