The Study of the Relations among Ethical Considerations, Family Management and Organizational Performance in Corporate Governance

Corporate governance is increasingly becoming an issue of global concern, not least because we are more and more living in a corporate world that transcends international boundaries. The main purpose and motivation of this study is to determine how the international community should motivate businesses in fostering exemplary corporate governance, therefore eliminating obstacles to ethically exemplary behavior. The empirical approach utilized here has been applied to 161 businesses, both listed and over-the-counter (OTC) companies, with the results indicating that ethical considerations, corporate governance and organizational performance are inextricably linked and, to an extent, demonstrably proportional. This study also indicates a major finding that family management is a significant mediating variable of the ethical considerations of corporate governance and organizational performance. Finally, this study has developed an operational model of ethical considerations of corporate governance as a consultancy aid for businesses that wish to implement and/or boost their performance in respect to corporate governance.     

A Personalistic Appraisal of Maslow’s Needs Theory of Motivation: From “Humanistic” Psychology to Integral Humanism

Abraham Maslow’s needs theory is one of the most influential motivation theories in management and organizational behavior. What are its anthropological and ethical presuppositions? Are they consistent with sound business philosophy and ethics? This paper analyzes and assesses the anthropological and ethical underpinnings of Maslow’s needs theory from a personalistic framework, and concludes that they are flawed. Built on materialistic naturalism, the theory’s “humanistic” claims are subverted by its reductionist, individualistic approach to the human being, which ends up in a needs-based ethics that understands goodness, virtue, and rights in instinctual, subjectivistic, and relativistic terms. Its moral imperative, “Be yourself!,” is either the materialistic fiat of genetic drives or the voluntaristic command of unbridled will. Significant implications for business educators, managers, and organizations are discussed, along with recommendations. Managerial theories and approaches that reduce personality to individuality are inconsistent with proper anthropological and ethical business principles. Adopting those individualistic theories may ultimately undermine organizational effectiveness, and the very essence of business as human activity and of management as human calling. Instead, personalistic anthropology and virtue ethics, rooted in Aristotelian–Thomistic thought, soundly account for properly human nature and the good life. Business educators and practitioners are encouraged to embrace this integral, truly humanistic framework for motivation, and management theory and practice.     

Bridging Ethics and Self Leadership: Overcoming Ethical Discrepancies Between Employee and Organizational Standards

In spite of extensive study and efforts to improve business ethics and increase corporate social responsibility, a quick review of almost any business publication will show that breaches of ethics are a common occurrence in the business community. In this paper we explore reasons for potential discrepancies or gaps between organizational and individual ethical standards, the consequences of such discrepancies, and possible methods of reducing the detrimental effects of these differences. The concept of self-leadership, as constructed through social learning theory is examined, and shown to be a potentially valuable tool for employees' use in making reasoned decisions in varying organizational ethical climates. Specifically, the authors will show how the practice of self-leadership can be employed as an important means to improve moral action within the firm.     

Principal Theory and Principle Theory: Ethical Governance from the Follower’s Perspective

Organizational governance has historically focused around the perspective of principals and managers and has traditionally pursued the goal of maximizing owner wealth. This paper suggests that organizational governance can profitably be viewed from the ethical perspective of organizational followers – employees of the organization to whom important ethical duties are also owed. We present two perspectives of organizational governance: Principal Theory that suggests that organizational owners and managers can often be ethically opportunistic and take advantage of employees who serve them and Principle Theory that focuses on guiding principles that are sometimes taken too far in organizations. In introducing these two new organizational governance perspectives, we offer insights into the value of rethinking ethical duties owed to organizational followers. Cam Caldwell received his Ph.D. from Washington State University where he was a Thomas S. Foley Graduate Fellow. Dr. Caldwell is Editor of the Academy of Management Ethics website and a member of the Academy’s Ethics Committee. His research is primarily in the areas of ethical leadership, organizational governance, and developing organizational trust. Prior to obtaining his Ph.D., Caldwell worked for 25 years as a city manager, human resource director, and management consultant. Ranjan Karri is Assistant Professor of Management at Bryant College. He received his Ph.D. in strategic management from Washington State University. His research interests include corporate and business strategies, ethical leadership and corporate governance. Pamela Vollmar is an undergraduate student at the University of Houston – Victoria majoring in Business Management. She has worked for 25 years as an electrical specialist for a major engineering firm.     

