The focus of the present study was the rationality of moral behaviour and moral conviction. Assumptions like "morality pays" or "good ethics is good business" are not a priori right. Whether morality as personal conviction is also economically rational or not depends in large part on the institutional setting of a society and the likelihood that immoral behaviour will be sanctioned. The systematic approach to morality thus appears to be political economy and the institutional setting: rules and laws. However, the (...) conditions for morality depend not only on the formal structures but also on the informal structures of rules and sanctions. Hence, the systematic approach to morality is most closely linked with the culture of a society; the efficiency of individual morality depends on social conditions. It is costly for individuals and societies to establish and entertain conditions that set clear incentives for moral behaviour. In this context, moral competencies, learning, and education play a crucial role. (shrink)

This paper describes and discusses the Enron Corporation debacle. The paper presents the business ethics background and leadership mechanisms affecting Enron''s collapse and eventual bankruptcy. Through a systematic analysis of the organizational culture at Enron (following Schein''s frame of reference) the paper demonstrates how the company''s culture had profound effects on the ethics of its employees.

The news reminds us almost daily that the truth is apparently not highly valued by many in business. This paper develops two prescriptive standards — the Expectation and Reputation guidelines — that may help businesspeople avoid violating clearly accepted truth standards. The guidelines also assist in determining whether truth is required in circumstances where honesty seems in conflict with the practical demands of business. A discussion of why, when and how these guidelines may be applied to facilitate truth-telling by business (...) organizations follows, along with illustrative examples. (shrink)

Concern for one's "reputation" has been introduced in recent game theory enabling theorists to demonstrate the rationality ofcooperative behavior in certain contexts. And these impressive results have been generalized to a variety of situations studied bystudents of business and business ethicists. But it is not clear that the notion of reputation employed has much explanatory power onceone sees what is meant. I also suggest that there may be some larger lessons about the notion of rationality used by decision theorists.

The study ascertained (1) whether an observer's scope of justice with reference to either the moral agent or the target person of a moral act, would affect his/her judgements of the ethicality of the act, and (2) whether observer judgements of ethicality parallel the moral agent's decision processes in systematically evaluating the intensity of the moral issue. A scenario approach was used. Results affirmed both research questions. Discussions covered the implications of the findings for the underlying cognitive processes of moral (...) judgements, for the link between judgements of fairness and ethicality, as well as for the debate of ethical absolutism versus relativism. (shrink)

In the context of a crisis of confidence in executive leadership in corporate America, this paper examines the role of integrity as a mediator within strategic leadership and its impact on credibility in reputational capital. A tension can occur within strategic leadership between the elements of strategic planning and leadership vision. This tension can destroy the credibility of reputational capital unless strategic leadership is managed effectively. Integrity can be used as the glue providing for credible leadership vision amid a strategic (...) perspective oriented to competitive pressures, thereby enabling strategic leadership to contribute to a sustainable competitive advantage. A strategic leadership audit is presented as a tool by which strategic leadership and reputational capital can be managed. (shrink)

Abstract:Concern for one’s “reputation” has been introduced in recent game theory enabling theorists to demonstrate the rationality of cooperative behavior in certain contexts. And these impressive results have been generalized to a variety of situations studied by students of business and business ethicists. But it is not clear that the notion of reputation employed has much explanatory power once one sees what is meant. I also suggest that there may be some larger lessons about the notion of rationality used by (...) decision theorists. (shrink)

Merchant and Rockness (1994, p. 92) characterize earnings management as "probably the most important ethical issue facing the accounting profession" and provide initial evidence of the ethical judgments of various organizational members. The current study extends their work by examining the extent to which an individual''s ethically-related judgments in response to earnings management activities are associated with the individual''s role.In an experimental study, evening MBA students read three hypothetical scenarios involving a manager engaging in earnings management. The scenarios involved a (...) gain from an operating activity, a gain from an accounting activity, and a loss from an accounting activity. Before reading the cases, however, participants were randomly assigned to one of three roles: a shareholder, another manager from the company who is unfamiliar with the manager in the case, or another manager from the company who is familiar with the manager in the case. Following each case, participants made four ethically related judgments. (shrink)

Earnings management behavior is a concern of standard-setters, regulators and the accounting profession. This study examines the ethics of this practice using a national sample of 763 accounting practitioners, faculty and students. Possible determinants of the ethics of this practice such as perceived role of ethics and social responsibility, and personal moral philosophies (i.e. idealism and relativism) are explored. Results indicate a positive relationship between social responsibility, focus on long-term gains, idealism, and the ethical perception of earnings management and negative (...) relationship between focus on short-term gains, relativism and the ethical perception of this practice. Implications for the accounting profession as it deals with the issue of earnings management are discussed. (shrink)