Research in the field of management has increasingly focused on strategies and tools related to corporate sustainability. Of the tools examined, codes of ethics have been found to play a primary role. Many studies have investigated the content of such codes, as well as their capacity to condition the behaviour of people within organizations. However, few studies have considered the intrinsic quality of codes of ethics. This study aims to investigate the impact that specific factors—firm size, degree of internationalization and (...) industry effect—can have on the quality of codes of ethics. Based on a sample of 248 listed Italian companies, the results of the empirical analysis show that the quality standard is particularly high in larger companies and in those firms operating in industries in which relationships established with critical stakeholders—and disclosure to those stakeholders—play a crucial role. These results have interesting implications for both researchers and practitioners. (shrink)

The intent of ethics is to establish a set of standards that will provide a framework to modify, regulate, and possibly enhance moral behaviour. Eleven focus groups were conducted with physicians from six culturally distinct countries to explore their perception of formalized, written ethical guidelines (i.e., codes of ethics, credos, value and mission statements) that attempt to direct their ethical practice. Six themes emerged from the data: lack of awareness, no impact, marginal impact, other codes or value statements supersede, personal (...) codes or values dictate, and ethical guidelines are useful. Overall, codes were valued only when they were congruent with existing personal morality. The findings suggest the need to re-evaluate the purpose, content, and delivery of codes for them to improve their function in promoting ethical conduct. (shrink)

The proposed adoption of International Financial Reporting Standards (IFRS) in the United States has ignited a debate as to whether the principles‐based nature of these standards better serves the interests of investors. While it is argued that these principled‐based standards will encourage more transparent financial reporting than the current rules‐based U.S. standards, critics argue that IFRS will invite more aggressive financial reporting through the liberal exercising of professional judgment. This empirical study aims to understand what individual and organizational factors may (...) affect aggressiveness when making accounting judgments. In particular, we examine the influence that prior ethics training, codes of ethics and an individual's predominant moral reasoning schema have on adherence to company policy in an accounting‐related (depreciation) judgment. Results of the study show that respondents with prior ethics training are more likely to adhere to company accounting policy than those who have not had formal ethics education. Respondents presented with a company ethics code also were less aggressive in their accounting judgments than those who were not presented with a code prior to reading the scenario. Finally, decision aggressiveness was moderated by individuals who used conventional moral reasoning schemas. (shrink)

Prior studies have provided explanations for the presence, use and dissemination of codes of corporate ethics or codes of corporate conduct of business corporations. Most such explanations are functional in nature, and are descriptive as they are derived from the codes and their associated documents. We search for more underlying explanations using two complementary theories: first, social contract theories explaining the exogenous and endogenous reasons of organizational behavior, and then institutional theory explaining why organizations take similar measures in response to (...) institutional pressures. Based on our explanations, we contend that the codes and their use and dissemination are arising from underlying social and institutional pressures for firms to continuously validate their existence in the face of increasing changes and recurrent uncertainties. (shrink)

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

This study investigates the role that moral identity, religiosity, and the institutionalization of ethics play in determining the extent of justification of norm violating behavior among business practitioners. Moral justification is where a person, rather than assuming responsibility for an outcome, attempts to legitimize ethically questionable behavior. Results of the study indicate that both the internalization and symbolization dimensions of moral identity as well as intrinsic religiosity and the explicit institutionalization of ethics within the organization are significant determinants of the (...) moral justification of unethical behaviors. (shrink)

Although it is suggested that an important role for codes of ethics is to influence decision making, the little research into the impact of codes of ethics on decisions finds little impact. Insights from information economics help to explain this. If an individual will select the action that a code of ethics indicates to be ethical in the absence of a code, then expressing that position in a code of ethics will have no impact on the action chosen. Even if (...) the individual will select the action that a code of ethics indicates to be unethical in the absence of a code, the presence of a statement in the code of ethics must cause the individual's beliefs to change enough so that he or she changes actions. This can be a fairly high obstacle. Enforcement provisions can increase the likelihood that an individual will select the action that a code of ethics indicates to be ethical. There are limits, however, as to how effective enforcement provisions can be. Therefore, although there may be other important goals for a code of ethics, having an impact on decision making is one that is often difficult to achieve. (shrink)