Unpacking the Ethical Product

Acknowledging the increasing attention in the literature devoted to the incorporation of ethical considerations into consumers' purchase decisions, this paper explores the notion of an ethical product. It is argued that ethical issues have long been involved in consumers' product evaluations, but that there has been little academic investigation of ethics in terms of product concepts and theories. Ethics are thus examined in the context of the augmented product concept, and two dimensions of ethical augmentation are identified: direction and content. These dimensions are set out and discussed at some length, and then they are used to construct an ethical product matrix. It is shown how this could be used to provide structure and coherence to examinations of the perceived ethics of any given product offering. The implications of the analysis offered in the paper are discussed, and a number of limitations of the ethical product notion are identified. Finally some conclusions and directions for future research are suggested.     

Impact of Managerial Dependencies on Ethical Behavior

This study explores if managerial dependencies and organizational independence impact ethical behavior of employees. Survey data was collected from 203 employees working for three hospitals in Midwestern and Northwestern United States. Managerial dependencies like specialized expertise, political connections, and performance visibility significantly impacted ethical behavior. Organizational independence and ethical behavior of peers also had a significant impact on ethical behavior. Implications of this study for researchers and practitioners are discussed.     

Employee Reactions to Internet Monitoring: The Moderating Role of Ethical Orientation

Research has demonstrated that employee reactions to monitoring systems depend on both the characteristics of the monitoring system and how it is implemented. However, little is known about the role individual differences may play in this process. This study proposes that individuals have generalized attitudes toward organizational control and monitoring activities. We examined this argument by assessing the relationship between employees’ baseline attitudes toward a set of monitoring and control techniques that span the employment relationship. We further explore the effects of employees’ generalized attitudes toward monitoring and their individual ethical orientations on their attitudinal reactions to an Internet monitoring system implemented in their workplace. Results of a longitudinal study indicate that as expected, prior beliefs and ethical orientation interact to affect employees’ reactions to monitoring systems. Implications for research and practice are discussed.     

Systemic Leadership and the Emergence of Ethical Responsiveness

The author of this paper argues that the responsibility to nurture and encourage a relationally responsive ethical attitude among the members of an organizational system is shared by all who participate in it. In the dynamic environment of a complex adaptive organizational system where it is impossible to anticipate and legislate for every potential circumstantial contingency, creating and sustaining relationships of trust has to be a systemic capacity of the entire organization. Leadership is socially constructed, as the need for it arises within the complex interactions between individuals and groups within organizations, and can therefore not be described as a set of traits or behaviors possessed by only certain individuals who occupy positions of authority. If the sharing of this kind of relational responsiveness to the everyday realities of organizational life is to be properly understood, it is important to consider it in its concrete institutional manifestations. The last section of this paper therefore explores how an organization, in which leadership is understood in relational terms and is shared by all, looks and functions.     

The Impact of Ethics Education on Reporting Behavior

We examine the impact of an ethics education program on reporting behavior using two groups of students: fourth year Masters of Accounting students who just completed a newly instituted ethics education program, and fifth year students in the same program who did not receive the ethics program. In an experiment providing both the opportunity and motivation to misreport for more money, we design two social condition treatments – anonymity and public disclosure – to examine whether or to what extent ethical values are internalized by students. We find that when participants are anonymous, misreporting rates are nearly the same regardless of ethics program participation. However, when their reporting behavior is made public to the cohort, participants who completed the ethics program misreported at significantly lower rates than those who did not receive the ethics program. The results suggest that ethics education does not necessarily result in internalized ethical values, but it can impact ethical behavior.     

