The ethics of organizations has received much attention in recent years. This raises the question of whether the ethics of organizations has also improved. In 1999, 2004, and 2008, a survey was conducted of 12,196 U.S. managers and employees. The results show that the ethical culture of organizations improved in the period between 1999 and 2004. Between 2004 and 2008 unethical behavior and its consequences declined and the scope of ethics programs expanded while ethical culture showed no significant improvement during (...) the same period. The article concludes with a discussion of the implications of these findings for future research and practice. (shrink)

This review summarizes and critiques the empirical ethical decision-making literature from 1996–2003. One hundred and seventy-four articles were published in top business journals during this period. Tables are included that summarize the findings by dependent variable – awareness, judgment, intent, and behavior. We compare this review with past reviews in order to draw conclusions regarding trends in the ethical decision-making literature and to surface directions for future research.

Codes of conduct are viewed here as a community’s attempt to communicate its expectations and standards of ethical behavior. Many organizations are implementing codes, but empirical support for the relationship between such codes and employee conduct is lacking. We investigated the long term effects of a collegiate honor code experience as well as the effects of corporate ethics codes on unethical behavior in the workplace by surveying alumni from an honor code and a non-honor code college who now work in (...) business. We found that self-reported unethical behavior was lower for respondents who work in an organization with a corporate code of conduct and was inversely associated with corporate code implementation strength and embeddedness. Self-reported unethical behavior was also influenced by the interaction of a collegiate honor code experience and corporate code implementation strength. (shrink)

This paper argues that moral thinking is an essential management capability which strengthens organizations and contributes to theirperformance in the marketplace. The paper explains what moral thinking is, and addresses the most common reasons for considering it inappropriate or irrelevant to managerial practice. The argument provides a compelling rationale for the corporate ethics initiatives undertaken in recent years.

Abstract:This field survey focused on two constructs that have been developed to represent the ethical context in organizations: ethical climate and ethical culture. We first examined issues of convergence and divergence between these constructs through factor analysis and correlational analysis. Results suggested that the two constructs are measuring somewhat different, but strongly related dimensions of the ethical context. We then investigated the relationships between the emergent ethical context factors and an ethics-related attitude (organizational commitment) and behavior (observed unethical conduct) for (...) respondents who work in organizations with and without ethics codes. Regression results indicated that an ethical culture-based dimension was more strongly associated with observed unethical conduct in code organizations while climate-based dimensions were more strongly associated with observed unethical conduct in non-code organizations. Ethical culture and ethical climate-based factors influenced organizational commitment similarly in both types of organizations. Normative implications of the study are discussed, as are implications for future theorizing, research and management practice. (shrink)

Abstract:Organizational justice and injustice are widely noted influences on employees’ ethical behavior. Corporate ethics programs also raise issues of justice; organizations that fail to “follow-through” on their ethics policies may be perceived as violating employees’ expectations of procedural and retributive justice. In this empirical study of four large corporations, we considered employees’ perceptions of general organizational justice, and their perceptions of ethics program follow-through, in relation to unethical behavior that harms the organization, and to employees’ willingness to help the organization (...) by reporting ethical problems and issues to management. Results show that when employees perceive general organizational justice and ethics program follow-through, there is less unethical behavior and greater willingness to report problems. General justice and ethics program follow-through also interact with each other, showing that the impact of ethics initiatives is influenced by the organizational context. (shrink)

Abstract:The literature contains many recommendations, both explicit and implicit, that suggest how an ethics program ought to be designed. While we recognize the contributions of these works, we also note that these recommendations are typically based on either social scientific theory or data and as a result they tend to discount the moral aspects of ethics programs. To contrast and complement these approaches, we refer to a theory of the right to identify the characteristics of an effective ethics program. We (...) draw from Kant’s ethical theory to identify three guiding principles of a moral ethics program and then apply those principles to the specific components of ethics programs as discussed in the Federal Sentencing Guidelines. Doing so provides insights as to how an ethics program ought to be designed from a moral point of view and sparks discussion of the moral aspects of ethics programs. (shrink)

