Professionals in business and law, healthcare providers, educators, policymakers, consumers, and higher education practitioners value ethical reasoning skills. Because of this, we concentrated campus-wide reaccreditation efforts to help students actively engage in ER. In doing so, we re-conceptualized the ER process, implemented campus-wide ER interventions designed to be experienced by all undergraduate students, and created the ethical reasoning identification test to measure students’ ability to engage in a foundational step in the ER process. Using factor analysis, we demonstrated internal validity (...) evidence for ERIT scores. More specifically, confirmatory factor analysis provided support for a unidimensional factor structure, meaning stakeholders can report and analyze ERIT total scores. The unidimensional factor structure was replicated using two independent samples. Across all samples, ERIT scores demonstrated reliability consistent with professional standards. In addition, we collected external validity evidence for ERIT scores. The ERIT was sensitive to slight differences in ER training. That is, students experiencing a 75-min intervention performed better on the test compared to students without this experience. Overall, results suggested that our ER intervention may effectively increase students ER abilities and the ERIT demonstrated great potential for assessing foundational ethical reasoning skills. To further examine validity, researchers should consider known groups analyses with varying “doses” of the ER intervention, as well as measurement invariance studies. (shrink)

Drawing upon rational choice and investor attention theories, we examine how accusations of corporate bribery and subsequent investigations shape market reactions. Using event study methodology to measure loss in firm value for public firms facing bribery investigations from 1978 to 2010, we found that total market penalties amounted to $60.61 billion. We ran moderated multiple regression analysis to examine further the degree to which the unique characteristics of bribery explain variations in market penalties. Companies committing bribery in less corrupt host (...) countries and with the involvement of compromised executives experienced greater market penalties than did other companies. After partitioning share value losses into components for regulatory penalties, class action settlements, and loss to reputation, we found that reputational penalties account for 81.8¢ of every dollar of share value loss. Omission of reputational penalties in rational choice calculus underestimates bribery costs by 4.5 times. The results suggest that firms should not underestimate the importance of market-imposed reputational penalties by merely considering regulator-imposed fines and sanctions. (shrink)