The Link Between Organizational Ethics and Job Satisfaction: A Study of Managers in Singapore

Based on a survey of 237 managers in Singapore, three measures of organizational ethics (namely, top management support for ethical behavior, the organization's ethical climate, and the association between ethical behavior and career success) are found to be associated with job satisfaction. The link between organizational ethics and job satisfaction is argued from Viswesvaran et al.'s (1998) organizational justice and cognitive dissonance theories. The findings imply that organizational leaders can favorably influence organizational outcomes by engaging in, supporting and rewarding ethical behavior.     

Organization-Harm vs. Organization-Gain Ethical Issues: An Exploratory Examination of the Effects of Organizational Commitment

The existing literature on the relationship between organizational commitment and ethical decision making suggests that ethical decision makers with higher organizational commitment are less likely to engage in ethically questionable behaviors. The ethical behaviors previously studied in an organizational commitment context have been organization-harm issues in which the organization was harmed and the individual benefited (e.g., overstating an expense report). There is another class of ethical issues in an organizational context, however. These other issues, termed organization-gain issues, focus on the organization obtaining a benefit while outsiders, such as investors, are harmed (e.g., overstating reported revenue). We explore whether individuals with higher organizational commitment are more or less likely to engage in questionable behaviors that benefit the organization. Results of our study indicate that individuals with higher organizational commitment are less likely to engage in ethically questionable behaviors, regardless of whether the behaviors are organization-harm or organizational-gain issues.     

Causal Effects of Regulatory, Organizational and Personal Factors on Ethical Sensitivity

Prior researchers have studied individual components of a theoretical decision-making model. This paper presents the results of a more complete study of the model components and presents limited support of theory. The study examines the relative importance of regulatory, organizational, and personal constructs on an individual's ethical sensitivity. Auditors from the major international accounting firms, located in two southeastern cities, are surveyed. Structural equation modeling is used to allow for the simultaneous evaluation of the three constructs of interest. The results indicate that the regulatory and organizational constructs are negatively correlated with the personal experience construct. The three constructs are not significant causal factors on ethical sensitivity. This result may be due to the manner in which ethical sensitivity is typically measured or may indicate that the complexity of the ethical decision-making process is not fully captured in the theoretical models. Thus, the models suggested in the prior literature and the results presented in prior studies of the individual components may need to be reconsidered.     

How Strong are the Ethical Preferences of Senior Business Executives?

How do senior business executives rank their preferences for various ethical principles? And how strongly do the executives believe in these principles? Also, how do these preference rankings relate to the way the executives see the future (wherein business decisions play out)? Research on these questions may provide us with an appreciation of the complexities of ethical behavior in management beyond the traditional issues concerning ethical decision-making in business. Based on a survey of 585 vice presidents of U.S. businesses it was found that: (1) there is a distinct set of principles of ethical conduct that is considered favorable as opposed to another set considered unfavorable among a comprehensive list of 14 ethical principles; (2) the executives believed overwhelmingly that their own individual ethical preferences are better than those of other executives; (3) the strength of their preferences for ethical principles is associated with whether the executives are relatively near-future oriented or more distant-future oriented; and (4), there are very few significant differences in terms of gender, age, education level, private/public education, prestigious/other schools, business/non-business academic backgrounds, and length of job experience. Implications of these findings are discussed.     