The use of technology in marketing has become an increasingly important competitive tool in developing and maintaining efficient and productive customer relationships. However, the ethics of using this technology has received little attention. This study investigates how and if marketing organizations are adapting their ethics policies to incorporate use of sales technology (ST). Based on in-depth interviews with executives from a variety of highly regulated to nonregulated business-to-business and business-to-consumer industries, our results show that, although most organizations indeed have codes (...) of ethics, there appears to be a gray area of how these codes address ST. Further, it appears that monitoring the ethical use of ST varies and can be a frustrating and time-consuming issue for marketing and sales executives. Implications of our findings are discussed for the benefit of marketing practitioners, ethics managers, and researchers. (shrink)

The research reported in this paper set out to investigate ethics in the initial stages of construction projects. Briefing is the first real contact stage between the commissioner (client/employer) of a project — at this stage a potential project — and those involved in project realization — the designers and, subsequently, the constructors. It is well known that early decisions are of greatest impact and so, the importance of the initial contacts, communications and consequent decisions are paramount. Different project participants (...) are known to pursue individual objectives to varying degrees as well as possessing different perspectives and perceptions and operating/behaving in different ways. Hence, determination of the appropriate form, content etc. of a project is, inevitably, a matter of exercising value judgements and compromises and so, involves ethical considerations. A case study of a project through the briefing stage is reported and analysed, from initial contacts to scheme approval. It is apparent that a number of ethical concerns are manifest through the various actions of the major participants. (shrink)

This paper examines ethics in organizations in relation to the subjectivity of managers. Drawing on the work of Michel Foucault we seek to theorize ethics in terms of the meaning of being a manager who is an active ethical subject. Such a manager is so in relation to the organizational structures and norms that govern the conduct of ethics. Our approach locates ethics in the relation between individual morality and organizationally prescribed principles assumed to guide personal action. In this way (...) we see ethics as a practice that is powerfully intertwined in an individual’s freedom to make choices about what to do and who to be, and the organizational context in which those choices are situated, framed and governed. (shrink)

Codes of ethics exist in many, if not the majority, of all large U.S. companies today. But how the impact of these written codes affect managerial attitudes and behavior is still not clearly documented or explained. This study takes a step in that direction by proposing that attention should shift from the codes themselves as the sources of ethical behavior to the persons whose behavior is the focus of these codes. In particular, this study investigates the role of code familiarity (...) as a factor impacting the influence of an ethics code on manager behavior. Data collected from 286 executives from companies in the direct selling industry are used to test hypotheses (1) that the perceived usefulness of ethics codes is positively related to the degree of familiarity with the code, and (2) that ethical climate as assessed by managers is positively related to the code''s perceived usefulness. Both hypotheses are supported, and their implications and further research directions are discussed. (shrink)

This study examines the responses of human resource directors and hospitality students to seven different ethical scenarios. Both groups were asked to rate these situations on their ethicality using a Likert-type scale. The directors and students decided that an act of theft was the most unethical, followed by sexual harassment, and an attempt to obtain proprietary information from another company. Expressing racial preferences in terms of servers was fourth. Directors rated all the scenarios ethically lower than did students, indicating that (...) experience and heightened sensitivity to possible litigious situations may have played a role in perceptual differences. (shrink)

Communicating ethical values is a serious issue for a number of organizations. While ethical codes are useful, they cannot exist alone. Organizations must make certain codes reflect the ideals of individuals in the organization and the ethical expectations must be clearly communicated. This study examined the sources (people) and channels (ways messages were received) that affected how employees learned about ethics. Results showed that training and orientation programs were affirmed as sources of learning along with teaching others. Codes and handbooks (...) were also identified as ways employees learned about ethics in their organization. Ethical issues were discussed more frequently with fellow employees than with supervisors suggesting that managers could be more proactive about discussing ethics with employees. (shrink)

