. The present research study was designed to extend our knowledge about issues of relevance for business ethics by examining the role of equity sensitivity and perceived organizational trust on employees perceptions of procedural and interactional justice. A model was developed and tested, and results revealed that organizational trust and respect mediated the relationship between an employees equity sensitivity and perceptions of procedural, interactional, and social accounts fairness. A discussion of issues related to perceptions of trust and fairness is presented, (...) as well as recommendations for leaders and future scholarship. (shrink)

The study examines employee, managerial, and ethics officer perceptions regarding their companies codes of ethics. The study moves beyond examining the mere existence of a code of ethics to consider the role that code content and code process (i.e. creation, implementation, and administration) might play with respect to the effectiveness of codes in influencing behavior. Fifty-seven in-depth, semi-structured interviews of employees, managers, and ethics officers were conducted at four large Canadian companies. The factors viewed by respondents to be important with (...) respect to code effectiveness include: provisions of examples; readability; tone; relevance; realism; senior management support; training; reinforcement; living up to standards; reporting requirement; anonymous phone line; communicating violations; and enforcement. The factors found to be potentially important include: justification for provisions; employee involvement; and sign-off requirements. Factors found not to be important include: objectives for the code; prior distribution; testing; and relating ones performance review to compliance with the code. (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.

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.

Business codes are an oft-cited management instrument. But how common are codes among multinationals? And what is their content? In an unprecedented study, the codes of the largest corporations in the world have been collected and thoroughly analyzed. This paper presents the results of that study. Of the two hundred largest companies in the world, 52.5% have a code. More than half of these codes describe company responsibilities regarding quality of products and services (67%), adherence to local laws and regulations (...) (57%) and the protection of the natural environment (56%). Many codes make reference to principles governing stakeholder relations (e.g. transparency (55%), honesty (50%) and fairness (45%)), corporate core values (e.g. teamwork (43%)), appropriate conduct among employees (e.g. discrimination (44%) and intimidation (43%)) and treatment of company property by employees (e.g. conflict of interests (52%), corruption (46%) and fraud (45%)). Monitoring compliance with the code is addressed in 52% of the codes. Based on this content study, three types of codes are distinguished: the stakeholder statute (72%), the values statement (49%) and the code of conduct (46%). The results of this inquiry present a benchmark for the evaluation and development of both individual and international business codes. (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 majority of North American corporations awakened to the need for their own ethical guidelines during the late 1970s and early 1980s, even though modern corporations are subject to a surprising multiplicity of external codes of ethics or conduct. This paper provides an understanding of both internal and external codes through a discussion of the factors behind the development of the codes, an analysis of internal codes and an identification of problems with them.

This article summarizes the multitude of empirical studies that test ethical decision making in business and suggests additional research necessary to further theory in this area. The studies are categorized and related to current theoretical ethical decision making models. The studies are related to awareness, individual and organizational factors, intent, and the role of moral intensity in ethical decision making. Summary tables provide a quick reference for the sample, findings, and publication outlet. This review provides insights for understanding organizational ethical (...) decision constructs, where ethical decision making theory currently stands, and provides insights for future empirical work on organizational ethical decision making. (shrink)

Partly as a result of much recent evidence of business and government crime, a large proportion of major corporations have adopted codes of ethics; government service is also making more use of them. The electrical manufacturing anti-trust conspiracy and 1973–1976 investigation of foreign and domestic bribery were immediate prods. There are also government codes of which the ASPA code is most widely distributed. Corporate codes discuss relations to employees, interemployee relationships, whistle blowing, effect on environment, commercial bribery, insider information, other (...) conflicts of interest, anti-trust, accounting, consumer relations, and political activities. A discussion of use of codes shows partly favorable results. A number of corporation decisions have not yet become a subject of code provisions. Codes will be more useful if the reasons behind each order are stated and team work is encouraged. (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)

A growing public concern regarding ethical business conduct has stimulated marketing research in the ethics area. This study is the first empirical research to investigate the relationship between a code of ethics and sales force behavior. The findings present preliminary evidence that a well communicated code of ethics may be related to ethical sales force behavior. Furthermore, it appears that a sales force that is employed in such an environment can be profiled as being relatively high in job performance and (...) receiving equally high satisfaction from their positions. Suggestions are made for future research and recommendations are offered for marketing practitioners. (shrink)