The Aftermath of Organizational Corruption: Employee Attributions and Emotional Reactions

Employee attributions and emotional reactions to unethical behavior of top leaders in an organization recently involved in a highly publicized ethics scandal were examined. Participants (n = 76) from a large southern California government agency completed an ethical climate assessment. Secondary data analysis was performed on the written commentary to an open-ended question seeking employees’ perceptions of the ethical climate. Employees attributed the organization’s poor ethical leadership to a number of causes, including: lack of moral reasoning, breaches of trust, hypocrisy, and poor ethical behavior role modeling. Emotional reactions to corruption included cynicism, optimism, pessimism, paranoia and fear, and were targeted at top leaders, organizational practices (i.e., the old boy network, nepotism, and cronyism) and ethics interventions. Implications for leadership training and other organizational ethics interventions are discussed. Kathie L. Pelletier is a doctoral student in the School of Behavioral and Organizational Sciences at Claremont Graduate University, 123 East Eighth Street, Claremont, CA 91711; e-mail: kathie.pelletier@cgu.edu. Her research interests include organizational ethics, ethical leadership, and toxic leadership. Michelle C. Bligh is an assistant professor of Organizational Behavior in the School of Behavioral and Organizational Sciences at Claremont Graduate University, 123 East Eighth Street, Claremont, CA 91711; e-mail: michelle.bligh@cgu.edu. Her research interests include charismatic leadership, political and executive leadership, and organizational culture.     

The Moderating Effect of Individuals' Perceptions of Ethical Work Climate on Ethical Judgments and Behavioral Intentions

Dimensions of the ethical work climate, as conceptualized by Victor and Cullen (1988), are potentially important influences on individual ethical decision-making in the organizational context. The present study examined the direct and indirect effects of individuals' perceptions of work climate on their ethical judgments and behavioral intentions regarding an ethical dilemma. A national sample of marketers was surveyed in a scenario-based research study. The results indicated that, although perceived climate dimensions did not have a direct effect on behavioral intentions, there were significant moderating effects. Climates perceived as emphasizing social responsibility and rules/codes moderated the individual ethical judgment-behavioral intentions relationship such that individuals were less likely to say that they would engage in a questionable selling practice even when they themselves did not believe the practice to be unethical. Respondents were somewhat more likely to form intentions consistent with their judgment that the questionable practice was morally acceptable when the ethical climate was characterized by an emphasis on team/friendship.     

Exposure to Ethics Education and the Perception of Linkage between Organizational Ethical Behavior and Business Outcomes

This study focused on the effects of individual characteristics and exposure to ethics education on perceptions of the linkage between organizational ethical practices and business outcomes. Using a stratified sampling approach, 817 students were randomly selected from a population of approximately 1310 business students in an AACSB accredited college of business. Three hundred and twenty eight of the subjects were freshmen, 380 were seniors, and 109 were working managers and professionals enrolled in a night-time MBA program. Overall, the respondents included 438 male students and 379 female students. Exposure to ethics in the curriculum had a significant impact on student perceptions of what should be the ideal linkages between organizational ethical practices and business outcomes. Gender based differences were found with female students having a higher expectation regarding what should be the “ethics practices and business outcomes” link. Exposure to ethics in the curriculum had a positive moderating influence on the gender-based effects on perceptions of ideal ethical climate. The interaction effect showed that exposure to ethical education may have a positive impact on males and allow them to catch up with females in their ethical sensitivities concerning the ideal linkage between organizational ethical behavior and business outcomes. Further, consistent with the literature, the study found that gender differences in ethical attitudes regarding the ideal ethical climate, while significant for undergraduates, appeared to narrow considerably for the working professionals who were part-time MBA students. Harsh Luthar is an Associate Professor of Management at Bryant University. He received his Ph.D. from Virginia Polytechnic University, Pamplin College of Business, in the Department of Management. His research interests include international differences and cross-cultural issues impacting global human resource practices, ethical attitudes of students, and the nature of spiritual leadership. Ranjan Karri is an Assistant Professor of Management at Bryant University. He received his Ph.D. in strategic management from Washington State University. His research interests include corporate and business strategies, enterpreneurship, ethical leadership and corporate governance.     

Determinants of Ethical Decision Making: The Relationship of the Perceived Organizational Environment

This study attempts to help explain the ethical decision making of individual employees by determining how the perceived organizational environment is related to that decision. A self- administered questionnaire design was used for gathering data in this study with a sample size of 245 full-time employees. Perceived supervisor expectation, formal policies, and informal policies were used to assess the expressed ethical decision of the respondents. The findings indicate that the perceived organizational environment is significantly related to the ethical decision of the respondent.     