Following a government campaign run by the Independent Commission Against Corruption (ICAC) in 1994, many Hong Kong companies and trade associations adopted written codes of conduct. The research study reported here examines how and why companies responded, and assesses the impact of code adoption on the moral climate of code adopters. The research involved (a) initial questionnaire surveys to which 184 organisations replied, (b) longitudinal questionnaire-based assessments of moral ethos and conduct in a focal sample of 17 code adopting companies, (...) (c) interviews with 33 managers in the focal companies examining the adoption and impact of the codes, and (d) content analysis of 41 company codes of conduct, including those of most focal companies, plus the ICAC model code.While a mixture of prudential and altruistic reasons were given for code adoption, content analysis suggested that the prime motive was corporate self-defence. The prevailing themes were bribery, conflict of interest, insider information, gambling, moonlighting, accuracy of records and misuse of corporate assets. Wider social responsibility tended to be neglected. Companies appeared to have imposed their codes top-down, emphasising disciplinary procedures rather than ethics training, and appointing neither ethics counsellors nor ombuds-people. The longitudinal study over a seven month period suggested that while moral ethos may have declined, overall standards of perceived conduct had not changed. (shrink)

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

Are corporate codes of ethics necessarily ethical? To challenge this notion, an initial set of universal moral standards is proposed by which all corporate codes of ethics can be ethically evaluated. The set of universal moral standards includes: (1) trustworthiness; (2) respect; (3) responsibility; (4) fairness; (5) caring; and (6) citizenship. By applying the six moral standards to four different stages of code development (i.e., content, creation, implementation, administration), a code of ethics for corporate codes of ethics is constructed by (...) which companies can be ethically audited for compliance. The newly proposed code of ethics for corporate codes of ethics was then applied to four large Canadian companies representing a variety of industries: telecommunications; banking, manufacturing, and high technology. The ethical audit of the four companies' ethics programs based on the proposed code indicates that all four companies have room to improve the ethical nature of their codes of ethics (i.e., content, creation, implementation, administration). (shrink)

The report of the Treadway Commission suggests that all public companies should establish effective written codes of conduct in promoting honorable behavior by corporations. The need for written "codes of conduct" for businesses is evident in the current literature. However, there is not sufficient evidence regarding the implication of codes of conduct in a college. Academic dishonesty has become an important issue in institutions of higher education. Codes of conduct can also provide a basis for ethical behavior in colleges and (...) universities. Survey respondents were generally supportive of the concept of codes of ethical conduct in colleges and universities. The results of this study indicate that college codes of conduct tend to follow a "low road" approach. The results also suggest the following needed improvements in college and university codes of conduct: (1) greater emphasis on preventing financial, scientific, and academic fraud; (2) more inclusion of the faculty in the process; and (3) establishment of a proper process for implementation of the code. (shrink)

The idea of corporate social responsibility is neither new nor radical. The core belief is that business managers, even in their role as managers, have responsibilities to society beyond profit maximization. Managers, in pursuing their primary goal of increasing shareholder value, have social responsibilities in addition to meeting the minimal requirements of the law. Nevertheless, the call for increased social responsibility on the part of business managers remains controversial. At least two major perspectives on social responsibility can be isolated. The (...) classical view, most closely identified with Milton Friedman, suggests that social responsibility is incompatible with a free enterprise economy. By contrast, advocates of increased social responsibility point out the desirability for voluntary (and at times costly) corporate activities which promote society's well being. The purpose of this essay is to briefly describe both the classical and pro-social responsibility perspectives. We suggest that while important differences in assumptions characterize the two distinct views, there is enough overlap and agreement to move the debate beyond the current stalemate. Specifically, we argue that the concept oflifnim mishurat hadin, an innovative and ancient Jewish legal doctrine which is usually translated as beyond the letter of the law, might serve as a model for modern legal and social thought. We examine talmudic and post-talmudic sources which apply this concept to the area of business ethics, and explore its applicability to the modern situation. Although the business ethics literature rarely refers to Talmudic and rabbinic sources, these texts reflect a sophisticated understanding of business practices and ethical problems. (shrink)

This paper analyses the ethical performance of foreign-investment enterprises operating in China in comparison to that of the indigenous state-owned enterprises, collectives and private enterprises. It uses both the deontological approach and the utilitarian approach in conceptualization, and applies quantitative and econometric techniques to ethical evaluations of empirical evidences. It shows that according to various ethical performance indicators, foreign-investment enterprises have fared well in comparison with local firms. This paper also tries to unravel the effect of a difference in business (...) culture and competitive market forces on ethical performance by comparing the behavior of foreign-investment enterprises with that of the indigenous state-owned enterprises and collectives on the one hand, and with that of the indigenous private enterprises on the other. (shrink)

In a national survey, members of 4As agencies were contrasted with non-member agencies to determine awareness and influence of the 4As Standards of Practice, the Professional Code of Ethics for 4As members. The 4As Code was selected because the 4As represents the principle professional association of the support service industry, advertising.