Although Business Ethics has become a topic of wide discussion in both academia and the corporate world, questions remain as how to present ethical issues in a manner that will effectively influence the decisions and behavior of business employees. In this paper we argue that the Federal Sentencing Guidelines (FSG) offer a unique opportunity for bridging the gap between the theory and practice of business ethics. We first explain what the FSG are and how they apply to organizations. We then (...) show how discussions of the FSG might be used in business ethics courses in a way that is both theoretically sound and practically applicable. Finally, we show how the requirements of the FSG can be used by companies to develop effective ethical compliance programs. As such, we maintain that the FSG provide a powerful heuristic tool for the teaching and training of business ethics. (shrink)

This article details the personal involvement of the author in the early stages of the infamous Pinto fire case. The paper first presents an insider account of the context and decision environment within which he failed to initiate an early recall of defective vehicles. A cognitive script analysis of the personal experience is then offered as an explanation of factors that led to a decision that now is commonly seen as a definitive study in unethical corporate behavior. The main analytical (...) thesis is that script schemas that were guiding cognition and action at the time precluded consideration of issues in ethical terms because the scripts did not include ethical dimensions. (shrink)

After years of debate over the importance of ethical conduct in organizations, the federal government has decided to institutionalize ethics as a buffer to prevent legal violations in organizations. The key requirements of the Federal Sentencing Guidelines (FSG) are outlined, and suggested actions managers should adopt to improve ethical compliance are presented. An effective compliance program is more a process and commitment than a specific blueprint for conduct. The organization has the responsibility to create an organizational climate to reduce misconduct. (...) The adoption of a FSG compliance program has the potential to substantially lessen organizational penalties if there is due diligence to prevent misconduct. Federal courts determine the effectiveness of an FSG program after a violation occurs. (shrink)

An integrity-based approach to ethics management combines a concern for the law with an emphasis on managerial responsibility for ethical behavior. Though integrity strategies may vary in design and scope, all strive to define companies’ guiding values, aspirations, and patterns of thought and conduct. When integrated into the day-to-day operations of an organization, such strategies can help prevent damaging ethical lapses while tapping into powerful human impulses for moral thought and action. Then an ethical framework becomes no longer a burdensome (...) constraint within which companies must operate, but the governing ethos of an organization. (shrink)

ABSTRACT:Despite a significant increase in whistle-blowing practices in work organizations, we know little about what differentiates whistle-blowers from those who observe a wrongdoing but chose not to report it. In this review article, we first highlight the arenas in which research on whistle-blowing has produced inconsistent results and those in which the findings have been consistent. Second, we propose that the adoption of an identity approach will help clarify the inconsistent findings and extend prior work on individual-level motives behind whistle-blowing. (...) Third, we argue that the integration of the whistle-blowing research with that on ethics programs will aid in systematically expanding our understanding of the situational antecedents of whistle-blowing. We conclude our review by discussing new theoretical and methodological arenas of research in the domain of whistle-blowing. (shrink)

Senior managers are important to the successful management of ethics in organizations. Therefore, their perceptions of organizational ethics are important. In this study, we propose that senior managers are likely to have a more positive perception of organizational ethics than lower level employees do largely because of their managerial role and their corresponding identification with the organization and need to protect the organization’s image as well as their own identity. By contrast, lower level employees are more likely to be cynical (...) about the organization’s ethics. In order to compare senior managers’ and lower level employees’ perceptions of ethics in the organization, we surveyed randomly selected senior managers and lower level employees in three firms. We found that perceptions of ethics in the organization differed predictably across levels, with senior managers’ perceptions being significantly more positive and lower level employees’ perceptions being more negative. Implications for practice and research are discussed. (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)

This paper investigates the effect of the countervailing forces within organizations of formal systems that direct employees toward ethical acts and informal systems that direct employees toward fraudulent behavior. We study the effect of these forces on deception, a key component of fraud. The results provide support for an interactive effect of these formal and informal systems. The effectiveness of formal systems is greater when there is a strong informal “push” to do wrong; conversely, in the absence of a strong (...) push to do wrong, the strength of formal systems has little impact on fraudulent behavior. These results help to explain why the implementation of formal systems within organizations has been met with mixed results and identifies when formal systems designed to promote ethical behavior will be most efficacious. (shrink)