An Examination of the Relationship Between Ethical Work Climate and Moral Awareness

This paper draws from the fields of history, sociology, psychology, moral philosophy, and organizational theory to establish a theoretical connection between a social/organizational influence (ethical work climate) and an individual cognitive element of moral behavior (moral awareness). The research was designed to help to fill a gap in the existing literature by providing empirical evidence of the connection between organizational influences and individual moral awareness and subsequent ethical choices, which has heretofore largely been merely assumed. Results of the study provide evidence that ethical work climate (EWC) is a primary predictor of individual moral awareness, and that the influence of social factors often overrides the effects of individual differences in a work group setting. Implications for future research are provided.     

A Cross-Cultural Examination of the Endorsement of Ethical Leadership

The western-based leadership and ethics literatures were reviewed to identify the key characteristics that conceptually define what it means to be an ethical leader. Data from the Global Leadership and Organizational Effectiveness (GLOBE) project were then used to analyze the degree to which four aspects of ethical leadership – Character/Integrity, Altruism, Collective Motivation, and Encouragement – were endorsed as important for effective leadership across cultures. First, using multi-group confirmatory factor analyses measurement equivalence of the ethical leadership scales was found, which provides indication that the four dimensions have similar meaning across cultures. Then, using analysis of variance (ANOVA) tests each of the four dimensions were found to be universally endorsed as important for effective leadership. However, cultures also varied significantly in the degree of endorsement for each dimension. In the increasingly global business environment, these findings have implications for organizations implementing ethics programs across cultures and preparing leaders for expatriate assignments. Christian J. Resick is Assistant Professor of Industrial and Organizational Psychology at Florida International University. His research is aimed at understanding how people interact with and influence various aspects of their work environments, including cultures, climates, leaders, and teammates along with the implications for various aspects of organizational behavior. A particular focus of Christian’s work examines ethical leadership and the critical linkages between leadership and organizational ethics. He received his Ph.D. from Wayne State University. Paul J. Hanges is a professor in the Department of Psychology at the University of Maryland and the head of the Industrial/Organizational Psychology program in the department. He is an affiliate of the Cognitive Psychology program and the R. H. Smith School of Business. Paul’s research focuses on three topics (a) social cognition, leadership, and cross-cultural issues; (b) personnel selection, test fairness, and racial/gender discrimination; and (c) research methodology. He is on the editorial board of the Journal of Applied Psychology and The Leadership Quarterly and is a fellow of the Society of Industrial and Organizational Psychology and the American Psychological Association. Marcus W. Dickson is Associate Professor of I/O Psychology at Wayne State University in Detroit. His research generally focuses on issues of leadership and culture (both organizational and societal), and the interaction of those constructs. He is a former Co-Principal Investigator of the GLOBE Project, and his work has appeared in Journal of Applied Psychology, Applied Psychology: An International Review, and The Leadership Quarterly, among others. Jacqueline K. Mitchelson is a doctoral candidate in Industrial and Organizational Psychology at Wayne State University. Her current research areas are leadership, organizational culture, individual differences and work-family conflict.     

Ethical Character and Virtue of Organizations: An Empirical Assessment and Strategic Implications

Virtue ethics has often been regarded as complementary or laissez-faire ethics in solving business problems. This paper seeks conceptual and methodological improvements by developing a virtue character scale that will enable assessment of the link between organizational level virtue and organizational performance, financial or non-financial. Based upon three theoretical assumptions, multiple studies were conducted; the content analysis of 158 Fortune Global 500 firms ethical values and a survey of 2548 customers and employees. Six dimensions of organizational virtue (Integrity, Empathy, Warmth, Courage, Conscientiousness and Zeal) are identified through confirmatory factor analysis, and validated against satisfaction measure. Strategic implications of virtue characters are discussed.