Although interest in business ethics has rapidly increased, little attention has been drawn to the relationship between ethics and sexual harassment. While most companies have addressed the problem of sexual harassment at the organizational level with corporate codes of ethics or sexual harassment policies, no research has examined the ethical ideology of individual employees. This study investigates the relationship between the ethical ideology of individual employees and their ability to identify social-sexual behaviors in superior-subordinate interactions. The results indicate that ethical (...) ideology does have an effect on employees' ability to identify verbal sexually harassing behaviors. This effect, however, is not demonstrated on nonverbal sexually harassing behaviors. (shrink)

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

This paper reports an analysis of the content of the codes of ethics of 15 professional business organizations in the United States, representing the broad range of disciplines found in business. The analysis was conducted to identify common ethical issues faced by business professionals. It was also structured to highlight ethical issues that are either unique to or of particular importance for business professionals. No attempt is made to make value judgments about either the codes of ethics studied or of (...) their content. General ethical values identified include honesty and integrity, general legal compliance, discreditable or harmful acts, and obligations related to social values. More business-specific issues include confidentiality, responsibilities to employers/clients, obligations to the profession, independence and objectivity, and business-specific legal and technical compliance issues. (shrink)

With the dramatic collapse of bureaucratic dictatorial socialism, Business Ethicists need an antithesis to capitalism to enrich our reformist writings. Reliance on self-regulation and requesting that business executives behave in a socially responsible manner are necessary, but not sufficient, conditions for creating a "good society." The purpose of this article is to introduce readers to the works of two new age theologians – Neale Donald Walsch and Reverend Sun Myung Moon – who offer an alternative vision and paradigm for understanding (...) business and society relationships. They provide unique insights about economics, organizational structures and policies, and individual attitudes and behaviors necessary for creating an ethical society. Pertinent economic and organizational concepts emanating from their writings include mission statements and codes of ethics; meaningful and joyful work; autonomy and self-management; workplace diversity; parentism and participatory management; stakeholder governance boards; democratic social capitalismwith upper and lower income limits; and the principle ofvisibility. Work should support family units and individualgrowth and development, not supersede or destroy them. (shrink)

A review of the literature on Corporate Codes of Ethics suggests that whilst there exists an informative body of literature concerning the prevalence of such codes, their design, implementation and promulgation, it is also evident that there is a relative lack of consideration of their impact upon members' everyday organizational behaviour. By drawing upon organizational sociology and psychology this paper constructs a contextualist and interpretive model which seeks to enable an analysis and evaluation of their effects upon individual, group and (...) organizational behaviour. (shrink)

The purpose of this study was to develop and test a model capturing the effects of ethics institutionalization on employee experiences in work life and overall life satisfaction. It was hypothesized that explicit ethics institutionalization has a positive effect on implicit ethics institutionalization, which in turn enhances employee experiences in work life. It was also hypothesized that employee work life experiences have a positive effect on overall life satisfaction and happiness, moderated by work–family life conflict. Data were collected though a (...) survey of marketing managers in Italy. The data provide good but partial support for the model. Theoretical and managerial implications are discussed. (shrink)

As a result of recent corporate scandals, several rules have focused on the role played by Boards of Directors on the planning and monitoring of corporate codes of ethics. In theory, outside directors are in a better position than insiders to protect and further the interests of all stakeholders because of their experience and their sense of moral and legal obligations. Female directors also tend to be more sensitive to ethics according to several past studies which explain this affirmation by (...) early gender socialization, the fact that women are thought to place a greater emphasis on harmonious relations and the fact that men and women use different ethical frameworks in their judgments. The goal of this paper is to determine the influence of these characteristics of the Board in terms of promoting and hindering the creation of a code of ethics. Our findings show that a greater number of female directors does not necessarily lead to more ethical companies. Moreover, within Europe as a continent, board ownership leads to an entrenchment of upper-level management, generating a divergence between the ethical interests of owners and managers. In light of this situation, the presence of independent directors is necessary to reduce such conflicts. (shrink)