The use of corporate ethical codes has been increasing. It is argued that the use of ethical codes solely as an instrument in a company’s image management is morally questionable. Therefore, the introduction and use of ethical codes must have the intention of achieving behavioural change or the maintenance of already superior behaviour. This change or superior behaviour may apply to ethics in general, but also to the different sub‐structures of ethics, namely the areas of reliability ethics, human ethics, capability (...) ethics and future ethics. Previous research has, with some exceptions, failed to demonstrate that the introduction of ethical codes has had any behavioural effect. A survey study of Norwegian professionals (N=449) in business is reported here. Using the flexibility that a multivariate analysis provides, the existence or non‐existence of ethical codes, and their influence on attitudinal differences across the four ethical sub‐structures is tested. In the following discussion, three lines of argument are used, drawing on logical, social and managerial approaches, to explain why the codes do exist and yet do not seem to influence the members of a business organisation. Finally, the paper suggests some implications for business practice and for future research. (shrink)

The dramatic increase in the number of corporate ethical codes over the past 20 years has been attributed to the Watergate scandal and the Foreign Corrupt Practices Act. Ethical codes differ somewhat from profesional codes and mission statements; yet the terms are frequently interchanged and often confused in the literature. Ethical code studies are reviewed in terms of how codes are communicated to employees and whether implications for violating codes are discussed. Most studies use content analysis to determine subjects in (...) codes. Little information is available about how codes are communicated, whether they are accepted and used by employees, and whether they affect employee/corporate behavior. More research on ethical codes is needed to answer some of these questions. (shrink)

The use of corporate ethical codes has been increasing. It is argued that the use of ethical codes solely as an instrument in a company’s image management is morally questionable. Therefore, the introduction and use of ethical codes must have the intention of achieving behavioural change or the maintenance of already superior behaviour. This change or superior behaviour may apply to ethics in general, but also to the different sub‐structures of ethics, namely the areas of reliability ethics, human ethics, capability (...) ethics and future ethics. Previous research has, with some exceptions, failed to demonstrate that the introduction of ethical codes has had any behavioural effect. A survey study of Norwegian professionals in business is reported here. Using the flexibility that a multivariate analysis provides, the existence or non‐existence of ethical codes, and their influence on attitudinal differences across the four ethical sub‐structures is tested. In the following discussion, three lines of argument are used, drawing on logical, social and managerial approaches, to explain why the codes do exist and yet do not seem to influence the members of a business organisation. Finally, the paper suggests some implications for business practice and for future research. (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)

. The ability to enforce the provisions of a code of conduct influences whether the code is effective in shaping behavior. Enforcement relies in part on the willingness of organization members to report violations of the code, but research from the business and educational environment suggests that fewer than half of those who observe code violations follow their organizations procedures for reporting them. Based on a review of the literature in the business and educational environments, and a survey of 3605 (...) students at a mid-sized comprehensive university, this paper attempts to make conceptual sense of the non-reporting phenomenon. We present a conceptual framework based on four distinct factors which we have labeled: (1) factual non-responsibility; (2) moral non-responsibility; (3) consequential exoneration; and, (4) functional exoneration. Each of these factors suggest a different remedial strategy as well as provide a theoretical foundation for future research. Testable propositions for future research are developed, and some implications for organization leaders are discussed. (shrink)

Codes of ethics and conduct have become common in UK organisations. This paper explores how such codes are understood and responded to by those whom the codes seek to influence. The study is an interpretative one, based on interview material, in which a dialectical pattern is seen in employees’ reactions to codes. Initial contradictions are found in codes of ethics (which claim to give employees space in which to exercise their integrity, but simultaneously are seen as impugning employees’ moral status) (...) and in codes of conduct (which require a loyal adherence to rules that interferes with wider loyalties). These tensions create perceptions of a two‐tier system in organisations in which core employees are subject to codes of ethics that are loosely applied, but non‐core staff are subject to codes of conduct that are strictly applied. However, even core staff are aware of a dialectical contradiction in their position. They believe that loyalty to the organisation is the price they pay for being allowed freedom of integrity by their organisations, but that the price they have to pay for showing integrity may be breaking faith with their organisations. This chiasmus of integrity and loyalty represents a difficulty for the project of improving standards of corporate citizenship. The use of this trope and other rhetorical figures to exemplify processes of understanding and interpretation in organisations is discussed. (shrink)

Efforts to institutionalize ethics in corporations have been discussed without first addressing the desirability of norm conformity or the possibility that the means used to elicit conformity will be coercive. This article presents a theoretical context, grounded in models of social control, within which ethics initiatives may be evaluated. Ethics initiatives are discussed in relation to variables that already exert control in the workplace, such as environmental controls, organizational controls, and personal controls.