ABSTRACT:We analyze corporate ethics programs as control systems, arguing that how control is exercised may have pernicious consequences and be morally problematic. In particular, the control cultivated by ethics programs may weaken employees’ ability and motivation to exercise their own moral judgment, especially in novel situations. We develop this argument first by examining how organization theorists analyze control as an instrument of management coordination, and by addressing the political implications of control. We discuss coercive and enabling control as variations that (...) help account for the distinction between compliance-based ethics programs and values-based ethics programs. We then explore three potential drawbacks of ethics programs: the specter of indoctrination, a politicization of ethics, and an atrophy of competence. Ethics programs that rely on coercive control may undermine their own effectiveness at stemming misbehavior. (shrink)

Abstract:Previous research has identified multiple approaches to the design and implementation of corporate ethics programs (Paine, 1994; Weaver, Treviño, and Cochran, in press b; Treviño, Weaver, Gibson, and Toffler, in press). This field survey in a large financial services company investigated the relationships of the values and compliance orientations in an ethics program to a diverse set of outcomes. Employees’ perceptions that the company ethics program is oriented toward affirming ethical values were associated with seven outcomes. Perceptions of a compliance (...) orientation were associated with four of these outcomes. The interaction of values and compliance orientations was associated with employees’ willingness to report misconduct. In general, a values orientation makes a greater unique contribution to the measured outcomes when compared to a compliance orientation. (shrink)

Abstract:We analyzed data from a survey of employees of a large military base in order to assess possible differences in the whistle-blowing process due to type of wrongdoing observed. Employees who observed perceived wrongdoing involving mismanagement, sexual harassment, or unspecified legal violations were significantly more likely to report it than were employees who observed stealing, waste, safety problems, or discrimination. Further, type of wrongdoing was significantly related to reasons given by employees who observed wrongdoing but did not report it, across (...) all forms of wrongdoing. However, the primary reason that observers did not report it was that they thought nothing could be done to rectify the situation. Finally, type of wrongdoing was significantly related to the cost of the wrongdoing, the quality of the evidence about the wrongdoing, and the comprehensiveness of retaliation against the whistle-blower. These findings suggest that type of wrongdoing makes a difference in the whistle-blowing process, and it should be examined in future research. (shrink)

Putting measures in place to prevent wrongdoing in organizations is important, but detecting and correcting wrongdoing are also vital. Employees who detect wrongdoing should, therefore, be encouraged to respond in a manner that supports corrective action. This article examines the influence of the ethical culture of organizations on employee responses to observed wrongdoing. Different dimensions of ethical culture are related to different types of intended responses. The findings show that several dimensions of ethical culture were negatively related to intended inaction (...) and external whistleblowing and positively related to intended confrontation, reporting to management, and calling an ethics hotline. (shrink)

In this study, we test the interactive effect on ethical decision-making of (1) personal characteristics, and (2) personal expectanciesbased on perceptions of organizational rewards and punishments. Personal characteristics studied were cognitive moral developmentand belief in a just world. Using an in-basket simulation, we found that exposure to reward system information influenced managers’ outcome expectancies. Further, outcome expectancies and belief in a just world interacted with managers’ cognitive moral development to influence managers’ ethical decision-making. In particular, low-cognitive moral development managers who (...) expected that their organization condoned unethical behavior made less ethical decisions while high cognitive moral development managers became more ethical in this environment. Low cognitive moral development managers also behaved less ethically when their belief in a just world was high. (shrink)

This paper takes a critical look at the empirical studies assessing the effectiveness of teaching courses in business and society and business ethics. It is generally found that students' ethical awareness or reasoning skills improve after taking the courses, yet this improvement appears to be short-lived. The generalizability of these findings is limited due to the lack of extensive empirical research and the inconsistencies in research design, empirical measures, and statistical analysis across studies. Thus, recommendations are presented and discussed for (...) improving the generalizability and sophistication of future research efforts in this area. (shrink)