This paper takes its point of departure in an article by Stevens [Stevens, B.: 1994, Journal of Business Ethics 54, 163–171], in which she identified a lack of knowledge regarding how corporate codes of ethics are communicated and affect behavior in organizations. Taking heed of this suggested gap, we review studies on corporate codes of ethics with an empirical content, published since 1994. The conclusion of the review is that we still lack knowledge on how codes work, how they are (...) communicated and how they are transformed inside organizations. Stevens’ plea could even be extended, arguing that the knowledge gap might be of even more significance than in the mid-1990s. Some directions for how this situation can be approached in future studies are outlined in the paper. (shrink)

Ethical guidelines for psychologists are meant to stimulate and help psychologists to act appropriately with respect to clients, colleagues, and other individuals involved in their professional relations. This paper focuses on the similarity of codes of ethics of psychologists in European countries in general, and on specific ethical dilemmas in the area of work and organizations in particular. First, an overview is given of the development of ethical guidelines in Europe and the USA. Second, the results are presented of a (...) survey by E-mail amongst members of the European Federation of Psychologists’ Associations (EFPA) to identify the differences and similarities between ethical guidelines of the affiliate members. Third, the potential dilemmas of stakeholders in work and organizational assessment are addressed. Finally, the results of a survey among Dutch selection psychologists are presented. The purpose of this study was to examine a possible tension between normative behavior and attitudes about normal behavior. It was concluded that ethical guidelines of European countries cover comparable (sub-)principles and that there are indications that individual psychologists agree with the written principles. In addition, suggestions for future research are given. (shrink)

This two country study examines the effect of corporate ethical values and enforcement of a code of ethics on perceptions of the role of ethics in the overall success of the firm. Additionally, the impact of organizational commitment and of individual variables such as ethical idealism and relativism was examined. The rationale for examining the perceived importance of the role of ethics in this manner is to determine the extent to which the organization itself can influence employee perceptions regarding ethics (...) and social responsibility. Results indicate that all of the variables tested, except relativism, impacted upon one’s perceptions of the importance of ethics and social responsibility. Perceptions of the importance of ethics and social responsibility also varied depending upon country of residence with the U.S. sample having somewhat higher perceptions concerning the importance of ethics and social responsibility than their counterparts in Spain. Furthermore, when comparing the two samples, the U.S. sample had significantly higher corporate ethical values, greater enforcement of ethical codes, less organizational commitment and both lower idealism and relativism. (shrink)

How can one establish if a corporate code of ethics is ethical in terms of its content? One important first step might be the establishment of core universal moral values by which corporate codes of ethics can be ethically constructed and evaluated. Following a review of normative research on corporate codes of ethics, a set of universal moral values is generated by considering three sources: (1) corporate codes of ethics; (2) global codes of ethics; and (3) the business ethics literature. (...) Based on the convergence of the three sources of standards, six universal moral values for corporate codes of ethics are proposed including: (1) trustworthiness; (2) respect; (3) responsibility; (4) fairness; (5) caring; and (6) citizenship. Relying on the proposed set of universal moral values, implications are discussed as to what the content of corporate codes of ethics should consist of. The paper concludes with its limitations. (shrink)

Nine codes of ethics from companies in the Swedish financial sector were subjected to a content analysis to determine how they address and treat employees. The codes say a great deal about employee conduct and misconduct but next to nothing about employee rights, their rightful expectations or their value to the firm. The normative analysis – echoing some of the value-based HRM literature – draws on the foundational values of respect, equality, reciprocity and care. The analysis shows that most of (...) the codes are in conflict with these values. Such a treatment is then in conflict with fairness and risks harming the employees. Some of the features that make these codes ethically problematic are typical of how corporate codes have been described in previous code studies. Consequently, the normative analysis reaches beyond the scope of this material and in the end, what is at stake, is a very typical code design. (shrink)

Most scholarly interest in codes of ethics or conduct has focused on traditional companies. Little is known about the codes of social enterprises or hybrid organizations such as microfinance institutions. Our paper provides a comparative case study of the codes of a Mexican microfinance network and seven MFIs. Using the corporate integrity model, we analyze the content of MFIs’ codes compared to those of traditional organizations. We then examine to what extent some specific features of MFIs such as their mission, (...) target group, and applied credit methodologies, are factors that determine the content of their code. We find that MFIs’ codes, like those of traditional companies, include traditional stakeholder principles. Nevertheless, they put greater emphasis on ‘socially-oriented’ principles or on terms such as ‘people’ and ‘common good’. MFIs’ codes differ with respect to the items they include and exclude and the size of the covered sections. We also find that these codes attempt to address prevailing concerns in microfinance but rarely tackle two critical debates, namely levels of interest rates and of profitability. We finally argue that it is difficult to move toward a global code, owing to regional disparities and the variety of organizational models and missions. (shrink)