The authors review the empirical literature in order to assess which variables are postulated as influencing ethical beliefs and decision making. The variables are divided into those unique to the individual decision maker and those considered situational in nature. Variables related to an individual decision maker examined in this review are nationality, religion, sex, age, education, employment, and personality. Situation specific variables examined in this review are referent groups, rewards and sanctions, codes of conduct, type of ethical conflict, organization effects, (...) industry, and business competitiveness. The review identifies the variables that have been empirically tested in an effort to uncover what is known and what we need to know about the variables that are hypothesized as determinants of ethical decision behavior. (shrink)

Although detailed studies of code adoption and impact have already been conducted in Hong Kong, there has as yet been no critical analysis of why there has been a gap between the normative and positive factors underlying codes of ethics in Hong Kong. The purpose of this paper is to consider why Hong Kong companies adopting codes of ethics have failed to adhere closely to the best practice prescriptions for code adoption when it would likely be in their best interests (...) to do so. This paper identifies some cultural factors, such as power distance and traditional Legalist assumptions approximating Theory X, that appear to be involved in creating this gap, and offers some practical recommendations for closing the gap, which are presented in the form of hypotheses for further testing. (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)

More and more organisations formulate a code of conduct in order to stimulate responsible behaviour among their members. Much time and energy is usually spent fixing the content of the code but many organisations get stuck in the challenge of implementing and maintaining the code. The code then turns into nothing else than the notorious "paper in the drawer", without achieving its aims. The challenge of implementation is to utilize the dynamics which have emerged from the formulation of the code. (...) This will support a continuous process of reflection on the central values and standards contained in the code. This paper presents an assessment method, based on the EFQM model, which intends to support this implementation process. (shrink)

Codes of ethics and conduct have become common in UK organisations. This paper explores how such codes are understood and responded to by those whom the codes seek to influence. The study is an interpretative one, based on interview material, in which a dialectical pattern is seen in employees’ reactions to codes. Initial contradictions are found in codes of ethics and in codes of conduct . These tensions create perceptions of a two‐tier system in organisations in which core employees are (...) subject to codes of ethics that are loosely applied, but non‐core staff are subject to codes of conduct that are strictly applied. However, even core staff are aware of a dialectical contradiction in their position. They believe that loyalty to the organisation is the price they pay for being allowed freedom of integrity by their organisations, but that the price they have to pay for showing integrity may be breaking faith with their organisations. This chiasmus of integrity and loyalty represents a difficulty for the project of improving standards of corporate citizenship. The use of this trope and other rhetorical figures to exemplify processes of understanding and interpretation in organisations is discussed. (shrink)

Codes of ethics are being increasingly adopted in organizations worldwide, yet their effects on employee perceptions and behavior have not been thoroughly addressed. This study used a sample of 613 management accountants drawn from the United States to study the relationship between corporate and professional codes of ethics and employee attitudes and behaviors. The presence of corporate codes of ethics was associated with less perceived wrongdoing in organizations, but not with an increased propensity to report observed unethical behavior. Further, organizations (...) that adopted formal codes of ethics exhibited value orientations that went beyond financial performance to include responsibility to the commonweal. In contrast to corporate codes of ethics, professional codes of ethical conduct had no influence on perceived wrongdoing in organization nor these codes affect the propensity to report observed unethical activities. (shrink)

In the past ten years, many European companies organised into subcontracting networks have decided to adopt codes of conduct to regulate labour relations and to ensure the respect of fundamental social rights. This paper first determines the context and the issues to be addressed by codes of conduct within networks of companies, and second analyses the terms under which they can be implemented. The paper argues that codes of conduct can complement the standards developed by States, the European Union or (...) the social partners, but that steps should be taken in order to avoid that these texts replace the existing labour law. (shrink)