Can companies be identified by how ethical they are? The concept of organizational culture suggests that organizations have identifiable cultures of which ethics are a part. By definition culture is the shared beliefs of an organization's members, hence the ethical culture of an organization would be reflected in the beliefs about the ethics of an organization which are shared by its members. Thus, it is logical to conceptualize the ethics of different organizations as existing on a continuum bounded at one (...) end by unethical companies and at the other, highly ethical companies. This research assesses the efficacy of the existing measure of organizational ethical culture for identifying the ethical status of organizations on a this continuum. Results suggest that the Ethical Culture Questionnaire designed by Trevino, Butterfield and McCabe (1995) measures individual perceptions regarding organizational ethics but does not identify shared beliefs about an organizationÕs ethical culture. (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.

One of the main objectives of an ethics program is to improve the ethical culture of an organization. To date, empirical research treats at least one of these concepts as a one-dimensional construct. This paper demonstrates that by conceptualizing both constructs as multi-dimensional, a more in-depth understanding of the relationship between the two concepts can be achieved. Through the employment of the Corporate Ethical Virtues Model, eight dimensions of ethical culture are distinguished. Nine components of an ethics program are identified. (...) To assess the relationship between ethics programs and ethical culture, a survey was conducted of 4,056 members of the U. S. working population. The results show that the relationships between the components of an ethics program and the dimensions of ethical culture differ in strength, nature, and significance. Implications for research and practice are discussed. (shrink)

Ethical theory in business ethics texts lacks sufficient specificity to be used as a tool of analysis. The result is that business faculty do not see the course in business ethics as helpful to their students, and the students do not see the course as helpful in their careers.A further difficulty is the inclusion of material which is not seen by business faculty, as appropriate or germane to the practice of decision-making. Issues such as the legitimacy of the corporation, or (...) capitalism versus Marxism, are of Iittle interest or help to the person in business.Finally, the text cases are too often of a policy nature, and do not deal with issues faced by a majority of those in business. The result is the lack of engaging the moral imagination of the students.Unless the course is redesigned so that it is seen by business faculty as more relevant, it will continue to be required by only a small number of business programs. (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)

Senior managers are important to the successful management of ethics in organizations. Therefore, their perceptions of organizational ethics are important. In this study, we propose that senior managers are likely to have a more positive perception of organizational ethics than lower level employees do largely because of their managerial role and their corresponding identification with the organization and need to protect the organization’s image as well as their own identity. By contrast, lower level employees are more likely to be cynical (...) about the organization’s ethics. In order to compare senior managers’ and lower level employees’ perceptions of ethics in the organization, we surveyed randomly selected senior managers and lower level employees in three firms. We found that perceptions of ethics in the organization differed predictably across levels, with senior managers’ perceptions being significantly more positive and lower level employees’ perceptions being more negative. Implications for practice and research are discussed. (shrink)

This empirical study of Fortune 1000 firms assesses the degree to which those firms have adopted various practices associated with corporate ethics programs. The study examines the following aspects of formalized corporate ethics activity: ethics-oriented policy statements; formalization of management responsibilities for ethics; free-standing ethics offices; ethics and compliance telephone reporting/advice systems; top management and departmental involvement in ethics activities; usage of ethics training and other ethics awareness activities; investigatory functions; and evaluation of ethics program activities. Results show a high (...) degree of corporate adoption of ethics policies, but wide variability in the extent to which these policies are implemented by various supporting structures and managerial activities. In effect, the vast majority of firms have committed to the low cost, possibly symbolic side of ethics management (e.g., adoption of ethics codes and policies, etc.). But firms differ substantially in their efforts to see that those policies or codes actually are put into practice. (shrink)

This field survey in a fast food restaurant setting tested the hypothesized influences of two social context variables (role responsibility and interests of group members) and justice evaluations (distributive, procedural, and retributive) on respondents' inclination to report theft and their theft reporting behavior. The results provided mixed support for the hypotheses. Inclination to report a peer for theft was associated with role responsibility, the interests of group members, and procedural justice perceptions. Actual reporting behavior was associated with the inclination to (...) report and with retributive justice evaluations. Implications for future research and for management are discussed. (shrink)