This study investigates the association of a broad set of variables with the ethical decision making of management accountants in Libya. Adopting a cross-sectional methodology, a questionnaire including four different ethical scenarios was used to gather data from 229 participants. For each scenario, ethical decision making was examined in terms of the recognition, judgment and intention stages of Rest’s model. A significant relationship was found between ethical recognition and ethical judgment and also between ethical judgment and ethical intention, but ethical (...) recognition did not significantly predict ethical intention—thus providing support for Rest’s model. Organizational variables, age and educational level yielded few significant results. The lack of significance for codes of ethics might reflect their relative lack of development in Libya, in which case Libyan companies should pay attention to their content and how they are supported, especially in the light of the under-development of the accounting profession in Libya. Few significant results were also found for gender, but where they were found, males showed more ethical characteristics than females. This unusual result reinforces the dangers of gender stereotyping in business. Personal moral philosophy and moral intensity dimensions were generally found to be significant predictors of the three stages of ethical decision making studied. One implication of this is to give more attention to ethics in accounting education, making the connections between accounting practice and Islam. Overall, this study not only adds to the available empirical evidence on factors affecting ethical decision making, notably examining three stages of Rest’s model, but also offers rare insights into the ethical views of practising management accountants and provides a benchmark for future studies of ethical decision making in Muslim majority countries and other parts of the developing world. (shrink)

Research about codes of corporate ethics has hitherto taken a hypothetical, correct meaning of codes for granted. The article problematises the dichotomous categories intrinsic and subjective meanings of codes. I address the question if professionals in finance accept codes of business. The particular mentality of stockbrokers and traders constructs the way they judge restrictions such as company codes of ethics. While neglecting dimensions of ethics beyond known rules, brokers and traders distrust good ethics as a possible end in itself. Many (...) professionals in the financial market perceive efforts to integrate ethical reasoning in work as only means for maximising business opportunities. (shrink)

Prisoner's dilemmas can lead rational people to interact in ways that lead to persistent inefficiencies. These dilemmas create a problem for institutional designers to solve: devise institutions that realign individual incentives to achieve collectively rational outcomes. I will argue that we do not always want to eliminate misalignments between individual incentives and efficient outcomes. Sometimes we want to preserve prisoner's dilemmas, even when we know that they systematically will lead to inefficiencies. No doubt, prisoner's dilemmas can create problems, but they (...) also create opportunities to practice the cooperative norms that make market institutions possible in the first place. An ethical market culture, I argue, benefits from the presence of prisoner's dilemmas. I first consider standard approaches for solving prisoner's dilemmas. I then argue for the value of prisoner's dilemmas. Finally, I show the significance of this argument for advocating codes of business ethics. (shrink)

Response to wrongdoing is modeled as a decision process in an organizational context. The model is grounded in theory of risk, ambiguity, and informational influences on decision making. Time pressure, inadequate information and coworker influences are addressed. Along the way, a handful of propositions are provided which emphasize influences on the actual choice between response options.

Despite the pervasive use of ethics training by companies, research in management accounting has not considered the effectiveness of such training in curtailing managers’ misreporting. This study examines the effect of ethics training on misreporting as a reminder to raise the awareness of employees’ ethical commitment. Furthermore, this study investigates the extent to which reciprocity in the workplace affects managers’ misreporting. The results from an experiment involving 124 managers show that in the absence of an ethical commitment reminder, managers are (...) more likely to engage in misreporting than when an ethical commitment reminder is present. The results suggest that ethical commitment reminder interacts with reciprocity in the workplace, affecting managers’ misreporting. Specifically, the results reveal that managers are more likely to engage in misreporting under the reciprocity in the workplace condition when the ethical commitment reminder is absent. The theoretical and practical implications of these findings are discussed. (shrink)