The purpose of this present research is to expand upon the foundation that codes of ethics are more useful guides to managers in their behavior and decision-making when managers are more familiar with code content and intentions. We explore whether the impact of code familiarity on code usefulness differs: (a) under varying conditions of turbulence and (b) between persons with relativist versus idealist personal values. Data have been collected from a sample of 1700 executives in member companies of the U.S. (...) Direct Selling Association, and responses were received from 286 (16.8% returned). Perceptions of ethics code familiarity and usefulness decline as business turbulence increases. The decline in familiarity/usefulness was more pronounced for managers with a relativistic ethical orientation. (shrink)

. Recent corporate scandals have focused the attention of a broad set of constituencies on reforming corporate governance. Boards of directors play a leading role in corporate governance and any significant reforms must encompass their role. To date, most reform proposals have targeted the legal, rather than the ethical obligations of directors. Legal reforms without proper attention to ethical obligations will likely prove ineffectual. The ethical role of directors is critical. Directors have overall responsibility for the ethics and compliance programs (...) of the corporation. The tone at the top that they set by example and action is central to the overall ethical environment of their firms. This role is reinforced by their legal responsibilities to provide oversight of the financial performance of the firm. Underlying this analysis is the critical assumption that ethical behavior, especially on the part of corporate leaders, leads to the best long-term interests of the corporation. We describe key components of a framework for a code of ethics for corporate boards and individual directors. The proposed code framework is based on six universal core ethical values: (1) honesty; (2) integrity; (3) loyalty; (4) responsibility; (5) fairness; and (6) citizenship. The paper concludes by suggesting critical issues that need to be dealt with in firm-based codes of ethics for directors. (shrink)

A great deal of interest in codes of ethics exists in both the business community and the academic community. Within the academic community, this interest has given rise to a number of studies of codes of ethics. Many of these studies have focused on the content of various codes.One important way the study of codes of ethics can be advanced is by applying formal tools of analysis to codes of ethics. An understanding of important dimensions that may differ across codes (...) of ethics, a common terminology to describe these dimensions, and a means to measure these dimensions will facilitate applying such tools. They will also facilitate discussion, enable comparisons, and advance our understanding of codes of ethics. The present paper describes a classification scheme to use in studying codes of ethics. This scheme uses six important dimensions to distinguish among codes of ethics: length, focus, level of detail, shape, thematic content, and tone. The paper also introduces metrics that can be used to measure the dimensions. (shrink)

There is increasing public interest in understanding the nature of corporate ethics due to the knowledge that unethical decisions and activities frequently undermine the performance and abilities of many organizations. Of the current literature found on the topic of ways organizations can influence ethical behavior, a majority is found on the issue of corporate codes of ethics.Most discussions on codes of ethics evaluate the contents of the codes and offer opinions on their wording, content, and/or value. Unfortunately, very little research (...) has been devoted towards discovering whether they are effective in promoting ethical decision-making behavior. Thus, due to the lack of empirical research on this particular topic, this paper attempts to further address this issue. (shrink)

This book contains a cohesive overview of the most important theories and insights in the field of business ethics. At the same time, it further tailors these theories to the situation in which organizations function, presenting criteria that can be used to measure, assess, improve and report on corporate integrity.

The article protests against the usage of ethical codes by business organisations. It asserts that professionals are in a different situation to that of employees; and that with the latter ethical codes are used by management to ensure compliance and are devoid of ethical content. Ethical codes it is argued are part of management's control system in a time of flatter organisational structures with a far wider span of control. It is also asserted that the ambitions of some to utilise (...) ethical codes so that the business organisation is able to engender societal change is dangerous and likely, if successful, to return us to an age which we could not seriously desire to re-visit. (shrink)

Information and communications technology (ICT) is now used more by non-IT professional end-users than by IT professionals. A survey of 125 London-based organisations found that the majority had instituted codes of conduct designed to govern the use of ICT by their employees. However, the primary purpose of adopting such codes was to ensure the security and efficient operation of the organisation's information systems rather than for wider ethical considerations. Hence, few of the codes of conduct addressed issues relating to the (...) collection, storage and dissemination of data about individuals (personal data); this was especially the case with codes emanating from IT departments rather than senior management. In general, codes of conduct were found to be ineffective in influencing end-user behaviour in the organisations surveyed. Codes of conduct are a means by which organisations seek to exercise power, control and ownership, but their effectiveness is compromised by the nature of ICT itself as well as the attitudes of employees. The failure of well-publicised ethical policies to influence use of ICT by business studies students – the managers of tomorrow – suggests that these tensions are likely to remain unresolved. (shrink)