Over the past decade, corporate scandals have proliferated. These scandals, along with the emergence of the #MeToo movement and Environmental, Social, and Corporate Governance (ESG) mandates, have increased the scrutiny of corporations’ ethics culture. How have companies responded in terms of the language appearing in their public ethics documents? We compare the Code of Ethics in 2008 versus 2019 for a sample of S&P 500 firms. For the vast majority of firms, their Code of Ethics lengthened, with the average 2019 (...) code having 29% more words (about 1760 words) than the 2008 average. The language of the codes has also changed. Words such as _bribery, corruption, sustainability, speak up, bullying, slavery,_ and _human rights_ all saw significantly higher usage in the later period. We review possible reasons for the dramatic changes and suggest what questions remain about the motivations behind them. Whether the changes we observe are primarily intrinsically motivated or simply market responses to public pressures is yet to be determined. What is clear from our findings is that society seems to be entering a new age of increasingly moral—or, at least, moralized—corporate governance. (shrink)

Against the backdrop of a global pandemic, this study investigates how U.S. higher education leaders have centered their crisis management on values and guiding ethical principles. We conducted 55 in-depth interviews with leaders from 30 U.S. higher education institutions, with most leaders participating in two interviews. We found that crisis plans created prior to the COVID-19 pandemic were inadequate due to the long duration and highly uncertain nature of the crisis. Instead, higher education leaders applied guiding principles on the fly (...) to support their decision-making. If colleges and universities infuse shared values into their future crisis plans, they will not have to develop a moral compass on the fly for the next pandemic. This paper suggests the following somewhat universal shared values: engage in accuracy, transparency, and accountability; foster deliberative dialog; prioritize safety; support justice, fairness, and equity; and engage in an ethic of care. To navigate ethics tensions, leaders need to possess crisis-relevant expertise or ensure that such expertise is present among crisis management team members. Standing up formal ethics committees composed of diverse stakeholders also is instrumental in navigating tensions inherent in crises. The next pandemic is already on the horizon according to experts. Through infusing values into future crisis plans, higher education leaders can be confident that their responses will be grounded in their communities’ shared values. (shrink)

We reflect on the nature of corporate codes of conduct is this article. Based on John Austin’s speech act theory, four characteristics of a performative concept of corporate codes will be introduced: 1) the existential self-performative of the firm identity, 2) which is demanded by and responsive to their stakeholders; 3) Because corporate codes are structurally threatened by the possibility of failure, 4) embracing the code not only consists in actual corporate responsible behaviour in light of the code, but in (...) the incessant recapturing of the code in the struggle of firms against the possible incongruence between their ethical principles and their actual responsible behaviour. A performative concept of corporate codes helps to bridge classical dichotomies like individualist versus collectivist approaches of moral agency and restrictive versus empowering ethics, and opens a new perspective on the interaction between individual ethical behaviour and the corporate institutionalisation of codes. (shrink)

This paper presents a review of 100 empirical papers studying corporate codes of ethics in business organizations from the time period mid-2005 until mid-2016, following approximately an 11-year time period after the previous review of the literature. The reviewed papers are broadly categorized as content-oriented, output-oriented, or transformation-oriented. The review sheds light on empirical focus, context, questions addressed, methods, findings and theory. The findings are discussed in terms of the three categories as well as the aggregate, stock of empirical CCE (...) studies in comparison with previous reviews, answering the question “where are we now?” Content and output studies still stand for the majority of the studies, whereas the transformation studies are fewer. Within these areas, two new trends are found to have emerged: discursive analyses and a focus on labor conditions. The review finds that the content of CCEs is still predominantly self-defensive, that CCEs are insufficient in themselves in terms of protecting workers’ rights, that CCEs are likely to encounter tensions when implemented across national and organizational boundaries, and that while perception of CCEs is generally positive, CCEs may lead to both positive and negative outcomes. Based on these findings, potential areas for further exploration in the area of CCE research are suggested. (shrink)

While previous literature provides evidence of the positive relationship between ethical climate and job satisfaction, the possible mechanisms of this relationship are still underexplored. This study aims to enhance scholars’ and practitioners’ understanding of the ethical climate–job satisfaction relationship by identifying and testing two of the possible mechanisms. More specifically, this study fills an existing research gap by examining social and interpersonal mechanisms, referred to in this study as workplace isolation of colleagues and salesperson’s teamwork, of the ethical climate–job satisfaction (...) relationship. This is vital for the selling profession because job satisfaction is known to drive higher levels of salespeople’s performance. The arguments for such mechanisms are built on the foundations of social/psychological contract theory and ethical climate literature. Empirical testing using a large sample of salespeople shows higher levels of ethical climate to decrease workplace isolation and increase teamwork. Findings support hypothesized model where ethical climate positively relates to job satisfaction as partially mediated by workplace isolation and teamwork. Ethical climate is negatively related to workplace isolation and positively to teamwork. Further, findings indicate negative effect of workplace isolation on teamwork and sales performance. Job satisfaction is found to be key factor in driving performance of salespeople. (shrink)

This study elucidates the link and effect of ethical reinforcement in the post‐financial crisis era by taking two congruent directions to demonstrate that ethical reinforcement can be accomplished by either a continuous ethical training or a meticulous code of business ethics—which members of the mutual fund industry claim they adhere to—as both have a positive effect on the funds’ performance, including sizeable gains to investors. Furthermore, evidence divulges that ethical reinforcement moderates the performance of ethical or socially responsible investments (SRI) (...) funds more than nonethical investments, suggesting that a perspective of ethical or SRI classification of a fund alone is not sufficient, but it is necessary to have the institutional ethical environment and/or managers’ continuous ethical training. This result supports the notion of financial market discipline and reveals some factors behind SRI or ethical funds returns, notably during the period following the recent financial crisis. (shrink)

Ethical climate in organisations has been studied widely and its influence on ethical behaviour has been documented. However, little is known about the ethical climate at university context and about its antecedents. Universities are social change institutions and their ethical climate could influence the ethical behaviour of future economic, social and political leaders. The current study analyses the perceived ethical climate in Business Studies Higher Education Institutions in Spain and whether university’s ownership, size and signing up for international initiatives influence (...) it. The study is based on survey responses of 385 lecturers of Spanish Business Studies Faculties to an ethical climate questionnaire and on survey responses of 33 Business Studies Deans to a questionnaire related to the commitment to ethics and social responsibility in each Faculty. An exploratory factor analysis has been used as well as ANOVA tests and lineal regressions. The results reveal the predominance of an instrumental ethical climate in Spanish Business Faculties, an ethical climate that does not promote ethical behaviour or organisational commitment among its members. The results also confirm the significant influence of university’s ownership and signing up for Principles for Responsible Management Education on the ethical climate in Business Higher Education institutions. This study advances the understanding of the ethical climate in Business Studies institutions, and suggests measures to be taken by university managers in order to improve ethical judgment and behaviour of the university community. (shrink)

Growing recognition in both the psychological and management literature of the concept of “good people” has caused a paradigm shift in our understanding of wrongful behavior: Wrongdoings that were previously assumed to be based on conscious choice—that is, deliberate decisions—are often the product of intuitive processes that prevent people from recognizing the wrongfulness of their behavior. Several leading scholars have dubbed this process as an ethical “blind spot.” This study explores the main implications of the good people paradigm on the (...) regulation of employees’ conflicts of interest. In two experiments, we examined the efficacy of traditional deterrence- and morality-based interventions in encouraging people to maintain their professional integrity and objectivity at the cost of their own self-interest. Results demonstrate that while the manipulated conflict was likely to “corrupt” people under intuitive/automatic mindset, explicit/deliberative mechanisms had a much larger constraining effect overall on participants’ judgment than did implicit measures, with no differences between deterrence and morality. The findings demonstrate how little is needed to compromise the employees’ ethical integrity, but they also suggest that a modest explicit/deliberative intervention can easily prevent much of the wrongdoing that may otherwise result. (shrink)

Codes of ethics are directly aimed at behavioral control, but they also affect a company’s ethical culture, which in turn concerns compliance and ethical behavior. To positively influence a company’s ethical culture, employees must be familiar with its code of ethics, perceive that top management is committed to the code, and believe that their peers also comply with the code. The evidence on whether a code’s design affects a company’s ethical culture is limited. This study’s factorial survey experiment contributes to (...) this gap in two ways: first, it investigates whether a code’s design affects how easily the code can be learned and, therefore, contributes to code familiarity. Second, it examines how a code can convey expectations regarding top management’s commitment and peers’ behavior, both of which are part of ethical culture. The results indicate that a positive tone increases code familiarity, and a code signed by top managers sends a strong signal of their commitment to the code. Finally, various implications of the results for research and practice are discussed. (shrink)